Senate, Assembly Agree on Budget Language to Fund Prevailing Wage Enforcement

May 22, 2014 - In a major victory for California Building Trades workers and honest contractors, Senate and Assembly Budget Subcommittees have agreed on budget language that will guarantee adequate funding for prevailing wage enforcement, and also establishes important minimum qualifications for contractors on public works projects. This culminates a five-year-effort by the State Building Trades to ensure adequate permanent funding for the Department of Industrial Relations (DIR) to enforce worker protection laws. The agreement of both houses means this language will be in the final budget voted upon by the Senate and Assembly, and sent to Governor Jerry Brown for his signature.

The language creates a public works contractor registration fee of $300 per year for contractors who bid or perform work on public works projects, to cover DIR's current $11.4 million annual cost of public works enforcement. The fees go into the Public Works Enforcement Fund and will be used solely to fund enforcement of public works laws such as prevailing wage, to administer the contractor registration requirement, and for other Labor Code enforcement by the Labor Commissioner.  Since that fund was created in 2009, it has been funded by an uncertain mix of revenue sources that has varied from year to year. Now, that revenue will be assured.  The bill also expands DIR's enforcement to all public works projects, rather than only bond-funded projects.

The language also establishes minimum qualifications for contractors to be certified as eligible to work on public works projects, including providing workers' compensation coverage, no unpaid wage or penalty assessments, and no violations of the registration requirement once it becomes effective. This provides the benefit of removing bad contractors from public works projects, or filtering them out before they start, assuring a level playing field for law-abiding contractors that submit the lowest bid.

This agreement is a major milestone in the long fight to protect workers' wages, ensuring by statute that the DIR will have the permanent resources it needs to do the job effectively. In the past, governors unfriendly to workers have stopped the discretionary funding of compliance enforcement on prevailing wage. This can no longer be the case.

State Building Trades President Robbie Hunter gives credit to the tireless efforts of the Council's legislative representatives Cesar Diaz and Jeremy Smith for securing this victory for workers of the affiliated trades.


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