California’s construction sector is bracing for increased labor demand following major amendments to the California Environmental Quality Act (CEQA). Two recently enacted laws—Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131)—roll back or streamline portions of CEQA to accelerate housing and infrastructure development. But while these reforms shorten environmental reviews, they also introduce strict labor compliance rules that employers and contractors cannot overlook.
.jpeg)
The changes are expected to drive a surge in housing, infrastructure, healthcare, and public-service construction projects. With the state aiming to ease permitting bottlenecks and fast-track building efforts, contractors may find themselves competing for skilled labor while managing new wage and workforce mandates.
State lawmakers positioned AB 130 and SB 131 as tools to speed up development by limiting CEQA reviews for qualifying projects. But the exemptions come with clear labor obligations. Employers pursuing CEQA-exempt or CEQA-streamlined projects must comply with prevailing wage rules and requirements to hire a skilled and trained workforce, or else face enforcement actions and operational challenges.
One strategy emerging from the legal and construction communities is to rely on project labor agreements (PLAs), which can streamline compliance and reduce risk.
A key provision in AB 130 adds a section to the Public Resources Code creating a CEQA exemption for certain housing projects. Projects up to 20 acres—or five acres for “builder’s remedy” sites—can bypass environmental review if they meet strict conditions. The most notable requirement states that if “100 percent of the units within the development project are dedicated to lower income households,” then “all construction workers … shall be paid at least the general prevailing rate of per diem wages for the type of work and geographic area ….”
Developers and contractors engaging in affordable housing projects must therefore ensure every contractor and subcontractor meets prevailing wage obligations, including accurate wage certifications and documentation.
The article points out that some enforcement mechanisms and recordkeeping duties may be waived “if all contractors and subcontractors performing work on a development are subject to a project labor agreement.” A qualifying PLA mandates prevailing wage payments and enforces the terms through arbitration. Employers are encouraged to evaluate whether this approach can simplify compliance.
In addition to wage rules, certain projects require firms to use a skilled and trained workforce (STW) for work in apprenticeable occupations. Contractors and subcontractors must document this labor composition in monthly reports, which become part of the public record.
As with the prevailing wage provisions, the use of a compliant PLA may help contractors sidestep some reporting challenges and avoid penalties. Legal counsel may be needed to structure agreements that align with both state law and project goals.
Employers are being advised to build labor compliance into their upfront planning—before bidding, zoning applications, or contract execution. This may include:
The message from legal and industry experts is direct: Future development requires future-ready labor strategies. With enforcement risks tied to public contracts and affordable housing projects, employers should familiarize themselves with prevailing wage rules and skilled workforce standards now.
The article underscores this shift, noting that labor compliance is no longer secondary to CEQA exemptions—it is embedded into the development pathway itself. Employers are encouraged to consult with legal advisors, such as Jackson Lewis attorneys, to prepare for implementation and mitigate risk.
Originally reported by Eric S. Clark, John A. Snyder, Michael R. Watts in Jackson Lewis.
.webp)
