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Prevailing wage law may not apply to off-site work

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in Compensation and Benefits,Human Resources

A new decision may make it easier for employers to avoid some prevailing wage payments.

Recent case: A subcontractor on a public-works project used a sheet metal facility to custom-make some materials. It did not pay prevailing wages, and was sued.

A union argued that the prevailing wage law required the subcontractor to pay a higher prevailing wage, pointing out that the facility in question did not sell products to the public—which was a requirement for an exception to the prevailing wage law.

The court concluded that the prevailing wage law does not apply if fabrication takes place at a permanent, off-site manufacturing facility and the location and existence of that facility is determined wholly without regard to the particular public works project. (Sheet Metal Workers v. Duncan, et al., No. A131489, Court of Appeal of California, 1st Appellate District, 2014)

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