CSLB Law & Business ExamPublic WorksHard
A nonprofit organization hires a licensed contractor to perform $850 worth of minor repair work on a public library restroom, funded entirely by public funds. Based on the general prevailing wage threshold under Labor Code §1771, is this project subject to prevailing wage requirements?
- AYes, because any use of public funds triggers prevailing wage regardless of amount
- BNo, because public works contracts of $1,000 or less are generally exempt from prevailing wage requirements
- CYes, because repair work is always exempt-free regardless of contract value
- DNo, because nonprofit-funded projects are never subject to prevailing wage law
Show answer & explanationAnswer & explanation
Correct answer: B. No, because public works contracts of $1,000 or less are generally exempt from prevailing wage requirements
Labor Code §1771 generally exempts public works contracts valued at $1,000 or less from prevailing wage requirements. Since the contract here is $850, it falls under this de minimis exemption, even though public funds are involved and a licensed contractor is performing the work.
Why the other options are wrong
- A. There is a statutory dollar threshold exemption, so not all public-fund projects automatically trigger prevailing wage.
- C. This statement misstates the law; repair work above $1,000 is not automatically exempt.
- D. The funding source being a nonprofit does not create a blanket exemption; the public funding still matters.
$1,000 Prevailing Wage Exemption
Under Labor Code §1771, public works contracts of $1,000 or less are generally exempt from state prevailing wage requirements.
- Applies regardless of funding source as long as contract value is $1,000 or under
- Does not apply once contract value exceeds $1,000
- Separate from CUPCCAA informal bidding thresholds, which are different limits
Memory trick: Under a grand, no wage demand.