UPDATE June 24, 2024
We win Prevailing Wage lawsuit against City of Phoenix and City of Tucson.
The Arizona Chapter of the Associated General Contractors (AZAGC), the Arizona Builders Alliance (ABA), and the Associated Minority Contractors of Arizona (AMCA), along with our attorneys at the Goldwater Institute who represented us, are pleased to announce a significant legal victory against the City of Phoenix and the City of Tucson regarding the prevailing wage ordinance. The court has ruled in favor of the construction organizations, affirming their stance against the ordinance. The judge struck down both prevailing wage ordinances in their entirety, holding they violated the state law prohibition on prevailing wage ordinances. We now urge the cities to cease wasting taxpayer money on further legal pursuits.
David Martin, President of AZAGC, stated: “We are thrilled with the court’s decision, which upholds the principles of a free market and removes unnecessary burdens from contractors. We encourage the City of Phoenix and the City of Tucson to accept this ruling and avoid further wasting taxpayer money on appeals.”
The Arizona construction industry stands united in celebrating this victory and calls for the cities to recognize the court’s decision and cease further legal challenges. The organizations believe that taxpayer money can be better spent on positive and constructive initiatives for the community.
UPDATE January 12, 2024
The Cities of Phoenix and Tucson passed prevailing wage ordinances this week, and AZAGC promised to challenge the legality of them. We will be teaming up with the Goldwater Institute, the Arizona Builders Alliance, and Associated Minority Contractors of Arizona to explore the best legal path to challenge illegal prevailing wage ordinances. More to come as things unfold.
UPDATE January 8, 2024
AZAGC issued a press release announcing our decision to sue cities that adopt an illegal prevailing wage on construction work.
Read Press Release: AZAGC to Sue for Clarification
December 2023
The City of Phoenix has drafted a proposed ordinance set to take effect on July 1, 2024 to implement a prevailing wage for construction projects over $4,000,000 on city-owned or leased property.
It is AZAGC’s position that the ordinance violates Title 34-321 which states:
Agencies and political subdivisions of this state shall not by regulation, ordinance or in any other manner require public works contracts to contain a provision requiring the wages paid by the contractor or any subcontractor to be not less than the prevailing rate of wages for work of a similar nature in the state or political subdivision where the project is located.
The association is considering its legal options and opposes the ordinance.
The ordinance will require:
- A covered employer pay prevailing wage on projects per the Davis-Bacon Act which includes wages and fringe benefits.
- Weekly reporting to the city engineer that the contractor has paid the prevailing wage.
- Proper record-keeping via certified payroll which shall be preserved for four (4) years.
- Employers post a letter at the jobsite outlining the prevailing wage requirement including the process to submit a complaint to the city.
- The city engineer create a complaint form.
- The general contractor to be responsible for subcontractors.
- The engineer to review and investigate complaints.
- Upon the finding of non-compliance create a corrective action plan for the contractor.
- The contractor an opportunity to dispute the finding.
- Sanctions to include, wage restitution, liquidated damages of three times the wage owed, payment withholding, and a recission of the contract.
- For multiple violations, debarment and a fine of 3% of the total cost of construction.
The ordinance does not apply to:
- Construction contracts less than $4,000,000.
- Contracts subject to Federal prevailing wage law.
- Projects solicited before July 1, 2024.
- Projects excluded from the City of Phoenix Procurement Code.
- Projects in the 2023 GO Bond Program.
- Job Order Contracts.
- Affordable Housing construction projects.
- Readvertise projects where the city did not receive three bids.
- Public infrastructure reimbursements between the city and private developers.
