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.
The federal prevailing wage statute, known as “Davis-Bacon,” has been in place for over eighty years. In essence, it requires that union wages be paid on all federal construction projects.
Over the years, there have been occasional efforts to weaken or eliminate the Davis-Bacon Act, but none have been successful. The last major effort was during the Reagan Administration. In addition, a number of presidents have temporarily suspended Davis-Bacon during public emergencies, as President Bush did in the aftermath of Hurricane Katrina. More recently, bills to repeal Davis-Bacon were introduced in the House and Senate in 2015 (H.R.987 & S.1785). But with Democrats firmly in control of the Senate and the White House, the bills were purely symbolic efforts.
Now, for the first time in memory, there is a real possibility that the Davis-Bacon Act could be repealed or significantly scaled back. With Republicans in charge of the White House and both houses of Congress, anti-union forces see a major opportunity. President Trump has promised to make a huge investment in infrastructure. Will Mr. Trump be supportive of a statute that substantially increases the cost of this work, in order to provide higher wages to construction workers?
The answer is not yet clear. The President is generally seen to be pro-business and anti-union. However, it is possible that Mr. Trump will conclude that Davis-Bacon provides a political benefit by pleasing blue-collar white workers, the voters who landed him in the oval office. At a recent meeting with union leaders in the White House, President Trump told the assembled group that he is aware of the Davis-Bacon issue, but did not take a position.
In the meantime, Senator Jeff Flake of Arizona has introduced a bill to eliminate Davis-Bacon requirements for federal transportation projects: the Transportation Investment Recalibration to Equality (TIRE) Act. The TIRE Act may well represent the beginning of the end for Davis-Bacon. Time will tell.
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.