Prevailing Wage Update: Charter Cities Exempt From Prevailing Wage Laws

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In the recent decision, State Building and Construction Trades Council of California, AFL-CIO v. City of Vista (Fourth District Court of Appeal, Division 1, Case No. D05218, Filed April 28, 2009), the California Court of Appeal held that the prevailing wage laws (California Labor Code§§ 1720-1780) do not represent matters of statewide concern and therefore a charter city such as Vista is not required to comply with prevailing wage laws for public works projects financed solely from city revenues. While a petition for hearing by the California Supreme Court is certainly likely, if this opinion is upheld it creates a major inroad into the application of prevailing wage laws in California. There are approximately 80 charter cities in California, including major centers of development activity, such as Los Angeles, San Francisco, San Diego, Anaheim, Long Beach, Riverside and San Bernardino. The potential cost differential between projects subject to prevailing wage requirements and those that are not is estimated to be between 20 and 30 percent, depending on the type of construction involved.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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