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California Prevailing Wage Law Expanded to Cover Private Projects

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By Jon Welner

PREVAILING WAGE LAW is California’s “other” minimum wage. It requires workers to be paid union wages on publicly funded construction projects. But in recent years, the law in California has EXPANDED well beyond its initial purpose. It has become a tool for workers to demand union wages on virtually any construction project in California. These claims can increase the cost of a major construction project by millions of dollars–and can be brought years after construction is complete.

welner oil.jpgFor the first time, some private projects are covered by California Prevailing Wage Law. Hospitals, refineries, and chemical plants are covered.

Since the 1930s, prevailing wage laws have applied only to projects receiving public funds. Until now.

In 2013, Governor Brown signed SB 54, a new California law that applied prevailing wage requirements to privately funded construction work at chemical facilities that handle hazardous materials, including refineries.

In 2015, the Governor signed AB 852, a similar law expanding prevailing wage to cover the privately funded construction of hospitals. The new law covers projects funded at least in part by conduit revenue bonds.

welner hospital.jpgThis is the first time that prevailing wage law has been applied to construction projects that receive no public funds.

This legislation opens the door to extending prevailing wage to other types of privately funded construction. No word yet on what’s next.

Jon Welner is a leading practitioner of prevailing wage law in California. He is a Partner at Jeffer Mangels Butler & Mitchell LLP (JMBM) and Chair of JMBM’s Prevailing Wage Group. Contact him at JWelner@jmbm.com.

JMBM’s Prevailing Wage Group advises and defends developers, contractors, and manufacturers on the most challenging and complex prevailing wage matters in California.