California Labor Code Sections 1725.5 and 1771.1 created a registration requirement that sits on top of the existing CSLB licensing system. Every contractor and subcontractor bidding on or working on a public works project in California must be registered with the Department of Industrial Relations (DIR) — separate from a CSLB license.

What DIR Registration Requires

  • Annual registration fee (currently $375)
  • Active workers' compensation insurance
  • Compliance with certified payroll reporting requirements
  • No outstanding final judgments on public works projects

The GC's Exposure for Unregistered Subs

Under Labor Code 1771.1(b), if a sub is found to be unregistered during the project, the awarding body has authority to terminate the prime contract — not the sub's contract, your contract. You lose the whole project because your sub forgot to renew their $375 registration.

How to Protect Yourself Before Bidding

  • Verify your own DIR registration is current and will remain active through project completion
  • Confirm every subcontractor you intend to list is also currently registered
  • Include a requirement in your subcontracts that subs must maintain DIR registration continuously
  • Build a calendar reminder to re-verify sub registrations at the annual renewal cycle