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CC - ACTION ITEM:  Discussion of a Potential Residential Construction Minimum Wage Program and Direction to the City Manager as Deemed Appropriate.

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Meeting Date: August 10, 2026

Contact Person/Dept.:  Adam Troy/City Manager’s Office

Phone Number:  (310) 253-6000

Fiscal Impact:  Yes []    No [X]                                          General Fund:  Yes []     No [X]

Attachments:   Yes []     No [X]   

Public Notification:   (E-Mail) Meetings and Agendas - City Council (08/05/2026)  

Department Approval:                      Adam Troy, Assistant City Manager (08/03/2026)

RECOMMENDATION

Staff recommends the City Council discuss a potential Residential Construction Minimum Wage Program and provide direction to the City Manager as deemed appropriate.

BACKGROUND/DISCUSSION

On April 13, 2026, the City Council requested that a discussion of a residential construction minimum wage program for mid-size residential construction projects of 10 units or fewer and less than 85 feet in height including legal protections for undocumented workers be placed on the agenda for City Council discussion.

Staff reviewed the concept which is summarized below for discussion purposes.  Several jurisdictions across California are in the process of exploring residential construction minimum wage programs as a mechanism to address wage disparities in the private construction sector, including the Cities of Los Angeles and West Hollywood. Unlike public works projects, which are subject to state prevailing wage requirements under the California Labor Code, private residential construction projects have historically not been subject to locally mandated wage floors beyond the applicable state or local minimum wage. This gap has raised concerns among some policymakers and labor advocates regarding the adequacy of compensation for workers engaged in privately funded residential building and renovation projects, particularly as construction activity and housing development continue to expand across the region.

The concept of a residential construction minimum wage program would establish a wage standard specifically applicable to workers performing construction services on private residential developments within the City of Culver City. Such a program could set a minimum hourly wage for covered construction workers that exceeds the general municipal or state minimum wage, with the goal of improving worker compensation, reducing workforce turnover, attracting skilled labor, and potentially enhancing construction quality and workplace safety outcomes. Programs of this nature may also include provisions related to benefits, apprenticeship utilization, and enforcement mechanisms.

The establishment of a Residential Construction Minimum Wage Program represents a policy initiative that intersects labor standards, housing production, and economic development within the City of Culver City. This report analyzes the substantive dimensions of the proposed action, the legal framework governing local minimum wage authority, and the potential implications for stakeholders across the community.

Purpose

The residential construction sector has experienced significant growth in the City of Culver City and the broader Los Angeles metropolitan region, driven by sustained housing demand and state-mandated housing production targets. Despite this growth, construction workers engaged in residential building projects frequently earn wages that do not reflect the cost of living in the area, particularly given the high housing costs that characterize Southern California. A Residential Construction Minimum Wage Program would establish a wage floor specific to workers employed on residential construction projects within City limits, ensuring that the economic benefits of development activity are shared more equitably with the workforce that makes such development possible.

Authority and Legal Framework

California law grants municipalities broad authority to establish local minimum wage requirements that exceed the state minimum wage. Under the California Constitution and applicable provisions of the California Labor Code, cities may adopt ordinances setting higher wage floors for workers employed within their jurisdictions. Several California municipalities have enacted general local minimum wages, and a smaller number have adopted sector-specific wage standards targeting particular industries.

A Residential Construction Minimum Wage Program would need to be structured in compliance with state labor law, including applicable preemption doctrines. Additionally, the program would need to be evaluated for consistency with federal labor standards under the Fair Labor Standards Act to the extent applicable.  If the City Council provides direction to move forward, staff will work with the City Attorney’s Office to review and address any legal requirements.

Program Design Considerations

Several key design parameters would need to be determined as part of the exploration and eventual development of a Residential Construction Minimum Wage Program:

• Wage Level: The specific minimum wage rate for residential construction workers would need to be established based on analysis of prevailing wages, cost-of-living data, and comparable programs in other jurisdictions. The rate could be set as a fixed dollar amount, indexed to inflation, or tied to an established benchmark such as a percentage of the prevailing wage for public works projects.
• Applicability and Scope: The program would need to define which residential construction projects are covered. Policy choices include whether to apply the wage standard to all residential construction projects or only to projects exceeding a certain size, unit count, or valuation threshold. The initial proposal from April 26, 2026 was for mid-size residential construction projects of 10 units or fewer and less than 85 feet in height. Please note that the City of Los Angelos is considering mid-rise construction projects to be defined as any residential development, including mixed-use, with 10 or more residential units and under 85 feet in height. The definition of "residential construction" and the categories of workers covered (e.g., employees of general contractors, subcontractors, and temporary staffing agencies) would also require careful delineation.
• Exemptions: Consideration should be given to whether certain project types warrant exemption, such as affordable housing projects receiving public subsidies, owner-occupied single-family home renovations below a certain value, or projects undertaken by nonprofit housing developers.
• Enforcement Mechanisms: Effective enforcement is essential to the success of any wage standard. The program could incorporate requirements for certified payroll reporting, complaint-based investigation procedures, penalties for noncompliance, and potential debarment from future City-permitted projects. The City would need to assess staffing and resource requirements for administration and enforcement.
• Phase-In Period: A graduated implementation timeline may be appropriate to allow the construction industry to adjust to the new requirements, particularly for projects already in the pipeline at the time of adoption.
• Potential Impacts and Stakeholder Considerations
• The exploration process should incorporate robust stakeholder engagement to ensure that the perspectives of affected parties are considered in program design:
• Construction Workers and Labor Organizations: Workers and their representatives are likely to support wage protections that improve compensation and working conditions. Input from labor organizations can inform practical aspects of program design, including appropriate wage levels and enforcement mechanisms.
• Residential Developers and Contractors: The development community may raise concerns regarding the impact of increased labor costs on project feasibility, particularly for smaller-scale projects and projects with narrow financial margins. Developers of affordable housing projects may express particular concern about the interaction between wage requirements and the financial constraints of subsidized housing production.
• Community Members and Residents: Residents may have varied perspectives, balancing support for worker protections against concerns about potential effects on housing costs and the pace of housing production.
• Other Jurisdictions: Research into comparable programs adopted or considered by other California municipalities and jurisdictions nationwide should inform the City's approach. The experience of jurisdictions that have implemented similar programs can provide valuable data on actual impacts on wages, employment levels, housing costs, and construction activity.

Next Steps

Should the City Council direct staff to proceed with further development of a Residential Construction Minimum Wage Program, the following steps are recommended:

1.                     Conduct a comprehensive economic impact analysis examining the effects of various wage levels on residential construction costs, housing production, and worker earnings within the City of Culver City.

2.                     Engage in stakeholder outreach with construction workers, labor organizations, developers, contractors, affordable housing providers, and community members.

3.                     Research and analyze comparable programs in other jurisdictions to identify best practices and lessons learned.

4.                     Return to the City Council with a detailed program proposal, including recommended wage levels, applicability thresholds, exemptions, enforcement mechanisms, and an implementation timeline.

5.                     If desired, direct staff to prepare a draft ordinance consistent with applicable state and federal law.

ATTACHMENTS

None.

FISCAL ANALYSIS

There is no fiscal impact to discussing this issue. The fiscal impact will depend on the direction given by the City Council.

recommended motions

MOTION(S)

That the City Council:

1.                     Discuss a potential Residential Construction Minimum Wage Program; and

2.                     Provide direction to the City Manager as deemed appropriate.