Project Labor Agreements - Administrative Provisions - Public Contract - CA

Section § 2500

This law states that in California, a public entity can use or require contractors to use a project labor agreement for a construction project, but only if certain conditions are met to protect taxpayers. These include no discrimination based on personal characteristics, allowing all qualified contractors to bid regardless of collective bargaining status, a set drug testing protocol, assurances against work stoppages, and a process for resolving disputes through neutral arbitration.

(a) A public entity may use, enter into, or require contractors to enter into, a project labor agreement for a construction project only if the agreement includes all of the following taxpayer protection provisions:

(1) The agreement prohibits discrimination based on race, national origin, religion, sex, sexual orientation, political affiliation, or membership in a labor organization in hiring and dispatching workers for the project.

(2) The agreement permits all qualified contractors and subcontractors to bid for and be awarded work on the project without regard to whether they are otherwise parties to collective bargaining agreements.

(3) The agreement contains an agreed-upon protocol concerning drug testing for workers who will be employed on the project.

(4) The agreement contains guarantees against work stoppages, strikes, lockouts, and similar disruptions of the project.

(5) The agreement provides that disputes arising from the agreement shall be resolved by a neutral arbitrator.

(b) For purposes of this chapter, both of the following definitions apply:

(1) “Project labor agreement” means a prehire collective bargaining agreement that establishes terms and conditions of employment for a specific construction project or projects and is an agreement described in Section 158(f) of Title 29 of the United States Code.

(2) “Public entity” means a public entity as defined in Section 1100.

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Section § 2500.5

This law permits California state agencies to involve project labor agreements for construction projects costing more than $35 million, but only if those agreements include community benefits. These benefits might include creating job opportunities for veterans or people from economically challenged areas, local hiring goals, and partnerships with programs offering skilled construction worker training.

These regulations begin with agreements made on or after January 1, 2026.

(a) A state agency may use, enter into, or require contractors to enter into, a project labor agreement pursuant to this chapter that applies to a project or set of projects with aggregate construction costs in excess of thirty-five million dollars ($35,000,000) only if the agreement also includes provisions to address community benefits. Community benefits may include partnerships with high road construction careers programs, as defined in Section 14005 of the Unemployment Insurance Code, local hire goals, coordination with programs that assist veterans in transitioning to civilian employment, job fairs for construction apprenticeship or preapprenticeship programs, or other methods agreed upon by the parties to promote employment and training opportunities for veterans and individuals who reside in economically disadvantaged areas.

(b) This section shall apply to project labor agreements entered into on or after January 1, 2026.

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Section § 2501

This law allows the governing board of a local public entity to decide, by majority vote, if they want to use or require contractors to use a project labor agreement for a specific project. This agreement should include taxpayer protection features. Additionally, they can choose whether to allocate funds for projects that have these agreements. The law also states that no local rule, like a city charter or other regulations, can stop the board from making these decisions on a project-by-project basis, except for charter cities.

The members of the governing board of a local public entity may choose by majority vote whether to use, enter into, or require contractors to enter into a project labor agreement that includes all the taxpayer protection provisions of Section 2500 for a specific project or projects awarded by that entity and whether to allocate funding to a specific project covered by such an agreement. A charter provision, initiative, or ordinance shall not prevent the governing board of a local public entity, other than a charter city, from exercising this authority on a project-specific basis.

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Section § 2502

This law states that if a charter city has a rule that stops its governing board from considering a 'project labor agreement' with taxpayer protections for a city project, or if it blocks the board from deciding on funding for projects with such agreements, then the state will not provide funding for that project. This rule started on January 1, 2015, but does not apply to cities with existing rules from before November 1, 2011, that would prevent a project from getting state funds.

If a charter provision, initiative, or ordinance of a charter city prohibits the governing board’s consideration of a project labor agreement that includes all the taxpayer protection provisions of Section 2500 for a project to be awarded by the city, or prohibits the governing board from considering whether to allocate funds to a city-funded project covered by such an agreement, then state funding or financial assistance shall not be used to support that project. This section shall not be applicable until January 1, 2015, for charter cities in which a charter provision, initiative, or ordinance in effect prior to November 1, 2011, would disqualify a project from receiving state funding or financial assistance.

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Section § 2503

This law says that if a charter city has rules stopping its governing board from using project labor agreements with taxpayer protection terms for city construction projects, then those projects can't get state funding. However, this rule only started affecting certain charter cities from January 1, 2015, if their existing rules as of November 1, 2011, would make them lose state funding.

If a charter provision, initiative, or ordinance of a charter city prohibits, limits, or constrains in any way the governing board’s authority or discretion to adopt, require, or utilize a project labor agreement that includes all the taxpayer protection provisions of Section 2500 for some or all of the construction projects to be awarded by the city, then state funding or financial assistance shall not be used to support any construction projects awarded by the city. This section shall not be applicable until January 1, 2015, for charter cities in which a charter provision, initiative, or ordinance in effect prior to November 1, 2011, would disqualify a construction project from receiving state funding or financial assistance.

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