Prevailing wage laws in California are a cornerstone for ensuring fair pay for employees working on public works projects. These regulations are critical for workers such as electricians, plumbers, carpenters, laborers, and others who contribute to projects funded by public money. However, these laws can be complex, involving various federal and state statutes, eligibility criteria, wage determinations, and penalties for non-compliance.

This comprehensive guide simplifies essential information about California’s prevailing wage laws, their applications, and the processes for workers to protect their rights.

What Are Prevailing Wages?

Prevailing wages are predetermined hourly rates of pay for workers employed on public works projects. Southern California wage and hour class action defense attorney at the law firm California Business Lawyer & Corporate Lawyer Inc. said that wages are set to reflect the standard compensation for similar work in a specific locality and are determined by the California Department of Industrial Relations (DIR). However, workers should also be aware that prevailing wage violations can overlap with Wage and Hour Claims, adding another layer of complexity to their pursuit of fair compensation.

California wage and hour employer defense lawyer at the Nakase Law Firm said that under California Labor Code Sections 1723 and 1771, contractors and subcontractors who are awarded public works projects valued at $1,000 or more must pay workers no less than the general prevailing wage rate for work performed in the project’s location.

The goal of prevailing wage laws is twofold:

1. To ensure workers are paid fairly for their labor, especially on taxpayer-funded projects.
2. To prevent contractors from underbidding projects at the expense of worker compensation, creating a level playing field for competition.

The “prevailing rate” comprises two components:

• Basic Hourly Rate: Minimum cash wage an employer must pay.
• Total Hourly Rate: Includes fringe benefits like health insurance, vacation pay, and pensions. Employers may offset these benefits against the total hourly rate.

What Qualifies as a Public Works Project?

Under Labor Code Sections 1720-1720.9, public works projects are defined as “construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part by public funds.” Examples include:

• Construction of public housing (e.g., HUD housing)
• Parks and recreational facilities
• Roads, bridges, and highways
• Government buildings such as courthouses and jails
• Public education facilities (schools, universities)
• Healthcare facilities funded by the government
• Power plants, airports, and other infrastructure projects

Maintenance Work: Even activities like tree cutting along highways or building upkeep can qualify as public works projects under prevailing wage laws.

Private Projects: Some privately funded projects may also require prevailing wages if they include public improvements to meet regulatory obligations.

Workers Covered Under Prevailing Wage Laws

Prevailing wage laws apply to workers employed by contractors and subcontractors on public works projects. Covered workers include:

• Carpenters
• Electricians
• Plumbers
• Roofers
• Laborers
• Bricklayers
• Painters
• Mechanics
• Landscapers
• Heavy machine operators

Apprentices may also qualify but are subject to a separate prevailing wage scale. Contractors employing apprentices must also employ journeymen in the same trade.

California vs. Federal Prevailing Wage Laws

Both California state laws and federal laws mandate prevailing wages for public works projects, but there are some key differences:

• California Law (Labor Code 1774): Requires prevailing wages for public works projects valued at $1,000 or more.
• Federal Law (Davis-Bacon Act): Applies to federally funded projects valued at $2,000 or more.

If a project involves both state and federal funding, the higher wage rate must be paid.

Prevailing Wages and Overtime

Workers earning prevailing wages are also entitled to overtime pay under California Labor Code 510. The rules are as follows:

• 1.5x Pay: For hours worked beyond 8 hours in a single day or 40 hours in a workweek.
• 2x Pay: For hours worked beyond 12 hours in a day or over 8 hours on the seventh consecutive workday.

Travel and Prevailing Wages

Travel time for public works projects may also be compensable under prevailing wage laws. Examples include:

1. Loading and Transporting Materials: If an employee is required to pick up materials from a company facility before arriving at the job site, the travel time is compensable.
2. Multiple Job Sites: If a worker travels between multiple public works sites in one day, the travel time is paid at the prevailing wage rate.

However, travel from home to the first job site is not compensable.

How Prevailing Wage Rates Are Determined

The California DIR determines prevailing wage rates based on data from labor organizations, collective bargaining agreements, and employer associations. These rates are updated annually and organized by:

• Location: Rates differ by county or region (Northern California, Southern California, etc.).
• Trade or Craft: Specific classifications such as carpenter, mason, electrician, and others.

Workers can access prevailing wage determinations on the DIR’s website.

Employer Accountability and Record-Keeping

Public works contractors and subcontractors are required to maintain accurate payroll records, which must include:

• Worker names and addresses
• Work classifications (e.g., plumber, carpenter)
• Hours worked (straight time and overtime)
• Actual wages paid

These records must be certified under penalty of perjury to ensure accuracy and transparency. Employers must submit weekly certified payroll records to the Labor Commissioner. Failure to do so can result in criminal charges and penalties.

Common Prevailing Wage Violations

Employers can violate prevailing wage laws in several ways, either intentionally or unintentionally. Common violations include:

1. Misclassification: Assigning workers to incorrect job classifications to pay lower rates.
2. Failure to Pay Wages: Not paying the correct prevailing wage or fringe benefits.
3. Improper Record-Keeping: Inaccurate payroll records resulting in underpayment.
4. Overtime Miscalculations: Failing to pay overtime for hours worked beyond legal limits.
5. Failure to Submit Records: Contractors neglecting to submit certified payroll records.

Penalties for Violating Prevailing Wage Laws

Employers who violate prevailing wage laws face significant penalties, which may include:

• Payment of back wages plus interest
• Liquidated damages paid to workers
• Fines of up to $200 per worker, per day for unpaid wages (Labor Code 1775)
• Reimbursement of investigation costs to the DIR
• Criminal charges for willful violations
• Disqualification from bidding on public works projects for a specified period

Filing a Prevailing Wage Claim

Workers who believe they have been underpaid can file a public works complaint or wage claim with the Division of Labor Standards Enforcement (DLSE). Steps to file a claim include:

1. Gather evidence:
   • Payroll records
   • Timecards
   • Proof of misclassification or underpayment
2. Submit a complaint:
   • Use DLSE-PW Form 1 to file a public works complaint.
3. Investigation:
   • The Labor Commissioner will investigate the claim.
   • Violations result in citations, back pay, and penalties.

Workers may also consult employment attorneys to assist with their claims and ensure proper compensation.

Who Is Exempt From Prevailing Wages?

Certain individuals and projects are exempt from prevailing wage laws, including:

• Volunteers: Workers performing services without expectation of compensation.
• Charter Cities: Projects conducted in charter cities may be exempt.
• Federal Projects: Projects under complete federal control.
• Clerical Workers and Security Staff: These roles do not qualify for prevailing wages.

Conclusion

California’s prevailing wage laws play a pivotal role in protecting workers’ rights and ensuring fair compensation for labor on public works projects. From wage determinations to overtime pay and penalties for violations, the laws provide robust safeguards for employees while holding employers accountable.

For workers, understanding prevailing wage laws is essential for recognizing violations and securing fair pay. If you suspect your rights have been violated, gathering evidence and filing a complaint with the Division of Labor Standards Enforcement can help recover the wages you deserve.

By upholding prevailing wage standards, California ensures public funds are used responsibly while promoting fairness and economic equity for all workers.

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