contractors on "public works" projects [have] to pay "the general prevailing rate of per diem wages for work of a similar character in the locality in which the work is performed." . . . The term "public works" was defined as work done for public agencies and work paid for with public funds. ... Simply put, "[p]revailing wage laws are based on the . . . premise that government contractors should not be allowed to circumvent locally prevailing labor market conditions by importing cheap labor from other areas."
Basically, the law requires public employers to pay "prevailing" wages. But "prevailing" usually means "pretty darn high" if you have ever seen them. They are calculated by the Bureau of Labor Statistics and state counterparts (such as the Department of Industrial Relations).
Anyway, so California's constitution authorizes "charter cities," which have broad authority to govern themselves. State laws preempt charter cities' rules in certain circumstances.
Vista, CA, is a charter city. Vista was implementing some public works projects, constructing buildings and such. The project did not call for paying the "prevailing" wage and some unions sued.
Cutting to the chase, here is the 5-2 holding:
Here, we reaffirm our view — first expressed 80 years ago (see City of Pasadena v. Charleville (1932) 215 Cal. 384, 389 (Charleville)) — that the wage levels of contract workers constructing locally funded public works are a municipal affair (that is, exempt from state regulation), and that these wage levels are not a statewide concern (that is, subject to state legislative control).
How fast will someone try to pass an initiative to overturn this one?
The case is State Building and Const. Trades Council, etc. v. City of Vista and the opinion is here.