California’s push to accelerate building is reshaping both land use and labor compliance. In an effort to fast-track housing, infrastructure, and public-service development, state lawmakers have rolled back portions of the California Environmental Quality Act (CEQA) — but the legal streamlining comes with new obligations for employers.
Two new laws, Assembly Bill 130 (AB 130) and Senate Bill 131 (SB 131), carve out exemptions from CEQA’s traditionally lengthy environmental review process. While lawmakers positioned the changes as tools to combat the housing crisis and modernize infrastructure, the reforms carry significant labor compliance requirements for construction contractors and developers.
Industry leaders say the accelerated development timeline could increase demand for skilled construction workers across sectors such as affordable housing, healthcare, and public infrastructure. But with that growth comes a parallel emphasis on wage enforcement and workforce qualifications.
Under AB 130, a new exemption in the Public Resources Code applies to housing development projects up to 20 acres — or five acres in the case of builder’s remedy sites — if strict affordability conditions are met. The law 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 ….”
This means that developers and subcontractors participating in CEQA-exempt affordable housing projects must certify and document prevailing wage payments in compliance with state labor standards. Failure to do so could invite penalties, audits, or disqualification from future projects.
However, some reporting obligations and enforcement mechanisms may not apply if the entire project falls under a valid project labor agreement (PLA). A qualifying PLA must:
Employers are increasingly exploring PLAs as a strategy to streamline compliance and reduce the administrative burden tied to wage certification. Firms are encouraged to consult with counsel when evaluating whether a PLA could help satisfy their legal obligations.
In addition to wage requirements, certain CEQA-exempt or CEQA-streamlined projects will require contractors and subcontractors to use a skilled and trained workforce (STW) for all work within apprenticeable occupations. These commitments must be verified through monthly reports, which become part of the public record.
As with prevailing wage rules, many of the risks and reporting burdens associated with STW mandates can be mitigated by adopting a project labor agreement that incorporates the necessary workforce standards.
The message to employers is clear: environmental streamlining now goes hand-in-hand with labor accountability. The CEQA reforms present opportunities for faster project delivery, but only for builders equipped to navigate the compliance requirements.
Industry attorneys recommend that developers and contractors begin embedding labor compliance strategies early in the lifecycle of a project — including in:
As the construction climate shifts, employers may need to update their practices, reinforce recordkeeping, and adopt labor agreements that meet statutory standards.
Ultimately, California’s new framework signals a broader policy direction — one in which sustainability goals and labor protections coexist with efforts to expedite development. For employers, success in this new era means pairing opportunity with preparation: future projects will require future-ready labor compliance.
Originally reported by Eric S. Clark, John A. Snyder, Michael R. Watts of Jackson Lewis P.C in The National Law Review.
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