Prevailing Wage Court Victory for SBCTC
Developers Who Get Low-Income Housing Tax Credits Must Pay Prevailing Wage
August 10, 2006 - In a big win for construction workers, the San Francisco Superior Court agreed with the SBCTC that developers who receive state low-income housing tax credits to subsidize a construction project must pay prevailing wages to the workers on the project.
The Department of Industrial Relations (DIR) under the Schwarzenegger Administration had sided with developers by concluding that state tax credits are not a payment of public funds that makes a project subject to the prevailing wage law. If the court had upheld the DIR ruling, it would have allowed developers to receive millions of dollars in state tax credits for projects on which construction workers are not paid prevailing wages.
The SBCTC filed suit in the San Francisco Superior Court to challenge the Department's interpretation of the prevailing wage law. Attorneys Rebekah Evenson and Scott Kronland of Altshuler, Berzon, Nussbaum, Rubin and Demain argued the case for the SBCTC and on August 4, 2006, the Superior Court ruled in favor of the SBCTC and ordered the Department to reverse its decision.
The Schwarzenegger Administration must now decide whether to take the case to the Court of Appeal.