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Double Deja Vu: AB 219 is Reinstated!

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 U.S. Court of Appeals Has Revived AB 219 Once Again!

In a dizzying turn of events, the U.S. Court of Appeals has revived AB 219 for a second time. Less than three weeks ago, I posted an article describing how the U.S. District Court issued a permanent injunction overturning AB 219, effectively striking it down for the second time. Now it’s back!

A Quick Recap

AB 219 took effect on July 1, 2016. It applied California prevailing wage requirements to the delivery of ready-mix concrete to public works. This was big news for two reasons: (1) it hit the ready-mix concrete industry—and all of the businesses that depend on it—very hard; and (2) it represents the first time that prevailing wage requirements have been imposed on material suppliers (as opposed to on-site contractors).

On June 30, 2016—the day before AB 219 took effect—eight ready-mix companies filed a lawsuit in federal court challenging the constitutionality of the new statute on Equal Protection grounds. In essence, they argued it was unfair to single out ready-mix concrete companies for special treatment, leaving all other material suppliers unaffected.

Twists and Turns

Since then, the court battle has taken a number of dramatic twists and turns. AB 219 has been suspended, reinstated, overturned, and revived as follows:

  • July 1, 2016—AB 219 takes effect.
  • Oct. 21, 2016—District Court issues preliminary injunction suspending enforcement of AB 219. AB 219 not in effect.
  • Dec. 16, 2016—Court of Appeals stays the preliminary injunction pending appeal. AB 219 back in effect.
  • Mar. 14, 2017—District Court issues permanent injunction overturning AB 219.
    AB 219 not in effect.
  • Apr. 19, 2017—Court of Appeals stays the preliminary injunction pending appeal. AB 219 back in effect.

What a ride!

Barring unforeseen circumstances, this time AB 219 will remain in effect until the Court of Appeals issues its final decision, which should be in 12 to 18 months.

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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.