Public WorksQuestion 589 of 1605
If a DIR audit on a public works project finds that a contractor underpaid prevailing wages, what is the awarding body authorized to do under Labor Code §1726?
a.Withhold from progress payments amounts sufficient to cover the assessed wages, penalties, and forfeitures
b.Cancel the contract immediately without any process
c.Refer the contractor for criminal prosecution only
d.Ignore the finding because only DIR can take action
Explanation
Labor Code §1726 directs the awarding body, upon notification of an underpayment, to withhold from progress or final payments the amounts assessed by the Labor Commissioner for unpaid prevailing wages, statutory penalties, and forfeitures until the matter is resolved.
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