Local Hiring Laws on Public Works Projects

With the downturn in the economy, some pubic agencies are imposing regulations that require contractors use a certain percentage of local workers on public works projects. The trend is being met with resistance from some quarters.

Stockton's Local Hire Law: On September 1, 2009, the City Council for the City of Stockton, California adopted a "Local Hire Ordinance that requires 50% of the workforce on a public works project of at least $100,000 be residents of the City of Stockton. To read the staff report and a copy of the ordinance, as well as view the video of those testifying both pro and con before the council, click here.

Workforce Qualifications: While the policy intent of the ordinance is clear, it may have unintended consequences. For example, most contractors have a regular, well-trained workforce that knows how to work together well. By requiring the contractor to hire at least 50% local residents, a contractor from out of the city would not be able to necessarily marshal the most qualified team with the right experiences to perform the project. Thus, the public agency may find that it takes more resources to monitor and manage the quality of construction.

Washington State Resident Hiring Law Unconstitutional: Many have also raised questions about the legality of local hire laws. For many years, the State of Washington had a law requiring 95% or more Washington State residents where more than 40 workers were used, and 90% or more Washington residents where less than 40 workers were used. In 1982, the Washington State Supreme Court declared that chapter 39.16 RCW was unconstitutional and violated the privileges and immunities clause of the U.S. Constitution, Article IV, Section 2.

To read a copy of the Supreme Court decision, Laborers Local Union No. 374, et al, Appellants, v. Felton Construction Company, et al, Respondents, click here.

Check Your Bidding Documents: Even though Washington State's law was struck down by the court 27 years ago, a simple Google search for "RCW 39.16.005" reveals a number of public agencies in the state who still reference this law in their standard bidding documents. Check your bidding documents and make sure you've updated your boilerplate language.

Cleveland's Local Hiring Law Struck Down: The City of Cleveland, Ohio faced a similar situation with their local hiring ordinance, the Lewis Law. The Federal Highway Administration, which was funding road work for the city withheld funds from the city because of the ordinance. The United States Court of Appeals held that FHWA was within their rights to withhold the money, effectively striking Cleveland's local hiring law. To read the decision of the Court of Appeals, click here.