Is your California public works job exempt from certified payroll

The short answer

A small subcontract on a bigger public works job still needs DIR registration and eCPR when the whole contract is over the line. The registration exemption in Labor Code section 1725.5(f) is written for "a public works project of twenty-five thousand dollars ($25,000) or less", not for a subcontract. DIR reads the project as the entire contract between the awarding body and the prime contractor. Its Frequently Asked Questions on Public Works (September 2024, the "Public Works FAQ" below) says so, and so does DIR Newsline No. 2018-41 (June 13, 2018): "The small project exemption is applied based on the amount of the entire project, not a contractor's subcontracted amount of the project." So a $22,000 subcontract inside a $4 million prime contract is not exempt. You register and file eCPR, and prevailing wage applies either way on a project over $1,000, under Labor Code section 1771.

The first line is a public works project of $1,000 or less. DIR's Public Works FAQ says prevailing wage requirements apply to public works projects over $1,000, and that contractors on projects exceeding $1,000 must pay prevailing wages (Labor Code 1771) and maintain or furnish payroll records on request (Labor Code 1776). Labor Code section 1771 opens with the words "Except for public works projects of one thousand dollars ($1,000) or less", and then requires the general prevailing rate for workers on public works. Both speak of the project, not of a subcontract. Neither says how a subcontractor measures the $1,000 line, and DIR's sentence about the entire contract between the awarding body and the prime contractor is written only for the $25,000 and $15,000 amounts. If you are a subcontractor close to the $1,000 line, ask DIR how it counts your job before you rely on a small subcontract. Above that line, two more thresholds change what paperwork you owe. If the whole contract between the awarding body and the prime contractor is $25,000 or less for construction, alteration, demolition, installation, or repair work, or $15,000 or less for maintenance work, you do not have to register as a public works contractor, under Labor Code section 1725.5, subdivision (f). If you are not registered, Labor Code section 1771.4, subdivision (a)(4), also means you do not have to file electronic certified payroll records (eCPR) directly with the Labor Commissioner. DIR's Public Works FAQ describes the same relief for contractors who "work exclusively on small public works projects". Subdivision (a)(4) is written only for a contractor that is not registered. If you are already registered, or you register voluntarily, confirm with DIR whether you must still e-file on a small project. You still have to pay the prevailing rate, and an unregistered contractor must keep the section 1776 records for at least three years. The separate $30,000 apprenticeship line in Labor Code section 1777.5, subdivision (o), is a different test, covered below.

Project or subcontract: what the statutes measure

Read the words. The first two rows carry the $25,000 and $15,000 lines into registration and eCPR, and both measure a "project". Only the apprenticeship rule in the last row talks about an individual contract.

A subcontractor is covered by the registration rule, because section 1725.5 says "'contractor' includes a subcontractor as defined by Section 1722.1." Nothing in the first two rows lets you test your own subcontract against the $25,000 or $15,000 line. DIR's reading of the project's size is quoted below.

DIR's own pages do not list the exemptions the same way. The Public Works FAQ (September 2024) lists legacy Labor Compliance Program projects, projects covered by a qualifying project labor agreement, and projects covered by the small project exemption as exempt from submitting certified payroll records. DIR's separate Certified Payroll Reporting Exemptions page lists only the labor compliance program and project labor agreement categories, and does not mention small projects. That page is dated July 2016. DIR's Newsline No. 2017-52 (June 28, 2017) announced the small project exemption as established effective July 1, 2017, so that page predates the exemption it leaves out. In the statute, small project relief is in section 1771.4(a)(4), and the Labor Commissioner's power to exempt a project is in subdivision (b). Our guide on who is exempt from certified payroll in California covers the other categories.

The three thresholds, side by side

Read the table by project size, in order. A $900 service call that is the whole public works project is a project of $1,000 or less, so section 1771 does not require the prevailing rate for it. A $12,000 plumbing repair owes prevailing wage and recordkeeping but requires no registration, and an unregistered contractor does not e-file eCPR. A $28,000 repair job owes registration and eCPR on top of that. A $50,000 new construction contract owes all three, registration, eCPR, and the apprenticeship ratio. The apprenticeship line runs on its own track: it is not stacked with the registration thresholds, and it uses a different number. These examples assume you work directly for the awarding body, so your contract is the whole project. A subcontractor tests the $25,000 and $15,000 lines against the entire contract between the awarding body and the prime contractor, per DIR's FAQ. A subcontractor under a prime contractor is also outside the $30,000 apprenticeship exclusion, as the table notes. For the $1,000 line, neither section 1771 nor DIR's FAQ says how a subcontractor measures it.

What the $25,000 / $15,000 exemption actually says

The statute is Labor Code section 1725.5, the contractor registration requirement. Subdivision (f) reads: this section "does not apply to work performed on a public works project of twenty-five thousand dollars ($25,000) or less when the project is for construction, alteration, demolition, installation, or repair work or to work performed on a public works project of fifteen thousand dollars ($15,000) or less when the project is for maintenance work." That is a registration exemption, stated in registration's own section. It says nothing, by itself, about payroll filing.

The link to eCPR filing is a separate cross-reference in Labor Code section 1771.4, subdivision (a)(4): "If the contractor or subcontractor is not registered pursuant to Section 1725.5 and is performing work on a project for which registration is not required because of subdivision (f) of Section 1725.5, the unregistered contractor or subcontractor is not required to furnish the records specified in Section 1776 directly to the Labor Commissioner but shall retain the records specified in Section 1776 for at least three years after completion of the work." Two clauses do the work here. The first applies only to a contractor that "is not registered": the eCPR e-filing duty is gone for this contract. The second keeps the records duty: the same records you would have filed still have to be kept, for at least three years. The subdivision says nothing about a contractor that is registered, so a registered contractor, or one that registers voluntarily, should confirm with DIR whether it must still e-file on a small project. Nothing in either subdivision touches the rate you owe workers. Prevailing wage still applies to a public works project above the $1,000 line in section 1771, on every dollar of a $12,000 or a $22,000 contract.

Check the date on any source, including this one. Section 1725.5 as now in force became operative on July 1, 2026, under its subdivision (h). The version before it, marked operative only until that date in DIR's compilation of prevailing wage laws, has the same $25,000 and $15,000 wording in subdivision (f), so the lines did not move. DIR's FAQ is dated September 2024, before the current version took effect, and the $25,000 and $15,000 amounts it states match subdivision (f).

What is measured, and what is not

The threshold runs on the entire contract between the awarding body and the prime contractor, the master contract, not on any individual subcontract carved out of it. DIR's own Public Works FAQ states it directly: "Keep in mind that this amount is for the entire contract between the Awarding Body and the Prime Contractor. If the subcontract is less than this amount but the master contract is more than this amount then it would not fall under the small project exemption." A subcontractor holding a $22,000 slice of a $4 million school job cannot test that $22,000 on its own. The master contract is far above the line, so that subcontractor still registers and files eCPR. Splitting one job into smaller purchase orders runs into the anti-parceling rule. Under its small project exemption bullets, DIR's Public Works FAQ speaks of "applicable thresholds" without naming the $25,000 line, and in a separate answer for awarding bodies it says the law does not permit parceling to avoid the $1,000 threshold. The small project passage reads: "The law does not permit jobs to be parceled in order to avoid the applicable thresholds. If the awarding body knows that total yearly project costs or projects awarded to the same vendor will exceed the applicable threshold, that vendor must be registered with the DIR as a public works contractor, and the contract for those projects should be registered using Public Works website services." DIR's test turns on total yearly project costs or projects awarded to the same vendor. If the same awarding body gives you more than one small job in a year, ask DIR how it counts the total before you rely on the small project exemption.

Same rule, three jobs. The dollar figures are examples.

If you are not sure which side of the line your contract falls on, get the total contract amount from the prime contractor or the awarding body before you decide. Registration costs $400 to $1,200 for one to three fiscal years, per DIR's contractor registration page and detailed further in our contractor registration guide. Under Labor Code section 1725.5, subdivision (a)(2)(E), a contractor found to have bid or worked on public works without being registered faces a period of disqualification. For a first violation in 12 months, the statute waives that period if the contractor pays an additional nonrefundable penalty registration fee of $2,000. DIR's registration page describes this as a $2,000 penalty for a contractor registering for the first time after bidding or working on a public works project in the past 12 months. Registration is not free of effect on filing, though. Section 1771.4(a)(4) is written for a contractor that "is not registered", and it does not say what happens to a contractor that registers for a job at or under the line. Confirm with DIR whether you would still have to e-file before you register for such a job.

Guessing wrong costs money on a project over the line. Under Labor Code section 1771.1(g), an unregistered contractor or subcontractor forfeits $100 for each day of work, up to $8,000, in addition to any penalty registration fee. Subdivision (n) exempts projects at or under the same $25,000 and $15,000 lines. Our penalties guide covers the rest.

A quick worked example

1. A $19,000 HVAC repair contract, direct with a city. Above $1,000, so prevailing wage applies: pay the determination rate. Below $25,000, so no PWCR registration is required, and if you are not registered you do not e-file eCPR. If you are already registered, confirm with DIR whether you must still e-file. Keep your section 1776 records for three years. No apprenticeship duty either way, since it is also under $30,000.
2. The same contract as $27,000. Prevailing wage applies. Now above $25,000, so register for a PWCR number and file eCPR directly to DIR, on the schedule covered in our deadlines guide. Still under $30,000, so no apprenticeship duty yet.
3. The same contract as $32,000. Everything above applies, plus the apprenticeship ratio requirement under Labor Code 1777.5. Under subdivision (e), before you start work on the contract you submit contract award information to an applicable apprenticeship program. DIR's apprenticeship forms page lists the Public Works Contract Award Information form (DAS 140) and the Request for Dispatch of an Apprentice form (DAS 142). See our DAS 140 and DAS 142 guide for what those forms do.

Federal projects have their own payroll rules

Everything above is California state law. Federal payroll rules are separate. The U.S. Department of Labor's WH-347 page says covered contractors and subcontractors on contracts subject to the Davis-Bacon and Related Acts must submit payroll information weekly, and that use of Form WH-347 itself is optional. Whether a given project is subject to Davis-Bacon depends on the contract and its funding terms, so check the contract's own compliance clauses for which layers apply. Both layers can apply to one project: DIR's Public Works FAQ says federally funded or assisted projects that are controlled or carried out by awarding bodies in California are subject to the state's prevailing wage laws. Our guide on DIR registration on federal only projects covers the case where only the federal layer applies.

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