Prevailing Wage and Apprenticeship Program Requirements for Public Projects

Division of Labor Standards and Statistics
707 17th Street, Denver, CO 80202 | 303-318-8441
www.ColoradoLaborLaw.gov | www.LeyesLaboralesDeColorado.gov

Interpretive Notice & Formal Opinion ("INFO") #13:
Prevailing Wage and Apprenticeship Program Requirements for Public Projects

Overview

This INFO provides a summary of (A) the right to be paid a "prevailing wage" when working for contractors and subcontractors on certain public projects funded by the State of Colorado, and (B) the requirement for contractors in certain trades to participate in a certified apprenticeship program.[^1]

Prevailing Wage Requirements for Public Projects

Contractors who contract with state government agencies for public projects must:

• pay project employees wages and benefits that match or exceed those prevailing in the marketplace for the job, trade or occupation, and geographic locality;
• pay wages weekly to all employees employed directly on the site of work; and
• include the prevailing wage in the bid solicitation by the agency contracting for the project.

Reporting on Energy Sector Public Works Projects

As of 2024, on energy sector public works projects without Project Labor Agreements:

• contractors must provide weekly payroll records to project owners, and
• project owners must report craft labor certifications to this Division attesting to compliance with prevailing wage and apprenticeship requirements every quarter. See below for details.

Submit this reporting form if you are a project owner, lead contractor, or subcontractor required to report. Email the Division at [email protected] if you know of an energy sector public works project that is not reporting craft labor certifications as required or if you have questions about reporting.

What Projects and Which Employees Are Covered?

The prevailing wage requirement for state projects applies to every contractor who is awarded a contract of $500,000 or more for a public project by a government agency, as well as their subcontractors. It applies to all employees engaged to work on the project, for their pay received on that project.[^2]

Public projects include:

• the construction, repair, improvement, or demolition of any type of "public improvement" such as buildings, roads, or other structures built to enhance public health, safety or welfare,
• contracts for the operations or upkeep of public improvements,[^3]
• energy sector public works projects, defined under C.R.S. § 24-92-303(5) (more discussion below),
• thermal energy network or system projects, defined under C.R.S. § 40-3.2-108, and
• any work, construction, or repair performed by a private party through a contract under which the government will rent, lease, or purchase at least fifty percent of the project.

All workers who meet the definition of "employee" in the Colorado Wage Act and who are engaged to work on a public project are subject to the prevailing wage requirement. Contractors should be aware of the need to correctly classify all workers who meet this definition as employees rather than independent contractors. Under the Wage Act, C.R.S. § 8-4-101(5):

• An "employee" is any person performing labor or services for the benefit of an employer. In determining whether an individual is an employee, Colorado law considers all relevant evidence about the relationship between the worker and the employer, including the degree of control the employer may or does exercise over the worker, and the degree to which the worker performs the "primary work" of the employer.[^4]
• An "employee" does not include a person who is:
• primarily free from control and direction in the performance of the service, both under his or her contract for the performance of service and in fact, and
• customarily engaged in his or her own independent trade, occupation, profession, or business that is related or similar to the service that the worker is providing to the employer.

The following are not covered by the Act's prevailing wage requirements:

• two kinds of contracts that federal prevailing wage law covers — contracts for any public project receiving federal funding, and contracts awarded by the Colorado Department of Transportation; and[^5]
• contracts for work for political subdivisions of the state, such as cities, counties, school districts, and special districts, because they are not agencies of the state government.

What are Energy Sector Public Works Projects?

A project is an energy sector public works project if it has the purpose of generating, transmitting, or distributing electricity or natural gas to provide energy to Colorado individual consumers or businesses and:

• The project is funded by the state and is built by or for a public utility;[^6] or
• The project is funded by utility customer funding as approved in specific proceedings conducted by the public utilities commission and is built by or for a public utility;[^7] or
• The project is funded by utility customer funding as approved by a cooperative electric association and generates or distributes electricity or natural gas.[^8]

Which Energy Sector Public Works Projects are Covered?

Unless exempt (see below), for energy sector public works projects where an invitation for bids or proposals is issued on or after January 1, 2024, the following projects must comply with prevailing wage and apprenticeship requirements,[^9] with express provisions included in the contracts between the project owner and lead contractors:[^10]

• Any energy sector public works project that is funded at least $500,000 by the state (C.R.S. § 24-92-303(5)(a)(I)(A)) when the project is:
• a power generation project with a nameplate generation capacity of one megawatt or higher; or
• an energy storage system as defined by C.R.S. § 40-2-202 with an energy rating of one megawatt of power capacity or four megawatt hours of usable energy capacity or higher.[^11]
• Any energy sector public works project that costs more than $1,000,000 and is funded at least $500,000 by the state, from a public utility, or from a cooperative electric association when the project falls under C.R.S. § 24-92-303(5)(b)(II), which includes: pollution controls; utility gas distribution; electric transmission projects; geothermal systems that are used to provide heat or heated water or that operate as thermal systems or thermal networks as defined in law; electric vehicle charging infrastructure installations; hydrogen-related infrastructure construction projects; and any project that transports or stores carbon dioxide captured from power generation.[^12]

Reporting Requirements for Energy Sector Public Works Projects

Unless exempt (see below), lead contractors on energy sector public works projects must prepare certified payroll records for all craft workers directly employed by the contractor, and obtain certified payroll records for all contractors and subcontractors on the project.[^13] The lead contractor must submit these certified payroll records to the project owners each week.[^14] Additionally, each quarter, for all covered projects, the lead contractor and subcontractors must prepare a craft labor certification.[^15] Craft labor certifications must include:

• "all documentation and certification of payroll required for an energy sector public works project in accordance with" the prevailing wage and apprenticeship requirements;[^16]
• a sworn attestation, under the penalty of perjury, that the lead contractor is fully compliant with all employment, training, and wage requirements under the prevailing wage and apprenticeship laws; and
• an identical, equivalent craft labor certification executed in the same manner by all subcontractors participating in the energy sector public works project.[^17]

The project owner must submit quarterly craft labor certifications to the Division of Labor Standards and Statistics or must require by contract that the lead contractor do so.[^18] To do so, submit this reporting form. Craft labor certifications must be received quarterly, by the end of the month following the close of each calendar quarter (meaning, April 30, July 31, October 31, and January 31) throughout the duration of the project. Others with information on any upcoming or impending contract that may qualify are encouraged to inform the Division.

Which Energy Sector Public Works Projects Are Exempt?

• Energy sector public works projects covered by Project Labor Agreements are exempt from Part 3 prevailing wage, apprenticeship, and craft labor certification reporting requirements.[^19] Project Labor Agreements are defined as prehire collective bargaining agreements between a lead contractor and construction labor organizations.[^20] Project Labor Agreements must include provisions that:
• Set forth effective, immediate, and mutually binding procedures for resolving jurisdictional labor disputes and grievances arising before the completion of work;
• Contain guarantees against strikes, lockouts, or similar actions;
• Ensure a reliable source of trained, skilled, and experienced construction craft labor;
• Further public policy objectives regarding improved employment opportunities for minorities, women, or other economically disadvantaged populations in the construction industry, including persons from disproportionately impacted communities, to the extent permitted by state and federal law;
• Permit the selection of the lowest qualified responsible bidder or lowest qualified responsible offeror without regard to union or non-union status at other construction sites;
• Bind all contractors and subcontractors on the energy sector public works project to the project labor agreement through the inclusion of appropriate bid specifications in all relevant contract documents; and include other terms as the parties deem appropriate.[^21]
• In addition to projects covered by Project Labor Agreements, the energy sector public works projects listed in C.R.S. § 24-92-304(1)(c) are exempt from Part 3 prevailing wage, apprenticeship, and craft labor certification reporting requirements, which include these projects:
• work on an energy sector public works project performed by employees of a utility company;
• work on an energy sector public works project that satisfies prevailing wage and apprenticeship requirements under the federal Inflation Reduction Act;
• a utility-incentivized demand-side management or electrification program under C.R.S. § 40-3.2-105.5 or 40-3.2-105.6;
• utility or state-funded building energy efficiency programs;
• service agreements entered into by a public utility prior to March 1, 2023;
• projects that involve an electric distribution line with a capacity of 69 kv or less;
• and projects that involve pipelines with a specified minimum yield strength less than 30%.
• For energy sector public works projects funded by the state, pursuant to 24-92-303(5)(a)(I)(A), the requirements of this part 3 apply only when the project is a power generation project with a nameplate generation capacity of one megawatt or higher or an energy storage system as defined by section 40-2-202 with an energy rating of one megawatt of power capacity or four megawatt hours of useable energy capacity or higher and the aggregated public assistance from the state is five hundred thousand dollars or more.
• For energy sector public works projects under section 24-92-303(5)(b)(II), the requirements of this part 3 apply only when the total project cost is one million dollars or more, and the aggregated public assistance from the state, funding from a public utility, or funding from a cooperative electric association is five hundred thousand dollars or more.

How are Prevailing Wages Calculated?

Under the Act, "wages" include hourly rates of pay, and many other components of compensation (aka "fringe benefits"), to ensure that the overall value of employees' compensation matches or exceeds that prevailing in the marketplace. Specifically, the statute provides that "wages" include "the basic hourly rate of pay" plus the value of all of the following benefits and components of compensation:[^22]

• "medical or hospital care, pensions on retirement or death, compensation for injuries or illness resulting from occupational activity, or insurance to provide any of the foregoing,"
• "unemployment benefits, life insurance, disability and sickness insurance, or accident insurance,"
• "vacation and holiday pay,"
• "defraying the costs of apprenticeship or other similar programs," and
• "other bona fide fringe benefits."

However, fringe benefits or compensation components that an employer is required to provide by law (such as workers' compensation or unemployment insurance) are not included in the prevailing wage calculation.[^23] Colorado's prevailing wage rates are calculated by the Department of Personnel and Administration (DPA).

The Act requires that the values of the listed benefits are calculated by adding together the value of (1) irrevocable contributions made by the employer to the benefits fund, plan, or program, and (2) the reasonably anticipated cost to provide the benefit to the employee.

The value of apprenticeship program costs is determined differently than other benefits. Contractors may pay the apprenticeship program portion of the prevailing wage by making payments required by a collective bargaining agreement (CBA) or by the terms of an apprenticeship program sponsored by a multi-employer trade association. If the contractor is not part of an apprenticeship program under a CBA or through a trade association, it must instead pay the prevailing apprenticeship contribution amount directly to workers in cash.

Until December 31, 2021, Coloradoans should refer to the federal prevailing wage rates set by USDOL pursuant to the Davis-Bacon Act,[^24] based on USDOL's wage survey program. These rates can be viewed at SAM.gov. Beginning on January 1, 2022, DPA will publish and annually update prevailing wage rates for projects subject to the Act, specific to each trade or occupation and to each geographic locality.

Bid solicitations must include the prevailing value of both wages and benefits contributions for each job category for which employees will be hired to perform on the project. And contracts for public projects must contain terms requiring both the contractor and any subcontractor it uses for the project, to provide compensation at the rates stated in the solicitation. Contracts must also require that wages be paid at least weekly to all employees working directly at the worksite.

To ensure these requirements are met, contractors and subcontractors must:

• maintain an on-site log of project employees;
• submit their payroll reports and contact information of benefits administrators to DPA each month;
• display a poster, provided by DPA, stating the applicable prevailing wage rates at the job site; and
• ensure there is no retaliation against employees who assert their rights to be paid weekly and to be paid at the prevailing wage.

How Can An Employee File a Complaint?

The Act provides that employees who believe they are not being paid the prevailing wage or provided with benefits at the prevailing rate, or have not been paid weekly, must first file a complaint with the contracting officer at the agency that contracted for the project. DPA has a Public Project Prevailing Wage Complaint Form for employees to use to file a complaint with their contracting agency.

Information regarding the identity of the contracting agency and its contracting officer is included on the poster required by the Act and developed by DPA, which must be posted at all project sites. If the poster cannot be located, the employee can request this information from the Office of the State Architect at DPA.

When a government agency receives a complaint from a worker on a project, these steps must be taken:

At Step 4, DLSS will investigate all violations reported to it and may require contractors to compensate workers for underpaid wages or benefits and to pay fines of up to $25,000 per willful violation, depending on the number of violations.[^25]

At Step 5, an employee may file a private lawsuit individually or on behalf of all employees who experienced the same underpayment. If a court finds that employees were underpaid for wages or benefits, it must award double the amount of the underpayment, plus interest. Courts may also apply additional penalties for any misrepresentations made by an individual or corporation about wage obligations under the Act.

How Else Are Prevailing Wage Requirements Enforced?

Government agencies must stop payment under existing contracts if weekly prevailing wage payments are not made. DPA may debar contractors who willfully violate the wage requirements of the Act three or more times in a five-year period, barring them from bidding on any future public projects for up to three years.

Required Use of Apprenticeship Programs by Subcontractors on Public Projects

Contractors on state-funded public projects of $1 million or more may only hire firms that participate in state or federally-registered apprenticeship programs as subcontractors for the following types of work:

• mechanical,
• sheet metal,
• fire suppression,
• sprinkler fitting,
• electrical, and
• plumbing.

Like the prevailing wage requirement, this requirement does not apply to contracts for any public project that receives federal funding, to any contracts awarded by the Colorado Department of Transportation, or to political subdivisions of the state.

What Apprenticeship Programs Qualify Under the Act?

Apprenticeship programs must be registered either with the federal Department of Labor's Employment and Training Administration (USDOL) or with Apprenticeship Colorado. They must also have a proven record of graduating apprentices, with the required completion rate increasing over time:

• From July 1, 2021 to June 30, 2026, a 15% completion rate for at least three of the past five years;
• From July 1, 2026 to June 30, 2031, a 20% completion rate for at least three of the past five years;
• From July 1, 2031 on, a 30% completion rate for at least three of the past five years.

Apprenticeship programs that do not have the required track record may petition the Colorado Department of Labor and Employment (CDLE) for conditional approval by contacting [email protected]. These programs must still certify that they have been registered with USDOL or the SAA for at least six months and have sufficient facilities, personnel and resources to provide "bona fide apprenticeship training." Conditional approval can last up to five years, but must be reviewed annually by CDLE to verify that the program is admitting new apprentices each year and advancing at least 10% of them annually.

Finally, a contracting agency may waive the apprenticeship requirement for project subcontractors only if it determines that no eligible subcontractors responded to a request for bids. Agencies must post all waivers and the specific reasons for the waiver on their websites.

How Must Contractors Verify Compliance?

A contractor must inform the agency overseeing the contract of the identities of the subcontractors it hires and must certify and submit supporting documents from USDOL verifying that they participate in programs meeting the criteria outlined above. Contracting agencies must publish this documentation on their websites.

How is the Apprenticeship Program Requirement Enforced?

There are several enforcement mechanisms if the apprenticeship requirements are violated:

• Contracting agencies must direct a contractor to terminate and remove any subcontractor that willfully falsified documents or made misrepresentations related to the apprenticeship program requirement.
• DPA may take action to debar the subcontractor from work on public projects for up to three years.
• The legislative audit committee may authorize the state auditor's office to investigate noncompliance.
• The state Attorney General's office may investigate any allegations of collusion.

For More Information: Visit the Division website, call 303-318-8441, or email [email protected].

[^1]: These requirements, effective July 1, 2021, arise from the Colorado Quality Apprenticeship Training Act of 2019 (the "Act") that added to the Construction Bidding for Public Projects Act both the apprenticeship program requirements at C.R.S. § 24-92-115, and a new section on Prevailing Wage for Public Projects at C.R.S. § 24-92-201 et seq. For federally funded projects, the Davis-Bacon Act, 40 USC § 3141 et seq., and other federal laws may apply; for more on these laws, visit the Division Labor Rules page to view the Prevailing Wage & Residency ("PWR") Rules or SAM.gov.
[^2]: In covering "other construction workers," the Act covers more employees than the "mechanics and laborers" covered by the Davis-Bacon Act, 42 USC 3142(1).
[^3]: The "public projects" definition is broader than in federal law. Unlike the Davis-Bacon Act rules, 29 CFR 5.9(k), it includes improvements and demolitions; contracts for operation or upkeep of completed projects; and all "public improvements" (including roads), not just buildings and "works." Public projects using the "integrated project delivery" model (C.R.S. § 24-93-103 et seq.) are also covered, but not projects contracted through the Colorado Department of Transportation.
[^4]: See INFO #10 found on the Division INFOs & Other Published Guidance page.
[^5]: See, e.g., the Davis-Bacon Act, 40 USC 3141 et seq.; see also 29 CFR 5.1(a) (listing related Acts); US Dep't of Labor: Davis-Bacon and Related Acts.
[^6]: C.R.S. § 24-92-303(5)(a)(I)(A). The state funding may represent the entire funding or part of it. The state funding may be through "direct funding, loans, loan guarantees, land transfers, tax assistance, including tax credits, deductions, or incentives, or other assistance allocated or appropriated by the state."
[^7]: C.R.S. § 24-92-303(5)(a)(I)(B). The proceedings must be "conducted by the public utilities commission as part of an electric resource acquisition or requests for certificates of convenience and necessity for construction or expansion of a project, including but not limited to pollution control or fuel conversion upgrades and conversion of existing coal-fired plants to natural gas plants."
[^8]: C.R.S. § 24-92-303(5)(a)(II).
[^9]: Section 24-92-115(7) describes the apprenticeship utilization requirements and Section 24-92-201 et seq. describes the prevailing wage for public projects.
[^10]: C.R.S. § 24-92-304(1)(a).
[^11]: C.R.S. § 24-92-304(1)(b)(I).
[^12]: C.R.S. § 24-92-304(1)(b)(II).
[^13]: C.R.S. § 24-92-305(1).
[^14]: C.R.S. § 24-92-305(1).
[^15]: C.R.S. § 24-92-305(2).
[^16]: C.R.S. § 24-92-303(4).
[^17]: C.R.S. § 24-92-305(3).
[^18]: C.R.S. § 24-92-305(4).
[^19]: C.R.S. § 24-92-304(1)(c); C.R.S. § 24-92-306(2).
[^20]: C.R.S. § 24-92-303(9).
[^21]: C.R.S. § 24-92-303(9).
[^22]: The language defining "prevailing wage" in the Act is identical to that of the federal Davis-Bacon Act, 40 USC 3141(2), so USDOL regulations and interpretation may provide helpful guidance to the legislature's intent.
[^23]: Benefits also must be "ordinary business expense deduction[s] for federal income tax purposes."
[^24]: The timeframe for DPA to begin setting prevailing wages was extended from that in the Act by HB 21-1319.
[^25]: See also Dep't of Personnel & Admin., Ofc. of State Architect, Policies & Procedures: Public Projects (click "Public Projects"). A list of contractors found to have willfully violated the Act will be made publicly available on CDLE's website. A violation is "willful" if it is intentional or made with reckless disregard for, or deliberate ignorance of, the law.

INFOs are not binding law, but are the officially approved Division opinions and notices on how it applies and interprets various statutes and rules. The Division continues to update and post new INFOs; email [email protected] with any suggestions. To be sure to reference up-to-date INFOs, rules, or other material, visit ColoradoLaborLaw.gov. Last updated Apr. 30, 2024