Calif. SC: Charter cities can set policies on prevailing wages

Jessica M. Karmasek Jul. 3, 2012, 12:20pm


SAN FRANCISCO (Legal Newsline) - The California Supreme Court said this week the state's charter cities have the right to establish their own policies concerning government-mandated construction wage rates, also known as prevailing wages, on purely municipal construction projects.

The Court ruled Tuesday that the city of Vista -- along with more than 100 other charter cities -- has the constitutional freedom under its own charter to decide what its construction contractors should pay on taxpayer-funded construction that is only funded with city money.

"In this case, we conclude that no statewide concern has been presented justifying the state's regulation of the wages that charter cities require their contractors to pay to workers hired to construct locally funded public works," Justice Joyce L. Kennard wrote in the 22-page majority opinion.

Chief Justice Tani Gorre Cantil-Sakauye and justices Marvin Baxter, Ming W. Chin and Carol A. Corrigan joined.

"Here, the state law at issue is not a minimum wage law of broad general application; rather, the law at issue here has a far narrower application, as it pertains only to the public works projects of public agencies. In addition, it imposes substantive obligations on charter cities, not merely generally applicable procedural standards," Kennard wrote.

"These distinctions further undermine the (State Building and Construction Trades Council of California, AFL-CIO's) assertion that the matter here presents a statewide concern and therefore requires Vista, a charter city, to comply with the state's prevailing wage law on the city's locally funded public works projects."

The Associated Builders and Contractors-California Cooperation Committee, or ABC-CCC, said the Court's ruling would help contractors and cities more easily comply with prevailing wage laws.

"A lot of the issues with contractors failing to comply with the state's prevailing wage laws are simply because these laws are complicated, and often burdensome even to honest contractors. The spirit of the law is that contractors compensate workers fairly and compete on factors other than wages and benefits," John Loudon, ABC-CCC's executive director, explained.

"The Court's decision is another instance of taxpayers trying to bring some balance to the extreme positions coming out of state government. We will continue to work with charter cities as they create their own simpler laws to ensure better compliance."

Loudon said he hopes the decision will inspire the state Legislature to reform state laws to ensure better compliance.

"Even organized labor recognizes the need for flexibility with the law as they are actually seeking the ability to reduce worker pay under prevailing wage laws," he said.

The ABC-CCC is one of California's leading authorities on government-mandated construction wage rates.

In fact, it has published two editions of the first and only guidebook on the status of prevailing wage laws in the state's 121 charter cities.

From Legal Newsline: Reach Jessica Karmasek by email at

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