Bill > AB889

This bill amends California's labor code to clarify and update the rules for calculating prevailing wage payments, focusing on the principle of "annualization" for employer contributions to worker benefits. The bill requires that when employers calculate their fringe benefit contributions for public works projects, they must divide the total amount of contributions by the total number of hours worked across all projects (public and private) in a year, preventing contractors from using prevailing wage work as the primary source of funding for benefits. The legislation removes previous exceptions to annualization and revokes any existing exemptions authorized before January 1, 2026. It specifically allows employers to take full credit for hourly contributions to defined contribution pension plans with immediate participation and vesting, even if contribution rates differ between public and private projects. The bill also places the burden on employers to prove that their benefit calculations are correct and authorizes the Labor Commissioner to deny credits if proper payment records are not produced. This legislation aims to ensure fair and transparent calculation of prevailing wages and associated benefits for workers on public works projects in California.

Budget and Finance, Labor and Employment

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260AB889