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AB 889

Prevailing wage: per diem wages.

2025-2026 Regular Session Introduced by Phillip Chen and 3 co-sponsors

AB 889 updates California's prevailing wage laws, ensuring fair per diem wages for public works workers by removing exemptions and requiring accurate employer record-keeping.

Chaptered by Secretary of State - Chapter 626, Statutes of 2025.
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Bill Summary · AB 889

Summary of AB 889: Prevailing Wage: Per Diem Wages

Bill Overview

  • Bill Number: AB 889
  • Title: Prevailing Wage: Per Diem Wages
  • Status: Chaptered by Secretary of State - Chapter 626, Statutes of 2025
  • Introduced: February 19, 2025
  • Author: Hadwick
  • Coauthors: Gallagher, Chen, Flora

Purpose and Intent

AB 889 aims to amend existing laws regarding prevailing wage and per diem wages for workers engaged in public works projects in California. The bill seeks to clarify and update the process for calculating per diem wages, particularly in relation to employer contributions to fringe benefits and pension plans.

Key Provisions

  1. Removal of Annualization Exemptions:

    • The bill eliminates exceptions that allowed employers to avoid annualizing their contributions for public works projects compared to private construction. This change revokes any annualization exemptions authorized by the Director of the Department of Industrial Relations prior to January 1, 2026.

  2. Credit for Employer Payments:

    • Employers can take full credit for hourly contributions made to defined contribution pension plans that allow for immediate participation and vesting, even if the employer contributes at a lower rate or does not make contributions for private construction.

  3. Proof of Calculation:

    • Employers are required to demonstrate that their calculations for credits on employer payments are accurate. The Labor Commissioner is empowered to deny credit if the employer fails to provide adequate payment records.

  4. Definition of Per Diem Wages:

    • The bill expands the definition of per diem wages to include various employer payments such as health and welfare, pension, vacation, travel, subsistence, and training programs, among others.

  5. Annualization Principle:

    • The bill reinforces the principle of annualization, which requires that employer contributions to fringe benefits be calculated based on the total hours worked in a year across all projects, not just public works.

Impact

  • Affected Parties:

    • This legislation primarily impacts employers engaged in public works projects, workers receiving per diem wages, and the Department of Industrial Relations responsible for overseeing wage determinations.

  • Compliance Requirements:

    • Employers must maintain accurate records of contributions and ensure compliance with the new calculation methods for per diem wages. Failure to comply may result in denial of wage credits.

Procedural Aspects

  • The bill passed through various legislative committees and was approved by the Governor on October 11, 2025. It underwent multiple readings and amendments in both the Assembly and Senate before being chaptered.

Conclusion

AB 889 represents a significant update to California's prevailing wage laws, aiming to ensure fair compensation for workers on public projects while clarifying the responsibilities of employers regarding fringe benefits and wage calculations. The removal of exemptions and the emphasis on accurate record-keeping are intended to enhance compliance and protect workers' rights.

Compiled from official sources — confirm details with the bill’s official record.

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