Prevailing Wage Seminar
Jon Welner, an attorney in the Real Estate Department, will be speaking at a Lorman seminar entitled "Prevailing Wage Law in California." Mr. Welner will be addressing the topic "Prevailing Wage Issues in Complex Development Projects." The program is scheduled in San Francisco on July 8, 2009.
Overview:California prevailing wage law can "make or break" a complex development project. What is it, exactly? The California Labor Code provides that workers on publicly subsidized construction projects must be paid "prevailing wages," which are typically 15% to 25% higher than non-union wages. These additional wages can add tens of millions of dollars to the cost of a major development project.
The prevailing wage requirement often takes developers by surprise. This is because a developer might accept public funds for a small part of the overall project -- e.g., for public infrastructure, affordable housing, or environmental cleanup -- and not realize that taking these funds could mean that the entire project must be paid at prevailing wage rates.
The two key issues for developers are: (1) what constitutes the acceptance of "public funds" for the purpose of triggering prevailing wage requirements?; and (2) how much of the overall project is "tainted" by the acceptance of public funds for a specific activity?
Often, by carefully structuring a development project at the beginning, the amount of work subject to prevailing wages can be dramatically reduced.
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