BPI was a subcontractor on a public works project. The department found that BPI had not been paying its workers at the prevailing wage rate and issued a Civil Wage Penalty Assessment for the underpaid wages plus a statutory penalty. BPI claimed the general contractor was at fault for misinforming it about the prevailing wage rate. After BPI filed a request for review of the assessment, it settled with the department, agreeing to pay $83,000–less than the total assessment–in return for dropping its request for review. The settlement also provided that if BPI failed to pay the settlement amount as agreed, the department would be entitled to a judgment in the full amount of the assessment. BPI did not pay, and the department secured a judgment for the entire amount of the assessment (less what the general contractor had paid the department) which came to $63,000. This decision affirms the judgment. It holds that Civ. Code 1671 does not apply where the underlying obligation is statutory, not contractual. But even if 1671 applied, it holds that the “penalty” for late payment is reasonable under the laxer commercial test of 1671(b) given the state’s important interest in prompt payment of wages.