California Legislature Clarifies and Expands Prevailing Wage Laws

Employment Law  

October 8, 2014

In 2014, Governor Brown approved a series of bills (AB 26, AB 1939, AB 2272, and SB 226) that clarify and expand the state’s prevailing wage law. California developers, contractors, and public entities should be mindful of the following:

  • Post-Construction Phase: An employer must pay prevailing wages for work performed during the post-construction phases of a public works project, including all cleanup work at the jobsite.
  • CASF Application: The new law expands the definition of public works to include infrastructure project grants from the California Advanced Services Fund (CASF).
  • Notice of Completion: These bills clarify the procedure for providing notice of completion or acceptance of a public work to the Labor Commissioner.  Specifically, the awarding body must furnish such documents within 10 days after receipt of a written request from the Labor Commissioner.
  • New Liability:  A contractor may bring an action against a hiring party to recover increased costs as a result of a subsequent decision that classifies a project, or any portion thereof, as a public work.  A project owner, developer, or hiring party may avoid liability by informing a contractor when the project requires prevailing wages.

As a result of these changes, public works employers should carefully review contracts to ensure they are paying employees the prevailing wage for post-construction work.  When a project requires prevailing wages, project owners should inform contractors accordingly.  Employers should also review projects to determine whether the project utilizes infrastructure project grants from the CASF.  Finally, awarding bodies should review the procedure for providing notice of completion or acceptance of a public work to the Labor Commissioner.