California has a Right to Withhold Funds from Charter Cities that Refuse to Apply Prevailing Wages on Public Work Projects; Court Upholds SB 7


In recent years, a number of cities have become “charter cities,” in some cases because they believed it would “free” them from state laws requiring they pay prevailing wages on all public projects. Prevailing wages typically are what the prevalent pay is in a region.

In response, Senate Bill 7 (SB 7) passed into law, which allows the state to withhold discretionary funding from charter cities that refuse to require prevailing wage to be paid to workers on public projects.

Six charter cities (City of El Centro, City of Carlsbad, City of El Cajon, City of Fresno, City of Oceanside, and City of Vista) filed a lawsuit challenging SB 7 arguing the law is unconstitutional. In City of El Centro v. David Lanier, decided in August 2014, a judge ruled against the cities and upheld the legality of SB 7. The Court also upheld SB 922 (2011) and SB 829 (2012), which allow the state to restrict discretionary state funding to charter cities that refuse to consider adoption of Project Labor Agreements (PLAs).

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