Building Trades

Municipalities in California Must Pay Prevailing Rate

October 15, 2013
By Neal Tepel

Darrell Steinberg


Governor Jerry Brown signed SB 7 October 13th into law, effectively mandating the payment of prevailing rate by all Municipalities in California including charter cities. The law explicitly targets cities that have voter-approved provisions in their charters that authorize the optional use of prevailing wage.

The bill was authored by Senate President Pro Tem Darrell Steinberg and encouraged by the State Building and Construction Trades Council. It stems from AFL-CIO’s three year legal fight with the City of Vista, in which the California Supreme Court ruled in favor of Vista’s right to exercise control over its municipal affairs. The union-friendly bill will mandate every california municipality comply with prevailing wage laws

Charter cities that do not mandate prevailing wage will lose their autonomy over public works projects. SB 7 will even apply to cities where public works projects are entirely funded by municipal tax dollars.

Prevailing wage is determined by an intricate formula set by the California Department of Industrial Relations. It essentially amounts to union-level pay.
Supporters believe the bill will protect middle-class jobs and ensure that public works projects are completed by the highest-quality of laborers. Its generally recognized that prevailing wage jobs attract a highly-skilled, trained workforce.

Critics, including the League of California Cities, are concerned about both the loss of home rule and the bill’s impact on civic projects. Those that oppose this prevailing wage legislation have stated that the bill will cause labor costs be rise.

October 14, 2013

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