(a) Prevailing Wage Requirement. Every Covered Contract issued by the City must require that any Individual performing services thereunder be paid not less than the Prevailing Rate of Wages and must include a provision in which the Contractor agrees to comply with, and to require Subcontractors to comply with, Prevailing Wage requirements imposed by the applicable provisions of Article 103.
(b) Definitions. For purposes of this Article 102, the following definitions shall apply to the terms used herein.
“Individual” shall mean any person who performs work under a Covered Contract.
“Person” shall mean any individual, proprietorship, partnership, joint venture, corporation, limited liability company, trust, association, or other entity that may employ or hire individuals or enter into contracts.
(c) Contracting Officers. Each bid or proposal for a Covered Contract shall include, on a form provided by the Contracting Officer, the following: (a) the basic hourly rate of wages to be paid by the Contractor and Subcontractor, if any, for each craft, classification, or type of work to be performed by employees under the Covered Contract; and (b) for each required fringe benefit, the hourly cost of each fringe benefit, or cash equivalent, the Contractor and Subcontractor, if any, intend to provide. In meeting the Prevailing Rate of Wages, no amount of fringe benefit credit shall be used to reduce the obligation to pay the basic hourly straight time or overtime wage rate. The Contracting Officer shall reject any bid or proposal that does not include payment of the Prevailing Rate of Wages as defined in this Section 102.1.
(d) Requirement of Employer-Employee Relationship.
(1) The City has an important proprietary interest in maintaining the stability of the workforce engaged by a Contractor for a Covered Contract by ensuring that individuals working pursuant to City contracts have the protections afforded by State and municipal laws governing employment. In order for the City to maintain the integrity of its contracting process, the City’s Prevailing Wage laws ensure contractors a level playing field on which to bid for contracts. When contractors are allowed to classify workers as independent owner operators, contractors can appear to pay the Prevailing Wage when in reality, after the owner operator’s operating costs are taken into account, the owner operator receives less than the Prevailing Wage for the owner operator’s labor. This outcome contradicts one of the goals of the Prevailing Wage law, which is to provide for fair competition among contractors, all of whom must pay workers, at a minimum, the same Prevailing Rate of Wages and benefits. The City’s proprietary interest is such that employment of Employees in an Employer-Employee relationship shall be required for all work done under any Covered Contract.
(2) Every Covered Contract shall require the Contractor (and Subcontractors, if any) to perform said Covered Contract, with Individuals employed by said Contractor or Subcontractor in an Employer-Employee relationship as defined by California law.
(3) No Covered Contract shall be awarded by the City to a Contractor and/or Subcontractor who proposes to perform the Covered Contract with self-employed persons or independent contractors.
(4) If during the term of a Covered Contract, a Contractor (or Subcontractor engaged by said Contractor) engages any self-employed persons or independent contractors to perform the Contract for a period of three days or more, the Contractor or Subcontractor shall be subject to the enforcement remedies as set forth in Article 106, including termination of the Covered Contract or subcontract under Section 106.4, and penalties.
(5) Contractors shall be fully responsible for the compliance of Subcontractors with this subsection (d). Contractors shall be jointly and severally liable for any penalties assessed against their Subcontractor in the event that the Subcontractor is unable or unwilling to pay a penalty.
(e) Preemption. Nothing in this Section 102.1
shall be interpreted or applied so as to create any power or duty in conflict with any federal or State law.
(f) No Cause of Action Against City. This Section 102.1
is not intended to create a private right of action against the City.
(g) Prospective Application. This Section 102.1
is intended to have prospective effect only, and shall not be interpreted to impair the obligations of any pre-existing Contract entered into by the City. This Section shall only apply to Contracts entered into on or after the effective date of this Section.
(h) Severability. If any part or provision of this Section 102.1
, or the application thereof to any Person or circumstance, is held invalid, the remainder of this Section, including the application of such part or provisions to other Persons or circumstances, shall not be affected thereby and shall continue in full force and effect. To this end, the provisions of this Section are severable.
(Added as Administrative Code Sec. 21C.7 by Ord. 12-12, File No. 111190, App. 2/2/2012, Eff. 3/3/2012; amended by Ord. 90-14, File No. 140383, App. 6/19/2014, Eff. 7/19/2014; Ord. 10-16, File No. 150874, App. 2/10/2016, Eff. 3/11/2016; Ord. 187-16, File No. 160199, App. 10/14/2016, Eff. 11/13/2016; Ord. 211-16, File. No. 160891, App. 10/28/2016, Eff. 11/27/2016; redesignated by Ord. 221-23, File No. 230835, App. 11/3/2023, Eff. 12/4/2023, Oper. 1/4/2024; amended by Ord. 296-24, File No. 240985, App. 12/19/2024, Eff. 1/19/2025, Oper. 2/19/2025)