Project Labor Agreements

California’s Public Contract Code, in Division 2, Part 1, Chapter 2.8, deals with Project Labor Agreements (“PLAs”). Section 2500 authorizes a public entity to use, enter into, or require contractors to enter into, a project labor agreement for a construction project only if the agreement includes all of the required taxpayer protection provisions. In addition, this section provides definitions for the terms “project labor agreement” and “public entity.”

Section 2500.5 provides that a state agency may use, enter into, or require contractors to enter into, a project labor agreement that applies to a project or set of projects with aggregate construction costs in excess of $35 million, only if the agreement also includes provisions to address community benefits.

Community benefits may include partnerships with high road construction careers programs, local hire goals, coordination with programs that assist veterans in transitioning to civilian employment, job fairs for construction apprenticeship or preapprenticeship programs, or other methods agreed upon by the parties to promote employment and training opportunities for veterans and individuals who reside in economically disadvantaged areas. This section applies to project labor agreements entered into on or after January 1, 2026.

Section 2501 states that the members of the governing board of a local public entity may choose by majority vote whether to use, enter into, or require contractors to enter into a project labor agreement that includes all the taxpayer protection provisions for a specific project or projects awarded by that entity and whether to allocate funding to a specific project covered by such an agreement.

Section 2502 provides that, if a charter provision, initiative, or ordinance of a charter city prohibits the governing board’s consideration of a project labor agreement that includes all the taxpayer protection provisions for a project to be awarded by the city, or prohibits the governing board from considering whether to allocate funds to a city-funded project covered by such an agreement, then state funding or financial assistance is prohibited from being used to support that project. 

Section 2503 states that, if a charter provision, initiative, or ordinance of a charter city prohibits, limits, or constrains in any way the governing board’s authority or discretion to adopt, require, or utilize a project labor agreement that includes all the taxpayer protection provisions for some or all of the construction projects to be awarded by the city, then state funding or financial assistance is prohibited from being used to support any construction projects awarded by the city.