Existing law requires workers employed on public works to be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality that the public work is performed, as prescribed, unless an exception applies. Existing law requires the Director of the Department of Industrial Relations to determine the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed.

Under existing law, per diem wages include certain employer payments made pursuant to a collective bargaining agreement or for a program or committee established under the federal Labor Management Cooperation Act of 1978, as specified. Existing law provides that these payments are a credit against the obligation to pay the general prevailing rate of per diem wages.

Existing law requires the credit for employer payments to be computed on an annualized basis where the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, except under certain circumstances, including a determination by the director that annualization would not serve the purposes of the provisions relating to public works projects.

This bill would remove that exception and revoke annualization exemptions authorized by the director prior to January 1, 2026. The bill would authorize an employer to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and essentially immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The bill would require the employer to prove that the credit for employer payments was calculated properly. The bill would authorize the Labor Commissioner to deny the employer credit for employment payments if the employer does not produce payment records.

The bill would make related findings and declarations.