The Overview

If you bid on or manage large public works projects in California, the clock on your prevailing wage rates is about to slow down. Under a law Gov. Gavin Newsom (D) signed September 27, 2026, California will update prevailing wage rates every six months instead of quarterly for public works contracts valued at $35 million or more. ​

California's Public works: prevailing wages bill, AB 1198 is the law behind the change. The law takes effect July 1, 2027, and applies only to public works contracts with an awarded value of $35,000,000 or greater.

What the Law Does

Under California's existing public works system, the Director of Industrial Relations sets the general prevailing rate of per diem wages that contractors must pay workers on covered projects. Currently, any change in those rates during a quarterly period is made available to the awarding body. The new law shifts that update cycle from quarterly to semiannual.

Certain housing projects are exempt, including those restricted by deed or subject to regulatory agreements with a governmental agency.

Any contractor, awarding body, or other affected representative can challenge a rate change by filing a verified petition with the Director of Industrial Relations within 20 days. The director must then initiate an investigation or hold a hearing and, except as specified, issue a final determination within 20 days of that filing. The determination takes effect 10 days after it is issued and remains in force until modified, rescinded, or superseded.

Because the threshold is $35,000,000, smaller public works contracts continue under the existing quarterly update schedule.

Legislative Status

Asm. Matt Haney (D) sponsored the bill. The Assembly passed it 65-6 on Jan. 29, 2026, and the Senate passed it 31-9 on Aug. 30, 2026, with the Assembly then concurring in Senate amendments 68-7. From introduction on Feb. 21, 2025, to the governor's signature, the bill took approximately 19 months to become law.

Rural County Representatives of California summarized AB 1198 in its August 2026 appropriations update, describing its proposed application to qualifying public works contracts.

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