SB 975: What It Does for Unions..

SB 975, Section 1720 of the Labor Code, was signed by Governor Gray Davis in 2001, and became law on January 1, 2002. This new law makes a wide variety of work subject to the payment of prevailing wages.

Housing developers, who previously avoided paying prevailing wages, will now have to pay the prevailing wage for parks, fire stations, infrastructure, roads, landscaping, sewers, water, street lighting, curbs, gutters, sidewalks and virtually anything connected to the project except for the private residences themselves.

Redevelopment agencies can no longer escape paying prevailing wages. When they give anything of value to developers, they must pay prevailing wages. The new law ensures that union contractors will be competitive with non-union contractors who have been encroaching on their work. The law levels the playing field for all contractors.

In brief, it makes it clear that "Public Projects" will now include any project subject to prevailing wages if it is "paid for in whole or in part out of public funds". This includes waivers of rents, fees, permit costs, insurance or bond premiums, loans, low interest rates, gifts of land or easements or right-of-ways, power, water, or parking places. Anything of value given by a government or agency triggers the payment of prevailing wages and virtually all housing developers enjoy some public benefit.

Some things are exempted from the law, such as private residential housing that is not built pursuant to an authorization or agreement with a state or redevelopment agency or local housing authority. Also exempted is low-income housing projects funded solely with redevelopment set-aside funds.

It is critical for business managers and compliance officers to be vigilant to look for these new opportunities for work as they check for compliance on wage and hour issues, and other labor law issues.

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