Subcontractor’s Employees On A Public Works Project Cannot Sue The Prime Or General Contractor For Nonpayment Of Prevailing Wages By The Subcontractor

In Violante v. Communities Southwest Development and Construction Company, et al (2006 WL 650376, Cal.App. 4 Dist., Mar. 16, 2006), a California Court of Appeal considered a lawsuit filed by construction workers on a public works project, against the project’s general contractors, alleging they had not received prevailing wage from their direct employer, a subcontractor.

The Court ruled that under current law, there is no basis for such a lawsuit. While contractors and subcontractors on public works projects are each required to pay their own employees prevailing wage, the law does not require contractors to guarantee prevailing wage to subcontractors’ employees.

Facts

Margarito Violante was one of a group of construction workers (“Plaintiffs”) working on a housing development, which resulted from public works agreements between various contractors (“Contractors”) and the City of Yucaipa.

When Plaintiffs’ direct employer, subcontractor Pacific Structures, failed to pay them the prevailing wage as required by law, they sued Contractors. The trial court sustained Contractors’ demurrers, and Plaintiffs appealed.

Decision

The Court reviewed the language of Labor Code Section 1774, which states: “The contractor to whom the contract is awarded, and any subcontractor under him, shall pay not less than the specified prevailing rates of wages to all workmen employed in the execution of the contract.”

Based on this statutory language, the Court held that, Plaintiffs’ claim that Contractors violated Section 1774 because their employer, a subcontractor, failed to pay them the prevailing wage was untenable.

The Court said Plaintiffs did have a right of action against their direct employer. “But the Labor Code nowhere requires the contractor to pay prevailing wages to a subcontractor’s employee or permits a subcontractor’s employee to sue the prime contractor when the subcontractor fails to pay prevailing wage.”

The trial court’s ruling was affirmed.

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