Is My Employer Required to Pay “Prevailing Wages” in California?
Nick Ferraro | March 15, 2022 | Wage and Hour
The California Prevailing Wage Laws require employers to pay employees in public works projects the prevailing wage. The prevailing wage is determined by the California Department of Industrial Relations (DIR).
The wages depend on the project’s location and the type of work being performed by the employee. Generally, the state bases prevailing wages on rates set by collective bargaining agreements. In other words, employees are paid state-determined “union rates” when working on publicly-funded construction projects.
How Are Prevailing Wages Determined in California?
The wages for prevailing wage jobs are set by and enforced by the government. Prevailing wages include rates for basic hourly pay, overtime wages, and minimum fringe benefits. The wages cover all work performed on public works projects.
Your job classification determines the prevailing wages you receive for services performed on a public works project. Calculating prevailing wages can be challenging if you work on several projects or have job responsibilities that encompass more than one classification.
Classifications of work performed on public work projects include, but are not limited to:
- Operating engineer
- General laborer
- Hazardous material worker
- Cement mason
- Asbestos worker
- Fence builder
In addition to your classification, the region where you work directly impacts the rate of prevailing wages for public works jobs. Therefore, the employees on public work jobs in San Diego might be entitled to a different prevailing wage than employees in Sacramento. You must look at both your job classification and the location of your job to calculate the prevailing wage rate.
The prevailing wage is the minimum amount your employer must pay you for working on public works jobs. Setting a minimum wage for public works jobs prevents employers from underbidding projects by underpaying workers. Everyone who bids on a public works job must pay their employees the same minimum wage per hour.
Violations of the California Prevailing Wage Laws
Employers may violate the prevailing wage laws in several ways. Common violations of the prevailing wage laws include:
- Failing to pay an employee the required minimum hourly wage for work on a public works project
- Failure to pay overtime wages to an employee on a public works job
- Misclassification of employees to avoid paying prevailing wage rates
- Failing to include required fringe benefits for employees on public work projects
Employers may also violate the recordkeeping provisions and other requirements of the prevailing wage laws. Contracts and subcontractors who fail to keep detailed records and meet all requirements under the law could face penalties for those violations. In addition, if the violations relate to unpaid wages, the employees have a claim against the employer.
Are There Exceptions to the Prevailing Wage Requirements in California?
Yes, there are some exceptions. Not everyone who works indirectly with a public works project is covered by the law.
For example, companies that supply materials for public works projects are not required to pay their employees the prevailing wage rate. Likewise, companies that deliver materials and supplies to public work job sites are not covered by the law. The employees perform incidental work on the project instead of working directly on job duties required to complete the project.
However, if a company delivers materials AND performs work on the job site, the employees could be covered by the prevailing wage laws. If you have any doubts about whether you should receive prevailing wages, talk to an employment attorney about your situation.
The Definition of Public Works Has Expanded
Employees in construction should understand that the definition of public works has significantly expanded. That means an increased number of construction workers may be entitled to prevailing wages. For example, work for a special district can be considered public work. The California Supreme Court made this ruling in Kaanaana v. Barrett Business Services Inc.
It may not be easy to know whether your job entitles you to prevailing wages. One or more court decisions could address your situation. Talk with a wage and hour lawyer if you believe you are entitled to prevailing wages.
Seeking Compensation for a Prevailing Wage Claim in California
The laws regarding prevailing wages can be difficult to understand. If the wages on your pay stub do not match the prevailing wage rates, you might have a claim against your employer. Your employer may owe you significant back wages for violating the prevailing wage laws.
Furthermore, your employer cannot retaliate against you for filing a prevailing wage claim with the state. If you were fired for filing a claim or raising the issue with your employer, you might want to consider filing a wrongful termination lawsuit.