While most prevailing wage reforms would require legislation, the two changes today can be accomplished through the regulatory process. State law generally defines a public works project as construction, alteration, demolition, repair or maintenance work performed under contract with a state or local agency and paid for in whole or in part by public funds. Common types of public works projects are school, highway, hospital, and jail construction. Under the state constitution, charter cities can exempt themselves from prevailing wage requirements when projects are funded entirely by municipal funds. In his January budget message, the Governor requested that DIR review existing prevailing wage requirements for any needed regulatory or legislative changes.
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Prevailing wage reform reducing costs to taxpayers is needed in California because the state's capital and infrastructure needs are so large while state and local governments continue to face limited resources. These demands could increase at any time as a result of an earthquake or any other natural disaster. The new regulations change the method for determining the prevailing wage to a 50 percent or weighted average from the present modal method. The proposed method is the same approach used by the federal government under the federal Davis-Bacon Act. Under this method, the prevailing wage rate will be the single rate paid to a majority of workers or a weighted average of the rates paid if there is no majority.