Wage Law

California Governor Arnold Schwarzenegger has vetoed AB 677, which would have provided that renewable energy projects serving school and college district be classified as public works projects.

Existing law defines "public works," for purposes of regulating public works contracts, as, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages be paid to workers employed on public works and imposes misdemeanor penalties for a violation of this requirement. Existing law provides that for the purposes of provisions of law relating to the payment of prevailing wages, "public works" includes specified types of construction, alteration, demolition, installation, and repair work.

AB 677 would have revised the definition of "public works" for these purposes to include the construction, alteration, demolition, installation, and repair work done under private contract when specified conditions are met, including the requirement that the work is performed in connection with the construction or maintenance of renewable energy generation capacity, located on property wholly or partially owned by a school district or community college district, or on public property, specifically to serve a school district or community college district.

The Governor's veto message reads:

To the Members of the California State Assembly:

I am returning Assembly Bill 677 without my signature.

Defining projects for renewable energy generating facilities serving school and community college districts as public works when the only public funds are those spent to purchase power produced is an unwarranted expansion of prevailing wage requirements into private works of improvement. Because the payment of prevailing wages results in higher costs, the bill may potentially reduce the number of renewable energy projects undertaken.

For these reasons, I am returning this bill without my signature.

The governor's pattern is quite clear: in matters involving wages, any bill which favors business over employees is getting signed; any which favors employees over business is getting the veto.