3/19/2014California Busts Red Light Camera Companies Over Wage Laws
California government fines Redflex and ATS for underpaying contractors.
The two largest providers of red light camera systems in the country have been caught flouting labor laws. The California Department of Industrial Relations has taken action against American Traffic Systems (ATS) of Arizona and Redflex Traffic Systems of Australia for failing to pay contractors prevailing wage rates, despite a contractual obligation to do so.
ATS was caught violating the rules in South San Francisco in 2012. Six years earlier, the city signed a contract with ATS to install, operate and maintain the devices in return for keeping $5000 per month from the ticket revenue at each intersection approach. In 2009, ATS convinced the city to expand the number of photo enforced intersections. ATS subcontracted the new installation work to a company called Republic ITS. Republic was to receive up to $263,100 to install conduit and wires, erect a pole for the red light camera, connect the electricity and ensure all the proper permits were obtained.
For publicly funded installation work of this sort, California Labor Code Section 1771 requires the payment of "prevailing wages." This statute, put in place for the benefit of labor unions, inflates the cost of labor far above market rates. ATS insisted the prevailing wage requirement did not apply because the subcontracted work was "incidental" to its contract with South San Francisco because the cameras are private property, not public property. State officials rejected the argument.
"It is equally clear, however, that installation of the equipment is not 'incidental' to these services," DIR Director Christine Baker ruled. "City cannot use the red light camera enforcement system to monitor red light violations unless and until the cameras and related equipment are installed by ATS. The equipment is the heart of the system... The city is not buying the equipment; it is paying for its installation and use... The installation constitutes public work subject to prevailing wage requirements because it is paid for in whole or in part out of public funds."
ATS attempted that argument even though Redflex had already lost a similar appeal in 2010. The Australian firm subcontracted with JD Baker Construction Company to install cameras in the city of Hayward, noting for city officials that the JD Baker employees were members of the Operating Engineers Local Union Number 3. A year later, Redflex entered subcontracts with St. Francis Electric Inc ($125,086), Rader Excavating Inc ($20,873) and Pacific West Space Communications ($144,418). The arrangement was found in violation of state law.
The violations came to light as the city of San Rafael decided to drop its red light camera program earlier this month. The Highwayrobbery.net website obtained documentation that Redflex last year was fined $24,860 for its labor law violations in San Rafael. A systems installer was paid $22.38 per hour instead of the union rate of $41.96 per hour in September 2009.
A copy of the South San Francisco ruling is available in a 270k PDF file at the source link below.