California Supreme Court Decides that Charter Cities Can Have Anti-Prevailing Wage Law Provisions In Their Charters
A new ruling by the California Supreme Court will allow a provision rejecting state prevailing wage laws (PWL) on city-funded public works to remain in the City of Vista’s charter.
Over strong dissents by Justices Werdegar and Liu, the court ruled 5-2 Monday in State Building and Construction Trades Council vs. City of Vista in favor of the City’s ability to pass local legislation which conflicts with the PWL. After the City approved its charter by special election in 2007, the council passed an ordinance prohibiting city contracts funded with City funds from requiring PWL be paid on those projects. The PWL requires all government entities to pay the prevailing rate to workers on public projects.
The Building Trades sued, arguing that not paying the prevailing rate has the effect of depressing local wage standards and undermining apprenticeship programs making the PWL a matter of statewide concern. But the court ruled Monday that a charter city has a right to set wage rates on projects owned, operated and funded by the City because this type of project is a “municipal affair.”
In Justice Werdegar’s words, “The majority’s approach in the case is neither fair nor reasonable.” Justice Liu, in his dissent, criticized the majority for refusing, “to undertake a factual or historical inquiry to determine the relative strengths of the state and municipal interests even though this is what our precedents instruct.”
The decision essentially maintains the status quo which means that when charter cities let city owned and operated public works projects to bid that are funded with city money they may side-step compliance with the PWL.
In practical terms, the decision means that a charter city with an anti-union majority on its city council, will not put a PWL provision in the bid package if the project is city owned and operated and is funded solely by City dollars (with no monies coming from the county, state or federal government.) It also means more general law cities, with anti-union councils, will try to convert to become charter cities.
The Building Trades now have their work cut out for them to change the status quo and convince Charter cities to include PWL, and to convince general law cities not to change to charter cities just to evade prevailing wage laws. The largest charter cities in California, including San Francisco, Los Angeles and San Jose, not only comply with the PWL but often have strong charter provisions containing additional wage compliance provisions so government contracting does not erode local construction wages or undermine local economies by allowing contractors on public works projects to pay less in wages and thereby reduce participation by construction workers in their local retail and service industries.
By Patty Gates