San Francisco County Municipal Code Art. 106 Penalties, Forfeiture, and

ENFORCEMENT Sec. 106.1. Penalty and Forfeiture. Sec. 106.2. Withholding of Funds. Sec. 106.3. Where the City Does Not Have the Ability to Withhold Funds. Sec. 106.4. Termination. Sec. 106.5. Recourse Procedure. Sec. 106.6. Distribution of Forfeiture and Damages. Sec. 106.7. Remedies for Non-Compliance with Determination of Violation.

Any Contractor or Subcontractor who fails or neglects to comply with the requirements of Article 103, Article 104, and/or Article 105 shall forfeit to the City back wages due plus penalties. Penalties shall be forfeited in amounts consistent with analogous provisions of the California Labor Code as amended from time to time, including Sections 1775, 1777.7, and 1813, but not less than $50 for each calendar day, or portion thereof, for each worker not paid or otherwise not employed in compliance with the requirements of Article 103, Article 104, and/or Article 105. A

Contractor shall be jointly and severally liable for the forfeitures of its Subcontractor(s). In addition, any Contractor or Subcontractor who fails or neglects to comply with the requirements of Article 103, Article 104, and/or Article 105 shall be subject to the penalties set forth in Article V of Chapter 6 of the Administrative Code, including debarment. (Added by Ord. 296-24, File No. 240985, App. 12/19/2024, Eff. 1/19/2025, Oper. 2/19/2025)

WITHHOLD FUNDS. A Covered Project or Covered Contract subject to the procedures and/or requirements of Section 106.2 shall not be subject to the procedures and requirements of Section 106.3. For any Covered Project or Covered Contract for which the City does not have the ability to withhold funds, the Labor Standards Enforcement Officer shall determine whether a Contractor and/or a Subcontractor has failed to comply with the Prevailing Wage Provisions. If after conducting an investigation, the Labor Standards Enforcement Officer determines that a violation has occurred, the Labor Standards Enforcement Officer shall issue to and serve a Determination of Violation on the Contractor and/or any Subcontractor, which sets forth the basis of the determination and orders payment of back wages due plus penalties in amounts consistent with Section 106.1. A Contractor shall be jointly and severally liable for the violations and liabilities set forth in a Determination of Violation issued to its Subcontractor(s). Service of the Determination of Violation shall be made by United States mail and the date of service shall be the date of mailing. (Added by Ord. 296-24, File No. 240985, App. 12/19/2024, Eff. 1/19/2025, Oper. 2/19/2025)

In addition to and without prejudice to any other remedy available, the Department Head may terminate a Covered Contract unless within 30 days of service of the Certification of Forfeiture or Determination of Violation, the Contractor has either: (i) cured the violation; or (ii) established by documentary evidence, including but not limited to payroll records, the truth and accuracy of which is attested to by affidavit, proof of compliance with the applicable sections of the Prevailing Wage Provisions. Upon a termination under this Section 106.4, the Contractor shall not be entitled to any additional payment under the Covered Contract. (Added by Ord. 296-24, File No. 240985, App. 12/19/2024, Eff. 1/19/2025, Oper. 2/19/2025)

(a) The Controller shall withhold any forfeiture as provided in Section 106.2 until such time as either the Contractor or Subcontractor has conceded to the forfeiture or, in the event of an Appeal, there is a determination no longer subject to judicial review. The Controller shall then distribute the amounts withheld in the following order: (1) the Labor Standards Enforcement Officer shall make best efforts to distribute back wages withheld to the individual workers identified as not having been paid the proper wage rate; (2) the penalty sums provided for above shall inure to the benefit of the general fund of the City; (3) the Controller shall hold the balance of any back wages in escrow for workers who the Labor Standards Enforcement Officer, despite best efforts, cannot locate. In the event back wages are unclaimed for a period of three years, the Controller shall undertake administrative procedures for unclaimed funds in conformance with California Government Code Section 50050, et seq., as may be amended from time to time. (b) The order of distribution set forth in subsection (a) also shall apply to damages obtained as a result of a payment on a Determination of Violation under Section 106.3 or to an enforcement action pursuant to Section 106.7, as applicable. (Added by Ord. 296-24, File No. 240985, App. 12/19/2024, Eff. 1/19/2025, Oper. 2/19/2025)