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The California Assembly Local Government Committee has approved legislation, Senate Bill 7, that would effectively have charter cities require higher prevailing wage rates regardless of where the funding originates. If cities do not comply, they could be barred from any future state funding.

The legislation was introduced in response to a 2012 state Supreme Court ruling that upheld the city of Vista’s policy of not requiring contractors to pay prevailing-wage rates when only local money is being used. Current law has all cities apply prevailing wages if any state money is used on the construction project. Charter cities, or cities with home-rule governing powers, however, do not have to use prevailing wages if they are paying with local dollars only. Of California’s 120 charter cities, 51 have approved charter provisions that exempt them partially or completely from state prevailing wage requirements when they use their own money for city construction projects.

Critics of the bill say forced higher prevailing wage payments would drive up costs to taxpayers by as much as 30 percent and violate the charter cities’ sovereignty.  Supporters say there is a state interest to ensure public works projects pay a “living wage” that will attract the best-skilled local workers.

To ensure prevailing wages are being paid correctly on public works projects, many cities have utilized electronic monitoring software such as LCPtracker. The LCPtracker system will collect, check and verify the contractors’ and subcontractors’ certified payrolls, thus helping to ensure that all contractors are compliant with the labor laws.