California prevailing wage law is a set of California state laws governing the requirement of contractors working on public works projects to pay their laborers, workers and mechanics prevailing wage rates determined by the Director of the Department of Industrial Relations. They are intended to promote the welfare of wage earners in the California construction industry.

California Labor Code History

California prevailing wage law was first established in 1931, the same year as the federal Davis-Bacon Act. This law was designed to ensure that the government would be unable to use its purchasing power to undermine the wages of its citizens as well as establish a precedent by paying the wages prevailing in a locality for each occupation hired by government contractors on publicly funded projects. (Assembly Committee on Labor and Employment 2015 Assembly Bill 852 preamble)

Over the years the definition of what constitutes “public works” has been amended, and additional requirements pertaining to apprentice usage, overtime requirements and contractor registration have been included in California prevailing wage law.

California Labor Code Purpose

“The California Labor Code promotes and develops the welfare of the wage earners of California, to improve their working conditions and to advance their opportunities for profitable employment.” (Department of Industrial Relations 2013)

California Prevailing Wage Provisions

California prevailing wage law provisions require that each contract over $1,000 (Labor Code § 1771) must pay prevailing wages to workers (Labor Code § 1723) employed by contractors engaging in the execution of any public works (Labor Code § 1720-1720.9) project.

The California Code of Regulations establishes that the Director of the Department of the Industrial Relations is the authority who governs the coverage of prevailing wage law and prevailing wage rate by locality and occupation. Judicial review can supersede the Department’s determination.

Prevailing wage law in California has developed over time into a web of rules and regulations designed to combat: wage fraud in the construction industry; unfair competition in the bidding process; a shrinking workforce of skilled construction workers in California and America at large; a shrinking pool of construction apprentices; among many other issues.

California Labor Code and Related Codes

California Labor Codes § 1720-1784 govern Scope and Operation, Right of Action and Wages under California prevailing wage law. Codes § 1810-1815 covers working hours and overtime and § 1860-1861 covers workers compensation.

California Code of Regulations – Chapter 8 – Office of the Director – Sub chapter 3 –Payment of Prevailing Wages on Public Works covers additional legislation regarding prevailing wages on public works too. Link.

California Code of Regulations – Chapter 2 – California Apprenticeship Council – Sub chapter 2 – Apprenticeship – Article 10 – Required Apprentices on Public Works Contracts covers additional legislation regarding apprenticeship requirements on public works too. Link.

Specific awarding body bylaws or public funding stipulations may contain their own prevailing wage legislation.

e.g. Proposition 84 (Safe Drinking Water, etc. Bond Act of 2006) grants contain legislation enacting “Labor Compliance Programs” to be established by the project owner to oversee labor compliance activity on projects using these funds.

e.g. Awarding bodies with “Project Labor Agreements” in place (often referred to as PLAs) require their General Contractor partners to agree to numerous supplemental terms before awarding public works contracts.

California Labor Code Prevailing Wages

The prevailing wage rate is the basic hourly rate paid on public works projects to a majority of workers engaged in a particular craft, classification or type of work within the locality and in the nearest labor market area. The required minimum prevailing wage rates are calculated by the Office of Policy, Research and Legislation and published twice a year, February 22nd and August 22nd and can be found on this website, https://www.dir.ca.gov/OPRL/dprewagedetermination.htm.
These rates are often rates taken from established Collective Bargaining Agreements (CBAs) of locally organized labor.

California Labor Code Coverage – Type of Project

“Construction, alteration, demolition, installation or repair work”

Labor Code § 1720-1720.9 defines the term “public works”. Typically, the general rule of thumb to know if a contract should contain prevailing wage clauses and stipulations is to ask,
“Is this project ‘construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds‘?”
This definition covers most construction related activities but is also expanded to cover: pre-construction work, carpet laying in public buildings, modular furniture installation, tree-removal in certain circumstances and post-construction clean-up operations. The list is quite long and will be discussed in greater detail in a future Blog post.

“Paid for in whole or in part by public funds”

To understand if a project has “been paid for in whole or in part out of public funds” requires review of Labor Code § 1720 (b). Money, or the equivalent of money paid by the state or political subdivision used to support a project which meets the terms established above is going to be considered public works. But this isn’t the only public payment method recognized under California law. State assistance in construction can trigger a project to become public works; transfer of a public asset “for less than fair market price”; and “fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, that are paid, reduced, charged at less than fair market value, waived, or forgiven by the state”; loans or credits given which are to be repaid on a contingent basis.

California Labor Code Coverage – Workers

Labor Code § 1772 provides that workers employed “by contractors or subcontractors in the execution of any contract for public work” are deemed to be so employed. Labor Code § 1723 defines a worker as including “a laborer, worker, or mechanic.”

If a worker is engaging in a contracted activity on the site of work of a public works project then they are going to be typically be covered under prevailing wage law. But this definition is not inclusive enough on its own. On-hauling of materials [if they are immediately incorporated into the flow of construction], the off-hauling of refuse, and certain crafts’ commuting travel time compensation can all be considered public works on a case-by-case basis too. Ready-mix concrete delivery is also covered works per Assembly Bill 219’s addition of Labor Code§ 1720.9.

California Labor Code Coverage – Worker Exceptions

Exceptions to this coverage include volunteers, public agency’s own forces, some janitorial work, guards and landscape maintenance workers at sheltered workshops. Labor Code § 1720.4 provides that the prevailing wage laws do not apply to work performed by a “volunteer.”

“Volunteer” is defined as “an individual who performs work for civic, charitable, or humanitarian reasons, for a public agency or corporation qualified … as a tax-exempt organization, without promise, expectation, or receipt of any compensation for work performed.”

Labor Code § 1771 expressly provides that the prevailing wage requirement is “not applicable to work carried out by a public agency with its own forces.”

The janitorial exception to prevailing wage requirements applies to “routine and recurring janitorial services, such as washing, vacuuming, litter removal, etc. at a public facility.” (Division of Labor Standards Enforcement Public Works Manual May 2018)

Guards are exempt due to the “protection of the sort provided by guards, watchmen, or other security forces” (8 CCR § 16000) being considered akin to the recurring and routine nature of maintenance work.

Still Have Questions

Contact Legion Consulting for California Labor Code compliance assistance. Reviewing or fortifying contract language, tailored training seminars, complete project document management, compliance audits. Legion Consulting is your best choice for a compliant project. Call us today.

TheDavis-Bacon Act , established in 1931, is a federal law governing the requirement of contractors working on federally assisted or funded public works projects to pay their labors and mechanics no less than the local prevailing wage rates determined by the Secretary of Labor.

Davis-Bacon Act History

The Act was named after its sponsors, James Davis (Pennsylvania senator and former Secretary of Labor), and Representative Robert Bacon of New York and signed into law by President Herbert Hoover on March 3, 1931 .

Davis-Bacon Act Purpose

The Act’s purpose was to ensure workers earn a fair wage a fair wage and to provide local contractors a fair opportunity to compete for local federal government contracts. (Federal Highway Administration Davis-Bacon FAQ)

Davis-Bacon Act Provisions

“The Davis-Bacon Act, as amended, requires that each contract over $2,000 to which the United States or the District of Columbia is a party for the construction, alteration, or repair of public buildings or public works shall contain a clause setting forth the minimum wages to be paid to various classes of laborers and mechanics employed under the contract. Under the provisions of the Act, contractors or their subcontractors are to pay workers employed directly upon the site of the work no less than the locally prevailing wages and fringe benefits paid on projects of a similar character. The Davis-Bacon Act directs the Secretary of Labor to determine such local prevailing wage rates.” (Department of Labor – Wage and Hour Division Summary)

Davis-Bacon Related Acts (DBRA)

The Davis-Bacon Act prevailing wage provisions also apply to the “Related Acts,” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance.

[This is why federal prevailing wage project contract language or project descriptions may utilize the acronym “DBRA” – Davis-Bacon Related Acts rather than the typical “DBA” – Davis-Bacon Act.]

Included in the language of these Related Act statutes are references to the DBA labor standards provisions and the requirement that laborers and mechanics be paid prevailing wage rates. Since Congress is continually enacting and amending legislation, the list of the DBRAs in the regulations may not be completely up to date. Consequently, it may be necessary to consult the regional office for verification of DBRA coverage. (Department of Labor Regional Offices)

Davis-Bacon Prevailing Wages

Davis-Bacon wages are “based on the wages the Secretary of Labor determines to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work” in that local area (40 U.S.C. 3142). These wage determinations can be found online at wdol.gov.

Davis-Bacon Coverage – Type of project

29 C.F.R 5.2(j) limits the coverage of the Davis-Bacon Act to “construction, prosecution, completion, or repair” work which is defined by the Department of Labor to mean “all types of work done on a particular building or work at the site thereof (including work at a facility deemed part of the site of the work) by laborers and mechanics of a construction contractor or construction subcontractor including without limitation:

• Altering, remodeling, and installation (where appropriate) on the site of the work of items fabricated off-site
• Painting and decorating
• The manufacturing or furnishing of material, articles, supplies or equipment on the site of the building or work
• Transportation between the site of the work (within the meaning of 29 C.F.R 5.2(l)) and a facility which is dedicated to the construction of the building or work and deemed a part of the site of the work (within the meaning of 29 C.F.R 5.2(l))”

Remember, as mentioned earlier in the “Davis-Bacon Provisions” section, only projects with a total contract value of over $2,000 are covered by this Act.

29 C.F.R references can be found here.

Davis-Bacon Coverage – Workers

The Code of Federal Regulations, a laborer or mechanic “includes at least those workers whose duties are manual or physical in nature . . . as distinguished from mental or managerial” (29 C.F.R. 5.2).

Davis-Bacon Coverage – Site of Work

The “site of the work” is the physical place or places where the building or work called for in the contract will remain and any other site where a significant portion of the building or work is constructed, provided that such site is established specifically for the performance of the contract or project. See 29 CFR 5.2(l)(1). This definition typically stretches to the boundaries of the contracted construction activities but on larger projects can include secondary work sites if their existence is established for and dedicated to the specific Davis-Bacon Act public works project.

Still Have Questions?

Contact Legion Consulting for Davis-Bacon compliance assistance. Reviewing or fortifying contract language, tailored training seminars, complete project document management, compliance audits. Legion Consulting is your best choice for a compliant project. Call us today.

Trucking on California or Federal prevailing wage projects?

Call Legion Consulting and organize your personalized 2 hour training.

– Ask questions of two experts in the prevailing wage field with no judgment and honest answers.

– Leave with your very own Trucking Compliance packet to reference in the future.

– Have the legal code references to use when asked for documentation you don’t need to provide!

– Avoid heavy compliance penalties by operating in compliance.

– And for Trucking Dispatch companies Legion also provides a Compliance Tracking Log for no additional cost with support on how to go about using it.

This seminar contains everything from: Owner Operator vs Employee responsibilities; State/Federal funding requirements; Certified Payroll Reporting formatting and tips; Prevailing Wage Rates – what to pay and how to pay them; California DIR Registration – Who/Why/When & How To; AB219 for Ready-Mix Concrete Suppliers and much more. Call us now.