California Court of Appeal Holds One Time Contract For Removal And Trimming Of Trees For State Agency Requires Payment Of Prevailing Wages

California's Prevailing Wage Law (Labor Code sections 1720-1861) generally requires that persons employed on Public Works be paid "not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is performed" as determined by the Director of the Department of Industrial Relations."Public works" is broadly defined to include "[c]onstruction, alternation, demolition, installation, or repair work done under contract and paid for in whole or in part of of public funds."  The term "prevailing wages" is not synonymous with average or market wage rates for a particular kind of work in a given local.  "Prevailing wages" are typically union scale wages regardless of whether such wages are typically paid in a given market on non public works projects. For example, the general prevailing wage for a tree trimmer who works above ground is currently $27.49 per hour.  Prevailing wage determinations for various trades can be viewed here

According to a decision of the California Supreme Court, California's Prevailing Wage Law is intended "to protect employees from substandard wages that might be paid if contractors could recruit labor from distant cheap-labor areas; to permit union contractors to compete with nonunion contractors; to benefit the public through the superior efficiency of well-paid employees; and to compensate nonpublic employees with higher wages for the absence of job security and employment benefits enjoyed by public employees." See Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 987.  State agencies are not required to pay "prevailing wages" to state employees. 

Significant consequences can be imposed against a contractor that fails to pay prevailing wages when payment of prevailing wages is required.  Such consequences include in addition to payment of the required prevailing wages that were not paid, civil penalties, suspension from bidding on or working on public works projects for up to three years, and criminal prosecution for failing to maintain required payroll records. 

In Reliable Tree Experts v. Christin Baker, Reliable Tree Experts sought a writ of administrative mandamus challenging the determination of the Director of the Department of Industrial Relations that Reliable Tree Expert's contract with the California Department of Transportation (Caltrans) calling for Reliable Tree Experts to prune certain trees and to remove certain diseased trees along state highways in a designated area required the payment of prevailing wages.    

The trial court and the Court of Appeal both disagreed with Reliable Tree Experts' contention the work called for by its contract with Caltrans did not qualify as a "public work" because landscape maintenance work, such as pruning trees and removing trees, is not "[c]onstruction, alternation, demolition, installation, or repair work."  The Court of Appeal held that maintenance work is a type of work that is subject to prevailing wages because, among things, the Prevailing Wage Law codified in part at Labor Code section 1771 states it is "applicable to contracts let for maintenance work," and because the term "maintenance" as defined by applicable regulation set out at Public Contract Code section 21002 expressly includes landscape maintenance. The Court of Appeal rejected also Reliable Tree Experts' contention that the work called for by its contract was not "maintenance" on the theory that its one time contract with Caltrans did not qualify as maintenance because the project was not a "routine, recurring and usual activity" for Reliable Tree Experts as to its project with Caltrans.  The court agreed with the position of Caltrans and the Director of the Department of Industrial Relations that '[w]hen determining whether work is 'routine, recurring and usual,' the . . . focus must be on the work in terms of the property being worked, not the terms of an individual contract."

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