Existing law requires the body awarding a public works contract to obtain from the Director of Industrial Relations the general prevailing rate of per diem wages for work of a similar character in the locality in which the work is to be performed. If the Director determines during any quarterly period that there has been a change in the prevailing rate, they must make that change available to the awarding body, and the Director’s determination is final, provided that it does not apply to contracts where a notice to bidders has already been published.
AB 1198 replaces this rule beginning July 1, 2027, except as applied to certain affordable housing projects. AB 1198 provides that the Director’s determination that the prevailing rate has changed in a locality during any semiannual period applies to public works contracts with an awarded prime contract value of $35 million or more or for which notice to bidders is published after July 1, 2027.
AB 1198 also creates a process allowing any contractor, awarding body, or representative of any craft, classification, or type of work affected by a change in rates on a particular contract to file a verified petition with the Director to review the determination of the rate within 20 days after publication of the new determination, on the ground that the rate was not determined in accordance with Labor Code section 1773. A copy of the petition must be filed with the awarding body within two days after filing. The Director would then be required to investigate or hold a hearing and make a final determination within 20 days after the petition is filed, unless the Director, awarding body, and all interested parties agree to a longer period, and that determination would become effective 10 days after issuance.
AB 1198 amends section 1773.6 of the Labor Code and adds section 1773.65 to the Labor Code.
