The Road to Justice Under California Labor Law

Fresno, CA When a private construction project intersects with a public entity such as a highway or public thoroughfare, there are rules and statutes under the auspices of California labor law that govern workers and how much they are paid. In other words, if a public road is revised with private, rather than public funding, such a funding model cannot be used to circumvent rules of labor, as one general contractor and a number of subcontractors recently discovered.

To that end, Valley Vanguard Properties, Inc. (Valley Vanguard) and six subcontractors have been hit with wage and penalty assessments for violating California labor code over a road widening in concert with the installation of a Wal-Mart store in Kerman, California.

According to PR Newswire (3/26/13), Valley Vanguard was given the nod to build a new Wal-Mart facility on behalf of East Kerman Development, the developer of record on the project. In concert with the facility build - and in view of an expectation for increased traffic flow stemming from the facility - the City of Kerman made it a condition when approving the new Wal-Mart that Highway 180 would require an expansion to four lanes, in order to handle the traffic flow.

To that end, even though the highway is a public thoroughfare, the widening was undertaken through private funding, with Valley Vanguard handling the road widening in concert with the aforementioned subcontractors.

However, according to the release, Valley Vanguard and its subcontractors got into some hot water under California labor law.

“Developers and contractors in California should be aware that public works laws may be triggered when a project requires work on state roads or highways as a condition of the project’s construction approval,” said Christine Baker, director of the Department of Industrial Relations (DIR).

Those words were echoed by the Office of the California Labor Commissioner. “If a project with private funding requires a Caltrans encroachment permit,” stated Labor Commissioner Julie A. Su, “the private funding cannot be used to avoid public works laws and the requirement to pay workers prevailing wages.”

Following a complaint and subsequent investigation, Valley Vanguard and six subcontractors were ordered to pay wage and penalty assessments exceeding $300,000.

The penalties break down as follows: $263,670 in wages, $4,289 in training fund contributions and $45,745 in penalties as a result of the California labor employment law violations.

According to the release, the six subcontractors were identified as Barracuda Construction, Inc., Prestige Electric Corporation and Safety Network, Inc., all of Fresno; Clovis-based contractor Davis & Roberts Construction, Inc.; Kerman Telephone Co., based in Kerman; and R & L Gibbs Construction, based in Squaw Valley.

Streets and Highways Code Section 670.1 mandates the payment of prevailing wages for road and highway work requiring a Caltrans encroachment permit as a condition for residential and commercial construction. “Valley Vanguard, as the prime contractor for the highway expansion project,” said Commissioner Su, “is responsible for ensuring that all workers performing construction work on a public works project are paid the correct prevailing wage rates.”

Often, as the result of a complaint or violation report, the Labor Commissioner’s office will undertake a California labor lawsuit. Such an undertaking, while upholding California state labor laws, is important for two reasons...

To provide justice for workers who have been shortchanged out of their rightful provisions under California employee labor law, and to protect law-abiding corporations who respect and adhere to California prevailing wage law.