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Apr
2016
4

Prevailing Wages Win: CA’s SB7 Law Upheld, Charter Cities Can’t Skirt Proper Pay

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In a victory for the State Building Trades of California (SBCTC), the Court of Appeals upheld SB 7, which ensures charter cities pay prevailing wages on public works projects as a condition of eligibility for state construction funding.  The bill was upheld by a 2-1 vote as it was previously in September of 2014 by the Superior Court.

The four cities that sought to overturn the law — El Centro, Fresno, Vista, Carlsbad, and El Cajon — now have 40 days to decide if they will accept the decision or appeal it to the California Supreme Court.  

In a statement following the victory, one of many for the bill, SBCTC President Robbie Hunter commented:

The Legislature has the right to spend State construction money to maintain a skilled and trained construction workforce and support middle class jobs and apprenticeships, thereby using California’s tax dollars to drive the California economy. This is a victory not just for Building Trades Workers, but for taxpayers and citizens in charter cities, who are ensured of getting the best value and the best-built projects.”

The court did not find SB 7 to violate a charter city’s right to enact ordinances that conflict with state law on purely municipal matters, because SB 7 does not coerce cities but rather offers them a choice: to meet the requirements to obtain state funding for public works projects, or to forego eligibility for those funds.  Charter cities are free to obey prevailing wage standards or set their own standards and thus find their own funding.  

The court noted that legislature often creates financial incentives for local governments and that having financial incentives has historically been considered as constitutional.  

SB 7 has been a success in terms of project results.  Prior to SB 7, charter citydom was being pushed by anti-union groups as a way to circumvent the prevailing wage system.  However, many cities were unprepared for the challenges that came with charter status in the early days and wound up in financial distress after making the change.  

Following the original passage of SB 7, a group of 32 charter cities enacted measures to restore or reaffirm their prevailing wages.

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