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California Labor Code Section 1742.1

Legal Research Home > California Laws > Labor Code > California Labor Code Section 1742.1

1742.1.  (a) After 60 days following the service of a civil wage and
penalty assessment under Section 1741 or a notice of withholding
under subdivision (a) of Section 1771.6, the affected contractor,
subcontractor, and surety on a bond or bonds issued to secure the
payment of wages covered by the assessment or notice shall be liable
for liquidated damages in an amount equal to the wages, or portion
thereof, that still remain unpaid. If the assessment or notice
subsequently is overturned or modified after administrative or
judicial review, liquidated damages shall be payable only on the
wages found to be due and unpaid.
   Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial
grounds for appealing the assessment or notice with respect to a
portion of the unpaid wages covered by the assessment or notice, the
director may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid wages.
Any liquidated damages shall be distributed to the employee along
with the unpaid wages. Section 203.5 shall not apply to claims for
prevailing wages under this chapter.
   (b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations, within 60 days following service of the
assessment or notice, for the department to hold in escrow pending
administrative and judicial review. The department shall release such
funds, plus any interest earned, at the conclusion of all
administrative and judicial review to the persons and entities who
are found to be entitled to such funds.
   (c) The Labor Commissioner shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a civil wage and penalty assessment under Section 1741,
afford the contractor or subcontractor the opportunity to meet with
the Labor Commissioner or his or her designee to attempt to settle a
dispute regarding the assessment without the need for formal
proceedings. The awarding body shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a notice of withholding under subdivision (a) of Section
1771.6, afford the contractor or subcontractor the opportunity to
meet with the designee of the awarding body to attempt to settle a
dispute regarding the notice without the need for formal proceedings.
The settlement meeting may be held in person or by telephone and
shall take place before the expiration of the 60-day period for
seeking administrative review. No evidence of anything said or any
admission made for the purpose of, in the course of, or pursuant to,
the settlement meeting is admissible or subject to discovery in any
administrative or civil proceeding. No writing prepared for the
purpose of, in the course of, or pursuant to, the settlement meeting,
other than a final settlement agreement, is admissible or subject to
discovery in any administrative or civil proceeding. The assessment
or notice shall advise the contractor or subcontractor of the
opportunity to request a settlement meeting.
   (d) This section shall become operative on January 1, 2007.

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Last modified: March 17, 2014