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Employee Rights Attorney Frank Pray

5160 Campus Drive

Newport Beach CA 92660

949.251.1006

877.job.atty


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"Prevailing Wage" Due on "Public Works"

"Prevailing Wage" Required on Government Funded Construction Projects

  • State prevailing wage rates apply to all public works contracts as set forth in Labor Code Sections 1720, 1720.2, 1720.3, 1720.4, and 1771.
  • The basic law is set in the CA Labor Code as the the "Prevailing Wage Law" or PWL, CA Administrative Code Sec. 16001.
  • The "good news" for labor is that even if the workers are non-union, they are entitled to the "prevailing wage" which the Department of Industrial Relations usually sets as the union labor scale in the locale where the construction is to take place.
  • More "good news" for labor is that the government funding may be only a partial funding , and includes "field survey work" that is "integral to the specific public work" in the design, preconstruction or construction phases.
  • Workers should know that "public works" [as defined by Labor Code Sec. 1720(a)(1)] is not construction limited to street, sewer, or public building improvements. Section 1720 includes any "construction, alternation, demolition, installation, or repair work done under contract and paid in whole or in part out of public funds . . ."
  • The question of whether the "construction" is government funded is answered in part by how the funding agency earmarks the purpose of the funds. See Greystone Homes, Inc. v. Chuck Cake and Pleasant Hill Redevelopment Agency (Nov. 22, 2005) 2005 DJ DAR 14729. See also City of Long Beach v. Dept. of Indus. Rel. (DIR) (2004) 34 Cal.4th 942, 949. [In Greystone, money designated for land acquisition preliminary to building could not be assumed to be for "construction"].
  • Also, workers can obtain "prevailing wage" on residential construction projects ranging from single family dwellings to apartments of up to 4 stories, if the projects are funded (e.g., low income or assisted living) by state or federal money.

How Can You Use This Information

  • If you are a worker on a project that is part of a City or County Redevelopment Plan, you likely qualify for "prevailing wage".
  • If you are a worker on a multi-unit residential construction project, you and your co-workers may want to contact the city, county or state to investigate whether the contractor received any government financial incentives to designate some of the housing for low income or first time buyers. If so, the construction could be a "public work" even if the money was minimal or did not go directly to the purpose of construction.
  • Compare the prevailing union rate for the location of this work with your own wage and benefit rate. If the difference is significant, you may want to press for the employer's voluntary compliance with "prevailing wage" law. You should probably present your case as a collective position of all workers in your trade working on this project.
  • If the employer fires you because you asserted your wage rights in good faith, then you will likely have an excellent case for "wrongful termination in violation of public policy". If you report the Contractor/Employer to the Department of Industrial Relations, the Department is required by Labor Code Sec. 1736 to keep your identity confidential.
  • The Labor Commissioner is required to investigate and make findings regarding a charge that a "public works" Contractor is not paying "prevailing wage". If a violation is found, the Commissioner is to assess wages and penalties against the Contractor (Labor Code Sec. 1741). The Contractor may request a review of the Commissioner's investigative findings and assessment by hearing before a state Administrative Law Judge, whose award may be challenged by a petition for "writ of mandate" to the Superior Court (Labor Code Sec. 1742). [As a practical matter, if the employee has won after an administrative hearing, the Superior Court is unlikely to reverse the findings].
  • You can review these and other rights concerning wage and hour law at the Labor Commissioner's web page found at DIR.
  • Finally, you may want to bring a class action against the non-complying Contractor (and subcontractors who are jointly liable) under a recent law entitled "The Private Attorney's General Act of 2004". This Act permits employees to sue in their own names to recover wages and penalties earlier recoverable only by the Labor Commissioner. The idea is that the Commissioner was unequipped and underfunded to enforce the Labor laws and so the CA legislature gave employees the direct opportunity to sue in court for wages and penalties. The employee must notify the Commissioner of the suit, thereby giving the Department the opportunity to act first. See an employee rights lawyer for more information about this option.
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