Who is exempt from certified payroll in California?

What exempt means here

Exempt means you do not file your certified payroll in DIR's eCPR system. It does not mean you skip prevailing wage. Two narrower rules do remove prevailing wage itself: a project of $1,000 or less under Labor Code section 1771, and a small project that an awarding body chooses not to cover when it runs an approved labor compliance program on every one of its projects, under section 1771.5(a). Otherwise you keep payroll records under section 1776 even when you do not file them.

DIR's own pages do not agree on how long the list is. DIR's exemptions page (marked July 2016) says that only projects monitored and enforced by an approved labor compliance program, or covered by a qualifying project labor agreement, "may be exempted" from submitting certified payroll records to DIR. It then says that "until further notice" the exempt projects are two: the legacy program projects and the project labor agreement projects. DIR's eCPR FAQ also lists those two and has no small project entry. DIR's certified payroll FAQ (marked July 2016) adds the small project exemption as a third, and its Public Works FAQ (marked September 2024) lists the same three. This guide covers all three and says where the sources differ.

The exemptions DIR lists

1. Projects monitored and enforced by a legacy labor compliance program. DIR's exemptions page and eCPR FAQ both list these. The four programs are Caltrans, the City of Los Angeles, the Los Angeles Unified School District (LAUSD), and the County of Sacramento. DIR's Labor Compliance Programs page, revised May 7, 2026, still names them. Under Labor Code section 1771.4(b)(1), the Labor Commissioner may exempt a project when the awarding body has enforced an approved program on all its public works projects continuously since December 31, 2011. What you still owe: prevailing wage, and a certified copy of each weekly payroll at the time the program designates, which section 1771.5(b)(3) requires of an approved program.
2. Projects covered by a qualifying project labor agreement. DIR's eCPR FAQ says these are exempt at the Labor Commissioner's discretion. Under section 1771.4(b), the Labor Commissioner may exempt a public works project when the awarding body has entered into a collective bargaining agreement that binds all contractors performing work on the project and includes a way to resolve disputes about the payment of wages. DIR's Public Works FAQ also lists these projects among those the Labor Commissioner has exempted, but because the statute and the eCPR FAQ make it the Labor Commissioner's choice, a union agreement on the job does not by itself make the project exempt. What you still owe: prevailing wage and your payroll records. Ask the awarding body or general contractor in writing.
3. Small projects. DIR's certified payroll FAQ and Public Works FAQ list projects covered by the small project exemption among those exempt from furnishing electronic certified payroll. DIR's exemptions page and eCPR FAQ do not list it. The lines are $25,000 or less for construction, alteration, demolition, installation, or repair, and $15,000 or less for maintenance. The same dollar lines appear in Labor Code section 1725.5(f), which says the contractor registration section does not apply to work on those projects. The amount is the whole contract between the awarding body and the prime contractor, so a small subcontract inside a larger prime contract does not qualify, per DIR's Public Works FAQ. DIR says a job cannot be split to stay under the line. What you still owe: the prevailing rate on anything over $1,000 under section 1771, and your section 1776 records. The statute is narrower than the FAQ list. Section 1771.4(a)(3)(A) puts the duty to furnish records on each contractor and subcontractor, and under section 1771.4(a)(4) only a contractor that is not registered with DIR and works on a project where registration is not required because of section 1725.5(f) need not furnish those records directly to the Labor Commissioner. That contractor must keep them for at least three years after the work is complete. DIR's Public Works FAQ words this by contractor: those who work exclusively on small public works projects are not required to register or file electronic certified payroll reports for those projects, and must still keep their records and provide them on request. If you are registered with DIR, confirm with the awarding body whether you file on the job. See the project thresholds guide.

Exempt agencies at a glance

A district that says it has a labor compliance program is not on this list unless it is LAUSD, and even a DIR-approved program exempts you only if it is one of the four above. See our school district guide.

Crew size, owners, and sole proprietors

Three employees, or thirty

No exemption depends on headcount, and none of DIR's lists has an entry for it. Section 1776(a) puts the payroll record duty on each contractor and subcontractor for every worker it employs in connection with the public work.

Owners, partners, and sole proprietors

DIR's Public Works FAQ says a public works contractor includes sole proprietors and brokers responsible for performing the work, even with no employees. DIR's certified payroll FAQ tells an owner/operator who takes no paycheck to be ready to report their work classification, hourly rate, hours, and estimated pay for their own labor. Owning part of the company does not exempt you either: nothing on DIR's lists or in its owner answer says so. See our sole proprietor guide for your own pay line.

Exempt from DIR is not exempt from the rest

• Records on request. Under section 1776(h), a contractor has 10 days after a written request to hand over certified payroll records, or forfeits $100 for each calendar day for each worker until it complies. From January 1, 2027, SB 909 raises this to $140 (what SB 909 changes). See the 10 day request.
• Federal jobs. DOL's WH-347 page says Form WH-347 is available for the convenience of contractors and subcontractors to submit certified weekly payrolls on federal or federally assisted construction contracts. Use of the form itself is optional, but DOL says covered contractors are still required by the Davis-Bacon and Related Acts regulations and the contract clauses to submit payroll information on a weekly basis. DIR's Public Works FAQ adds that a federally funded job run by a California awarding body is still subject to state prevailing wage law. See DIR registration on federal only projects.
• Penalty if you guess wrong. Failing to furnish records you owe the Labor Commissioner costs $100 per day, capped at $5,000 per project, under section 1771.4(a)(3)(B) and (C), once the records are 14 days past due.

Check your project in five steps

1. Name the awarding body. If it is one of the four, read your contract's payroll clause.
2. Find the whole prime contract amount, not just your piece. Above $25,000 ($15,000 for maintenance) it is not a small project, even if your subcontract is $5,000.
3. If a project labor agreement is involved, ask the awarding body or general contractor in writing whether the Labor Commissioner has exempted the project from direct eCPR filing.
4. Search DIR's public works project search. Under section 1773.3(j), the awarding body registers contracts above the small project line, but DIR's Public Works FAQ says it need not register projects inside the exemption. A missing ID on a larger job is the awarding body's to fix: PWC-100 explained.
5. Keep payroll records current each week either way. If you guess wrong, you will need those records to file, and a penalty can start once they are 14 days past due, under section 1771.4(a)(3)(B) and (C).

If your project is not exempt

Under section 1771.4(a)(3)(A), you furnish records to the Labor Commissioner at least once every 30 days while work is performed, and within 30 days after the final day of work. WellStanding prepares the WH-347 and files the DIR eCPR from your own payroll export. A person reviews every filing, and you sign the certification. Setup is $995 one time, first filing free, then $249 per month for crews up to 25 workers or $449 for 26 to 50 workers.

Questions