First Construction Wage Theft Ordinance

Berkeley, Calif.'s, construction wage theft ordinance could protect laborers and level the playing field for by-the-book businesses.

BERKELEY, CALIF -- The city of Berkeley approved a construction wage theft ordinance aimed at preventing wage theft within the city.

According to, a project of the California research and advocacy organization Smart Cities Prevail, this local construction wage theft ordinance is the first of its kind.

Wage theft is a $170 billion marketplace in the U.S., according to the advocacy group, and low-wage employees are being taken advantage of:

In this marketplace, employers underpay their workers, deny them legally required breaks, under-report their number of employees and hours of work, misclassify employees as independent contractors and fail to make required tax and insurance contributions."

Wage theft is discussed with state leadership and in Washington, D.C. Some labor advocates like Interfaith Worker Justice are lobbying at the federal level as well as in cities across the U.S. Other non-profit labor support groups focus on education, outreach, legal actions and enforcement.

In California, wage theft is as high as $10 billion, according to city council documents. Smart Cities Prevail also noted that wage theft costs $8.5 billion in lost state tax revenues.

The California State Labor Commissioner has levied numerous penalty assessments on the construction industry. It has the second highest level of labor standards violations. In 2012-2013, 985 inspections resulted in 595 citations with $5.3 million in penalties.

With more than 300,000 state-licensed contractors performing private construction work in 2014, there is not enough enforcement resources at the state level to manage and address wage theft practices, proponents of local wage theft ordinances argue.

They believe that by involving local government policing powers to ensure Wage Theft Protection Act of 2011, local ordinances may help reduce instances and make it unprofitable to commit wage theft.

Berkeley will now require contractor and subcontractor owners to confirm laborer and employee pay rates and other legally required benefit information in adherence with the labor code. All contractors and subcontractors with projects exceeding $100,000, or having one percent of the total value of project construction costs, must provide the city with documentation and updates every 30 days.

This measure links our city’s responsibility for determining whether a construction project is completed with the principle of ensuring those who did the work are paid the wages they earned,” said Laurie Capitelli, Berkeley city council member and the author of the ordinance.

A spokesperson for told Gov1 that the organization is working with other municipalities in the Bay Area on similar ordinances.

More information about the Berkeley construction wage theft ordinance is available on the StopWageTheftCA website.

Read the original announcement.

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