A certified payroll audit on a California public works job usually comes from one of three places:
The general contractor's compliance department. The GC is responsible up the chain, so they check your reports before the owner or the state does.
The DIR — the California Department of Industrial Relations, through the Labor Commissioner. This is the state-level prevailing wage audit, and it carries the most weight.
A third-party compliance administrator hired to monitor the project — the firms behind the notices you see inside systems like LCPtracker.
Whichever one is asking, they are checking the same five things:
- Rates paid against the project's wage determination
- Classifications against the work your crew actually performed
- Apprentice ratios, periods, and certificates on file
- Fringe benefits — paid, and paid the way the determination requires
- Deductions — only the ones each employee authorized in writing
If any of those five do not line up, the report gets flagged, payment can be withheld, and corrections — with restitution where workers were underpaid — become the way out.