California Construction Law Sees Major Overhaul with New Legislation Impacting Licensing, Labor, and Project Delivery

Over the past year, California lawmakers introduced over 50 new statutes, with 14 specifically targeting contractor licensing and construction operations. These changes reflect growing emphasis on labor protections, sustainable infrastructure, and public-private partnerships. Among the most consequential are AB 2293, AB 2235, AB 1034, AB 2579, AB 2696, SB 1162, and AB 3190.

Healthcare Joint Powers Authority Expansion – AB 2293

AB 2293 supports a collaboration between public entities and nonprofit health organizations to expand access to healthcare. It allows nonprofit mutual benefit corporations to form a Joint Powers Authority (JPA) with public agencies, facilitating healthcare delivery without entering the practice of medicine directly.

Healthcare JPAs must use a skilled and trained workforce, unless covered by a project labor agreement. Private entities on JPA projects must also “certify, in writing and under penalty of perjury, that prevailing wages will be paid to workers on the project.”

Streamlined Wind Energy Project in Long Beach – AB 2235

AB 2235 enables the Port of Long Beach’s Pier Wind Project to use alternative delivery methods, such as best value procurement, bypassing traditional design-bid-build procedures. The project will create a major terminal for offshore wind turbines, with full construction estimated at $4.7 billion.

“According to the Port of Long Beach, fully assembled turbines would be towed to wind lease areas 20 to 30 miles off the coast in Central and Northern California.”

Construction could begin as early as 2027, with phased completions through 2035.

PAGA Exemption for Construction Extended – AB 1034

AB 1034 extends until 2038 a key exemption from Private Attorney General Act (PAGA) lawsuits for construction workers covered by qualifying collective bargaining agreements. The law requires CBAs to explicitly waive PAGA in clear terms and offer binding arbitration.

This extension helps employers minimize litigation risks while maintaining negotiated labor standards and dispute resolution processes.

Exterior Elevated Inspections Timeline Adjusted – AB 2579

Due to pandemic-related delays and inspection backlogs, AB 2579 extends the compliance deadline for inspecting balconies and elevated elements on multifamily buildings from January 1, 2025, to January 1, 2026. Properties inspected before 2019 remain in compliance until 2026.

This law aims to reduce hazards like dry rot and structural failures while easing compliance for building owners.

New Labor Liability Rules for Contractors – AB 2696

AB 2696 gives joint labor-management cooperation committees the authority to sue direct contractors—not just subcontractors—for unpaid wages and benefits on private projects.

The law broadens legal accountability and encourages contractors to tighten subcontractor oversight. AB 2696 is expected to drive greater compliance with labor and wage standards on private construction.

Pay Transparency and Apprenticeship Reporting – SB 1162

SB 1162 builds on California’s pay equity laws by mandating disclosure of pay scales in job postings and adding reporting requirements to the state’s Public Contract Code. Employers must now include details of apprentices’ graduation and program location in monthly compliance reports.

The law also establishes a public online database to confirm graduation from certified California apprenticeship programs.

Prevailing Wage Now Applies to More Housing Projects – AB 3190

AB 3190 expands prevailing wage requirements to affordable housing projects funded through tax credits, such as low-income housing tax credits. The goal is to ensure equitable treatment of workers across public and tax-subsidized projects.

While private projects receiving less than $3 million in public funds may still qualify for exemptions, developers are urged to conduct a cost-benefit analysis. “Tax breaks may trigger prevailing wage requirements,” the law notes.

Conclusion

California’s sweeping construction law changes demonstrate the state’s push for higher labor standards, greater transparency, and more effective infrastructure delivery. From alternative procurement to workforce requirements and pay equity, these updates are reshaping the construction landscape.

“It is important to stay informed of these legal updates for maintaining regulatory compliance, identifying strategic opportunities, and avoiding potential liabilities,” the article concludes.

For assistance navigating these changes, construction firms are advised to consult with legal counsel familiar with California’s evolving regulatory environment.

Originally reported by Aalrr.