AB 2451: A crucial step toward closing wage theft loophole

OPINION – California is poised to reap the benefits of historic infrastructure investments recently authorized in Washington, D.C., and Sacramento. Billions of dollars will soon be put to work restoring highways, repairing bridges, modernizing airports, bolstering our climate resiliency, and creating thousands of good-paying jobs in the construction industry.

As projects make their way from the drawing board to breaking ground, the State should be taking active steps to ensure these projects provide middle class wages, safeguard against misclassification, and utilize the most highly trained and efficient workforce available. At a time of urgent infrastructure needs with a President actively seeking to meet them, the State has an opportunity to champion the principle of fair compensation for all construction workers on publicly funded projects, while also providing much needed clarity to the Department of Industrial Relations (DIR).

Public works projects in California are covered by safeguards designed to ensure that bidders aren’t awarded contracts simply by paying lower wages than their competitors. Existing law requires the Director of the Department of Industrial Relations to establish a prevailing wage that must be paid to workers of particular crafts and job classifications. The determination of these wages is often based upon relevant collective bargaining agreements.

However, a loophole exists that allows those safeguards to be circumvented. When multiple collective bargaining agreements that have varying wage rates for overlapping classifications of work are submitted to DIR, below market or conflicting rates can prevail. This opens the door for some contractors to gain a competitive advantage over those that have agreements with crafts that have successfully negotiated for higher wages.

Such a situation nullifies the intent of the prevailing wage law and promotes lower wages for construction workers.

The fix is simple: Require that when multiple agreements for overlapping classifications are submitted to DIR, the higher rate shall prevail. A proposal to make that change in California, AB 2451 by Assemblymember Sabrina Cervantes, is now before the Legislature.

AB 2451 would prevent sliding wages by corroborating the original intent of the States’ Prevailing Wage Law: to make certain that workers on public projects are paid the true market rate and to require all bidders to use the same wage rate when bidding on such projects.

Some may argue that this change is an attempt to legislate “jurisdiction” among different trade unions, however, DIR has no legal authority over craft jurisdiction. AB 2451 would not alter classifications of jobs or restrict who could perform them. Rather, it would simply require that those performing a given job would be paid the fair market rate to do so. In other words, contractors would not be able to game the system by negotiating for lower wages with multiple trades.

The existing system can create perverse consequences. For example, when there are overlapping prevailing rates on a job site, it is not uncommon for apprentices from one trade to be paid a higher wage than a journeyman from another for doing the same job. In these situations, apprentices are not receiving the kind of training they need as the journeyman they are learning from was likely not trained in the task at a State Approved Apprenticeship Program. This limits an apprentices’ ability to advance their careers and uplift themselves into the middle class.

Californians know that their state critically needs the overdue investment in infrastructure which President Biden has recently delivered on. They also know that they need a skilled workforce to get it right.

Construction work requires long hours from workers who often must travel far from home. Workers risk life and limb to provide the infrastructure needed for our State to thrive. We owe it to these workers to make sure they get paid the fair wages they’ve negotiated for – wages that reflect the true value of their work.

Let’s fix this loophole by passing AB 2451 and not allowing a “race to the bottom” in public construction.

David Sikorski is the Business Manager of the International Union of Operating Engineers, Local 12, representing over 20,000 men and women employed in the construction industry.