May 052014

Branden Lopez, a Senior Investigator for the Center for Contract Compliance, requested the DIR investigate whether a San Marco’s project complied with state law. The DIR investigation concerned whether the City’s charter status exempts the payment of prevailing wage on projects funded with state gasoline tax revenues. The DIR found that a project funded in whole, or in part, by state gas tax requires the payment of prevailing wage. The decision is binding throughout California.

The Director of DIR, Christine Baker, says “Cities have no rights to gas tax revenues.”

This decision helps to clarify the boundaries when a project is considered a municipal affair (not requiring prevailing wage), or a statewide concern (requiring prevailing wage). Moreover, the DIR found the recent Supreme Court decision in State Building and Construction Trades Council of California, AFL-CIO v. City of Vista does not exempt the project from prevailing wage.

The City’s charter status “does not exempt . . . [San Marcos] from the requirement to pay prevailing wages” (Christine Baker, Director of DIR)

In 1994, the City elected to change from a general law city to a charter city allowing it to choose if a project requires prevailing wage or not, depending on the type of project and the funding source. When San Marcos chose not to require prevailing wage, it allowed contractors to pay minimum wage to workers building the City owned curb, gutter, and sidewalks. Additionally, the states apprenticeship requirements did not apply. The lack of compliance with the apprenticeship laws impairs the state’s goal of ensuring construction workers are trained properly, creating more efficient and safer jobsites. ”

Read the Determination here… pdf 2011-030 and 2013-006 Coverage Determination Letter 11.1.2013-1-1