What is a CA DIR Public Works Project?

Understanding California DIR Prevailing Wage Laws

In California, “public works” refers to construction and related work that’s paid for, in whole or in part, with public funds. Under Labor Code sections 1720–1720.6, this includes four main types of projects: construction under a public contract, private construction on property leased to the state, hauling refuse from public works sites, and renewable energy projects on state property performed under private contracts.

“Public funds,” as defined in Labor Code section 1720(b), covers more than just direct government payments. It includes things like work performed by public employees, the transfer of assets, waived or reduced fees, forgiven loans, or credits provided by government entities. These funds can come from state, local, or federal sources. When a federally funded or assisted project is managed by a California awarding body, state prevailing wage rates still apply—unless the project is entirely under federal control.

Navigating DIR Prevailing Wage Laws

The California Department of Industrial Relations (DIR) is responsible for deciding which projects fall under prevailing wage laws. According to Title 8, section 16001(a)(1) of the California Code of Regulations, the DIR Director has the authority to determine coverage for specific projects or types of work. These determinations can be reviewed by courts under California’s Code of Civil Procedure section 1085.

DIR publishes administrative appeal decisions online, which serve as resources for investigators and employers. However, these decisions are advisory only—they’ve been considered non-precedential since 2007. Certain types of work are specifically excluded from prevailing wage requirements, such as volunteer work done for civic or charitable purposes, work by a public agency’s own employees, regular janitorial or security services, and landscape maintenance performed at sheltered workshops employing workers with disabilities.

Chartered Cities and University Projects

Under Article XI, Section 5 of the California Constitution, chartered cities can exempt their own public works projects from prevailing wage laws if those projects qualify as “municipal affairs.” Whether a project is a municipal affair or a matter of statewide concern depends on three main factors: who controls the project, where the funding comes from, and the project’s nature and purpose. If it’s determined to address a statewide concern, the exemption doesn’t apply—even if the city classifies it as local.

The Labor Commissioner reviews past coverage decisions to evaluate whether a project qualifies for exemption. For instance, in Public Works Case No. 2006-016, involving a new public library in the City of Lindsay, this determination was central to the case.

A similar exemption applies to the University of California, under Article IX, Section 9 of the Constitution. The UC Regents can claim exemption for projects considered “university affairs,” provided they aren’t of statewide concern. This was upheld in Regents v. Aubry (1996) for projects on university-owned land but denied in DLSE v. Ericsson Information Systems, Inc. (1990).

Ultimately, the Labor Commissioner evaluates each exemption based on case law and project details. If bid documents or contracts require prevailing wages, those requirements remain enforceable, regardless of exemption claims.