California Construction Trucking Association (CCTA)

The California Supreme Court has answered the question whether charter cities need to comply with the California Prevailing Wage Law when building locally financed construction projects.
The answer is “No,” according to the decision in State Building and Construction Trades Council of California, AFL-CIO v. City of Vista. .

Building trades labor unions challenged an ordinance that allowed Vista, a charter city, to opt-out of the prevailing wage law on locally financed construction projects. Under the state Constitution, the ordinances of charter cities supersede state law with respect to “municipal affairs” (Cal. Const., art. XI, § 5), but state law is supreme with respect to matters of “statewide concern.” This concept of municipal affairs is also called the “Home Rule” doctrine.

The lower court in this case held that the city was not required to comply with the state prevailing wage law, because the labor unions did not present sufficient evidence of a “statewide concern” that would supersede charter city autonomy under the “Home Rule” doctrine. The California Supreme Court granted review and on July 2 affirmed the original decision.
The court explained that the “Home Rule” doctrine was originally enacted upon the principle that the municipality itself knows better what it wants and needs than the state at large and to give that local government the exclusive privilege and right to enact direct legislation which would carry out and satisfy its wants and needs. As far as municipal affairs are concerned, the court confirmed that charter cities are “supreme and beyond the reach of legislative enactment.”

The court determined that Vista’s ordinance regulates an activity which can be characterized as a municipal concern - locally funded construction. The court concluded that no statewide concern had been presented justifying the state’s regulation of the wages that charter cities require their contractors to pay to workers hired to construct locally funded public works.
Prevailing wage requirements will continue for projects that are funded in part with state or federal funds.