The City of San Francisco is causing a stir with a new local hire law that goes into effect on Friday, March 25, 2011. While a number of jurisdictions around the country encourage or require a certain percentage of the work on public works projects be performed by local workers, San Francisco's new ordinance is among the most stringent.
A Tougher Standard: Until now, the City had a less strict regulation requiring a non-binding "good faith" effort from contractors to hire half of their work force locally for public works projects. The new law - which applies to projects within 70 miles of the city and over $400,000 - requires that 20% of work hours be performed by city residents (approximately the amount performed under the current system). However, the percentage rises 5 points every year until it reaches 50%.
Local Hire Laws Face Problems in the Past: While local hire laws can be a popular way to try to funnel public dollars back to a region's economy, they are not without potential problems. A state-wide local hire law in Washington was struck down by a Washington State Supreme Court decision in 1982 as violating the privileges and immunities clause of the U.S. Constitution. Another local hire ordinance known as the "Lewis Law" was struck down in Cleveland, Ohio in 2007 (read the Court of Appeals decision here).
In spite of past challenges to similar laws, the new ordinance in San Francisco shows that there is still ongoing interest from many in directing as much public funding as possible back into the local economy.
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Mike Purdy's Public Contracting Blog© 2011 by Michael E. Purdy Associates, LLChttp://PublicContracting.blogspot.com
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