Prevailing Wages in California Relevant Law and Case Updates

Prevailing Wages in California Relevant Law and Case Updates

Ethan Walsh Best Best & Krieger LLP League of California Cities Annual Conference

San Francisco

LOCC ? San Francisco, CA September 23, 2011

What are prevailing wages?

? The prevailing wage rate paid to laborers in a region, based on craft or type of work.

? Wage rates are set by the Department of Industrial Relations ("DIR").

? Rates are set based on the single rate paid to the largest number of workers within a market area. As a result, wage rates frequently reflect collectively bargained wage rates.

LOCC ? San Francisco, CA September 23, 2011

Why do we care about prevailing wages?

? Prevailing wages must be paid on all "public works."

? Often higher than wages paid on private construction projects.

? Can impact cities' ability to provide financial assistance to economic development and redevelopment projects.

LOCC ? San Francisco, CA September 23, 2011

What is a "public work"?

? Defined in Labor Code section 1720.

? Primary definition contained in section 1720(a)(1): "Construction, alteration, demolition, installation or repair work done under contract, and paid for in whole or in part out of public funds."

LOCC ? San Francisco, CA September 23, 2011

Definition of "paid for in whole or in part out of public funds":

? Payment of public money or equivalent to contractor or developer;

? Performance of construction work by the public agency in execution of the project;

? Transfer of an "asset of value for less than fair market price;"

LOCC ? San Francisco, CA September 23, 2011

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