A recent state Supreme Court ruling found that work undertaken by contract workers on non-construction public works projects can be subject to a prevailing wage statute dating from the 1930s, raising questions about what the impact will be for the thousands of other special districts in California – from parks to libraries.
The plaintiffs, who were hired by a staffing agency to perform recycling work at a Los Angeles sanitation facility, filed Kaanaana v. Barrett Business Services, Inc. -- arguing they were owed prevailing wages among other claims. The state court dismissed the case, which was reversed on appeal, and affirmed by the state Supreme Court.
A concurrence opinion by Supreme Court Justice Leondra Kruger also noted that the law could benefit from attention by the Legislature.
“I write separately, however, to call attention to the seeming incongruity in the statute we are interpreting,” Kruger wrote. “Why, precisely, did the Legislature choose to treat work for utility and other covered districts so differently from work for other public agencies? Whatever reasons the Legislature may once have had, they have been lost in the mists of time. Now, more than 80 years after the statute was first enacted, the Legislature may wish to revisit the issue.”
Tom Manzo, founder and president of the California Business and Industrial Alliance, told the Northern California Record it was unusual to see the prevailing wage law apply outside of the construction industry, as that’s what it was originally drafted to cover.
“You’re penalizing a company that works in recycling, and recycling is something that we need, so why are we penalizing an employer with a law from the 1930s?” Manzo said. “How is a business that got hit with this kind of lawsuit going to recover? We all need recycling, and this is making it harder for small- to medium-sized businesses to survive in this particular environment.”
Manzo noted the ruling has significant implications.
“This particular case sends the signal that labor, business, and the governor’s office have to sit down and say it’s time to update our labor laws, especially the ones that are this old,” Manzo said. “It’s proof how outdated some of California’s labor laws are.”