Four new laws bring California public works changes in 2027, and three land directly on payroll teams. SB 1316 and SB 909 raise the stakes on certified payroll records, AB 1198 lets prevailing wage rates change mid-project on large jobs, and SB 342 softens the penalty for a license lapse.
| Law | What changes | Who it affects | Effective date |
|---|---|---|---|
| SB 1316 | Records not produced on time can be barred from your defense | Public works contractors and subcontractors | Jan 1, 2027 |
| SB 909 | Higher penalties for late certified payroll, prevailing wage, and apprenticeship violations | Public works contractors and subcontractors | Jan 1, 2027 |
| SB 342 | License lapse penalties are limited to the unlicensed period | Contractors on public works and many commercial projects | Jan 1, 2027 |
| AB 1198 | Updated prevailing wage rates can apply during construction | Prime contracts of $35 million or more | Jul 1, 2027 |
That means a missed deadline can cost you your defense, not just a penalty.
SB 1316 covers the payroll, time, and employment records California already requires you to keep, including:
Very little. A request normally gives you at least 10 days, and a good-faith reply asking for more time earns an automatic 15-day extension, except for certified payroll requests under section 1776. A clerical mistake can be excused if you produce the records within 20 days of the due date.
SB 909 raises California public works penalties starting January 1, 2027, including a $140 per worker, per day forfeiture when certified payroll records are not produced within 10 days of a request. Combined with SB 1316, a late response can now cost more money and weaken your defense at the same time.
Other changes include:
AB 1198 lets updated California prevailing wage rates apply during construction on public works contracts awarded or advertised after July 1, 2027, when the prime contract is worth $35 million or more. Today, the wage determination in place when a project is advertised generally holds for the life of the contract.
On covered jobs, the rate you priced on bid day may not be the rate you pay in year three. AB 1198 also moves DIR’s prevailing wage updates from a quarterly cycle to a semiannual one.
Yes, if the prime contract meets the threshold. The $35 million test uses the awarded value of the prime contract, so a $2 million subcontract on a $100 million project is covered.
SB 342 limits the penalty for a contractor license lapse to the time the contractor was actually unlicensed. Today, a short lapse can block payment for the whole job and let the owner demand back everything it paid.
Starting January 1, 2027, a contractor licensed when the contract was signed can collect for work done while licensed and must return pay only for work done during the lapse. Residential jobs with fewer than four units keep the old rules.
Start with records requests, since those rules take effect first.
eBacon generates California DIR certified payroll files, WH-347 forms, and state reports from the same time and payroll data your crews enter, so the records a Labor Commissioner request asks for come from one system. The eBacon Certified Payroll Reporting page explains how eBacon builds WH-347 forms, state reports, and agency uploads like DIR’s eCPR files.
Both laws take effect January 1, 2027. They apply to public works contractors and subcontractors in California.
Under SB 909, a contractor that misses the 10-day deadline to produce certified payroll records forfeits $140 per worker, per day until it complies. Under SB 1316, those late records may also be barred from your defense.
No, SB 1316 does not add new recordkeeping duties. It raises the stakes for producing the records you already keep on time.
No, AB 1198 applies only to public works contracts awarded or advertised for bid after July 1, 2027, with a prime contract of $35 million or more. Earlier projects generally keep the wage determination in place when they were advertised.
No, residential projects with fewer than four units keep California’s existing license penalties. SB 342 covers public works, commercial, institutional, and certain multifamily and common interest projects.
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Take an eBacon product tour to see how eBacon builds DIR eCPR files, WH-347 forms, and state certified payroll reports.