Nicole Rice

Prevailing wage bill would extend to private construction

By Nicole Rice, Policy Director, Government Relations

Capitol Update, March 10, 2017

A bill that could require higher wages to workers on many residential projects is scheduled to be heard by the Assembly Committee on Labor and Employment on March 15th. 

Assembly Bill 199 by Kansen Chu (D-San Jose) and the California Building and Construction Trades Council requires workers to be paid “prevailing wage” on residential projects that have any agreement with “the state or a political subdivision,” a provision that extends the requirement beyond redevelopment agencies, public agencies and low income housing projects currently proscribed under existing state law. Increasing the provision beyond these three existing agencies to any project that uses some sort of public funds will likely ensnare thousands of projects.

While the author argues that he simply wants to make sure workers get fair wages for projects using tax dollars, opponents to the bill claim that the severely ambiguous language appears to be a play by union proponents to extend prevailing wages to all residential development in the state – from two bedroom homes, to condo skyscrapers. Not surprisingly, local building industry associations are exceedingly alarmed and most likely will aggressively campaign to defeat the measure.

Concerned that this policy, if successful, could become a “camel’s nose under the tent” and expanded to cover all private construction projects, including commercial, CMTA and several other industry groups have joined in opposition to this measure.

According to independent analysts, the bill greatly increases prevailing wage requirements at a minimum. An expert in land use entitlement studied the bill and said it would most certainly increase the cost of housing for a variety of reasons.

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