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Prevailing Wage Requirements Expanded To Private Construction Projects (CA)

Posted by National Alliance for Fair Contracting on

by Richard E. Donahoo
Posted on July 19, 2019
Construction Law Wage and Hour Law

The San Jose Mercury News reported recently that prevailing wage requirements were expanded by San Jose to certain private construction projects. Labor groups herald this decision as a step toward better labor protections.

The San Jose City Council voted in June to require prevailing wage pay from contractors getting subsidies from the city for their projects. There are exceptions to the new ordinance that came in the wake of the sentencing of Silvery Towers project contractor Job Torres Hernandez.

Exceptions to the new requirements include:

  • Some affordable housing projects
  • Certain land-use categories where construction is unlikely without a subsidy

Additional requirements such as local hiring are expected to come up again when the council is back in session. Labor groups are particularly interested in adding local hiring guidelines, apprentice programs and programs for hiring disadvantaged workers associated with downtown high-rise development.

Some business groups including Silicon Valley Organization backed the prevailing wage vote in order to advance the downtown development.

Read the full story in “San Jose expands prevailing wage requirements on private construction projects” …

Prevailing wage rates are set to ensure that workers are fairly compensated for their work and that a strong and skilled workforce remain in place to provide quality construction skills for local construction projects. Prevailing wage rates for specific construction trade classifications (i.e. Laborer, Carpenter, Iron Worker, Traffic Control Technician, Operator and Teamsters) in California are set primarily by the Department of Industrial Relations, and are applied to projects funded by the public and awarded to contractors by public agencies also referred to as the “awarding bodies.” These projects often are also subject to apprenticeship requirements.

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San Jose approves prevailing wages for private construction projects (CA)

Posted by National Alliance for Fair Contracting on

by Grace Hase
JUNE 25, 2019

While the unlicensed Silvery Towers subcontractor Job Torres Hernandez received his sentence in federal court for harboring undocumented workers in slave-like conditions, San Jose lawmakers on Tuesday passed a law to prevent construction companies from exploiting low-wage workers on private construction projects that receive tax breaks.

Spurring from negotiations with labor unions more than a year ago, private construction companies will now be required to pay a prevailing wage on projects that receive city subsidies. The now-renamed Silvery Towers, which is located at 188 W. St. James St., took center-stage during Tuesday’s discussion as union members urged the council to make sure history didn’t repeat itself.

“These protections strike reasonable balance to decrease the likelihood of workers being exploited by shady contractors,” said Will Smith, a union representative from IBEW Local 332.

But years before Hernandez’s conviction, Silvery Towers received a high-rise incentive from the city – reducing the amount of park fees the developer paid from $19,000 per unit to $7,650 per unit. At 643 units, the project received an estimated $4.9 million in fee breaks – which would have made it subject to the city’s new law.

Although many developers and business organizations didn’t support the new standards — as expressed during public testimony and through letters submitted to the city – not approving them could jeopardize extending the high-rise fee reduction program, business leaders said.

“While The SVO is firmly opposed to layering additional costly regulations onto private development projects, we also recognize that the standards are a significant piece of a complex puzzle in extending the Downtown High-Rise Fee Reduction program,” silicon valley organization President Matthew Mahood wrote in a letter to the council. “The program would address our current housing crisis, while also adding direly needed economic development to downtown San José.”

While councilors mainly agreed on supporting worker protections, they worried that additional regulations could stall the construction of new housing units – they ultimately voted to hire a consultant to study the impacts on projects already in the city’s pipeline.
“(We need to make) financially feasible on both the backs of the future residents and the workforce that builds the units,” Councilmember Raul Peralez said. “It’s an important balance to strike.”

…

“The City Council’s decision today sends the right message to greedy developers and shady contractors,” Steve Flores, business manager for UA Local 393, told San José Spotlight. “It is our hope that the workforce protections adopted today will prevent another Silvery Towers from occurring and will provide construction workers a family sustainable wage.”

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