CaliforniaState wage changes would apply to large public works contracts
Starting July 1, 2027, changed state wage rates would apply to certain large public works contracts, and affected parties could ask the labor director to review a rate.
What it does
For large public works contracts, a change in the state’s prevailing wage rate would apply if the contract is awarded or advertised after July 1, 2027.
Affected contractors, public agencies, and worker representatives could ask the labor director to review a rate they believe was set incorrectly.
Projects where every non-manager unit is reserved as affordable housing are excluded from the large-contract rule. Rate changes still apply to their contracts that have not yet been advertised or awarded.
Argument forContractors, public agencies, and worker representatives could ask the state to review a rate they believe was set incorrectly and receive a written decision.
Argument againstContractors on affected projects could face higher wage costs when rates change, and a review may not resolve disputes before the new rate takes effect.
More detail
The labor director’s rate changes would apply to qualifying large public works contracts. This covers contracts under the public works chapter in any locality where the labor director determines that the prevailing daily wage rate has changed. The contract’s awarded value must be at least $35 million. This rule starts July 1, 2027, and applies to contracts awarded or advertised after that date.
Certain parties could petition the labor director to review a changed rate for a contract. A contractor, awarding body, or representative of an affected craft, job classification, or type of work may petition about a rate change on a particular contract. The petition must explain why the rate was not determined under Labor Code Section 1773. The director must notify interested parties and investigate or hold a hearing; the director may take longer than 20 days if all interested parties agree. A petition is due within 20 days after the new rate is published. The director’s written decision is due within 20 days after filing, unless all interested parties agree to more time; it takes effect 10 days after it is issued.
Fully affordable housing projects would be excluded from the large-contract rate rule, while rate changes would still apply prospectively to their contracts. This applies to housing development projects restricted for low- or moderate-income households under the stated documents or agreements. All units other than managers’ units must meet the stated affordable-housing restrictions or subsidy terms. These provisions take effect July 1, 2027. For these housing projects, a rate change does not apply to a contract already advertised or awarded.
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Where it stands
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Sep 27Chaptered by Secretary of State - Chapter 513, Statutes of 2026.Latest
- Sep 27Approved by the Governor Gavin Newsom.Became Law
- Sep 9Enrolled and presented to the Governor at 1 p.m.To Governor
- Aug 31
- Vote recorded AB 1198 Haney Concurrence in Senate Amendments. Result: pass.Lower
- Aug 30Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 68. Noes 7. Page 6907.).Major
- Vote recorded 3rd Reading AB1198 Haney By Arreguín. Result: pass.Upper
- Aug 30In Assembly. Concurrence in Senate amendments pending.
- Aug 30Read third time. Passed. Ordered to the Assembly. (Ayes 31. Noes 9.).Passed Senate
- Aug 24Read second time. Ordered to third reading.Minor
- Aug 21Read third time and amended. Ordered to second reading.Major
- Aug 13Read second time. Ordered to third reading.Minor
- Vote recorded Do pass. Result: pass.Upper
- Aug 13From committee: Do pass. (Ayes 6. Noes 1.) (August 13).Minor
- Jun 22In committee: Referred to APPR. suspense file.Minor
- Vote recorded Placed on suspense file. Result: pass.Upper
- Jun 10From committee: Do pass and re-refer to Com. on APPR. (Ayes 5. Noes 0.) (June 10). Re-referred to Com. on APPR.Minor
- Vote recorded Do pass, but first be re-referred to the Committee on [Appropriations]. Result: pass.Upper
- May 6Referred to Com. on L., P.E. & R.Minor
- Jan 29In Senate. Read first time. To Com. on RLS. for assignment.Minor
- Vote recorded AB 1198 Haney Assembly Third Reading. Result: pass.Lower
- Jan 29Read third time. Passed. Ordered to the Senate. (Ayes 65. Noes 6. Page 3876.)Passed Assembly
- Jan 26Read second time. Ordered to third reading.Minor
- Jan 22Read second time and amended. Ordered returned to second reading.Major
- Vote recorded Do pass as amended. Result: pass.Lower
- Jan 22From committee: Amend, and do pass as amended. (Ayes 12. Noes 1.) (January 22).Major
- Jan 22Assembly Rule 63 suspended. (Page 3806.)
- 2025
- May 23In committee: Hearing postponed by committee.
- Apr 23In committee: Set, first hearing. Referred to suspense file.Minor
- Apr 3From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (April 2). Re-referred to Com. on APPR.Minor
- Apr 2
- Vote recorded Do pass and be re-referred to the Committee on [Appropriations]. Result: pass.Lower
- Mar 10Referred to Com. on L. & E.Minor
- Feb 24Read first time.Minor
- Feb 22From printer. May be heard in committee March 24.
- Feb 21Introduced. To print.Introduced
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