Workforce development: The need to address the shortage of apprentices in California’s construction industry

By Thomas L. Brown¹

Many articles have been written about the shortage of a skilled trained workforce in California and throughout the country.² This article presents the impact the shortage is having on the ability of contractors to meet the California Department of Industrial Relations (“DIR”) guidelines for training apprentices: one apprenticeship hour worked for every five journeyman hours worked on all public works projects in California.³

The construction industry in California and across most parts of the country is experiencing robust growth driven by substantial investments in infrastructure, housing, and commercial developments. While this is good news for those within the industry, the California construction industry continues to face significant shortages of apprentices required to meet the needs of this growth. Apprentices play a crucial role in the construction industry by ensuring the continuity of skilled labor and fostering innovation. Apprentices are vital for the industry’s long-term sustainability, so vital that industry groups are constantly looking for ways to recruit and develop new apprentices.

The California Legislature has also recognized the importance of apprentices. California law requires contractors to employ apprentices on public works projects at a ratio of one apprentice hour for every five journeyman hours, calculated at the end of a project, to ensure the further development of the skilled labor workforce.⁴ Apprenticeship programs help meet the goal of developing a work force by providing structured, hands-on training that combines practical experience with classroom instruction, and by producing highly skilled and versatile workers. By including apprentices, contractors can enhance productivity, maintain high standards of work quality, and contribute the development of a skilled workforce.

The apprenticeship crisis

The apprenticeship crisis is not a new issue affecting the California construction industry. The DIR released apprenticeship data in 2016 and 2017 depicting the lack of apprentices within the industry.⁵Apprentices accounted for just 6.6 percent of the construction industry workforce in 2016 and 6.8 percent in 2017. When broken out by trades, some fare better than others, with certain trades perpetually falling short on apprentices. Though this represents the latest DIR published data, current challenges in meeting apprentice ratios shows that the lack of available apprentices within the construction industry did not end with these reports. The shortage of apprentices continues to cause contractors operational and compliance issues.

In 2018, California Governor Newsom, recognizing the apprenticeship crisis, set a goal of 500,000 apprenticeships by 2029. Four years later in July of 2022, the DIR, the California Labor and Workforce Development Agency, and the California Division of Apprenticeship Standards, published a joint, five-point action plan aimed to increase apprenticeships.⁶ In the accompanying press release, the DIR stated, “Although California’s investments and policy support for apprenticeship are the most generous and extensive in the country, the current system is not currently equipped to rise to the challenge of serving 500,000 Californian apprentices by 2029.”⁷

The shortage of apprentices is rooted in multiple factors, including a disconnect between the education system and the construction industry, an aging workforce with many experienced journeymen retiring, and a lack of exposure in recruiting new apprentices. However, regardless of the cause of the apprenticeship crisis, it is apparent that contractors cannot employ sufficient apprentices to meet the increasing demand throughout the state, leading to contractors’ difficulty, and even inability, to employ sufficient apprentices to satisfy the 1-to-5 ratio requirement.

Impact on contractors

The current scarcity of apprentices in California creates operational and compliance issues for contractors across the state, and it impacts how contractors comply with certain apprenticeship requirements, such as the requirement that contractors employ apprentices at a 1-to-5 ratio, calculated at the end of a project based on total labor hours per trade.

The shortage of apprentices makes it difficult for contractors to meet this requirement, and the DIR provides some exemptions pertaining to operating engineers, laborers, and teamsters.⁸ Still, the lack of apprentices throughout the industry means contractors face an uphill battle to meet the requirements, risking non-compliance. Non-compliance can lead to significant penalties and even disqualification from bidding on future public works projects.⁹ Overall, the DIR has not provided clear guidance on compliance when apprentices are simply not available.

Contractors currently must navigate these challenges by interpreting and following the guidelines set forth in Section 230.1 of Title 8 of the California Code of Regulations. This regulation attempts to provide a framework for contractors to comply with the apprenticeship ratio requirement amid a shortage of apprentices, but instead leaves contractors with more questions and uncertainty. When a contractor is not employing sufficient apprentices to meet the 1-to-5 ratio, the contractor must request in writing the dispatch of apprentices from each DIR-approved apprenticeship committee providing training in the applicable craft or trade in the geographic area of the site of the public work 72 hours before the date on which apprentices are needed.¹⁰

If no committee dispatches apprentices, or agrees to dispatch apprentices during the period of the project, within 72 hours (excluding weekends and holidays) of the request, the contractor has met its burden to request apprentices and is not in violation of the 1-to-5 ratio requirement for the remainder of the project, provided the contractor made the request in enough time that it would have been able to meet the requirement if the apprentices were dispatched (in other words not at the end of the project but instead when enough hours were available to have apprentices work and meet the ratio).¹¹ Additionally, if after the contractor requests apprentices from all DIR-approved apprenticeship committees in the area and an apprenticeship committee dispatches fewer apprentices than the contractor requested and the contractor employs those apprentices who were dispatched, the contractor is considered in compliance with the ratio requirement.¹²

In practice, the regulations can create confusion and difficulty for contractors. Satisfying the carve-out exemption to the 1-to-5 ratio requirement requires a contractor’s diligence in documenting and storing each request for the dispatch of apprentices. Similarly, trade unions want their journeymen employed and can be reluctant to recruit and send apprentices when journeymen are on the bench. The regulations also do not account for the ever-evolving needs and climate of a construction worksite, such as the sudden change in crew size, change order and force account work, emergency tasks required, and other issues that present themselves at a moment’s notice.¹³

Contractors often encounter the impossibility of employing enough apprentices to satisfy the 1-to-5 apprenticeship ratio requirement. Throughout the life of the project, the project owners also have a responsibility to review the contractor’s certified payroll reports and other documents to ensure compliance with prevailing wage and apprenticeship requirements.¹⁴ Additionally, the project owners should open a dialogue with the contractors about the challenges in obtaining enough apprentices when the reports show a deficiency. Through open communication and cooperation, project owners and contractors alike can develop strategies to increase apprentice involvement on each project and increase compliance with the 1-to-5 apprentice to journeyman ratio requirement, or document the inability to meet the ratio in real time.

Industry efforts to backfill the apprenticeship shortage

Contractors throughout the industry, trade unions, various industry associations, and government agencies are engaged and working to address the apprenticeship shortage.

The construction industry must work in unison to increase awareness about the benefits and opportunities apprenticeships can provide to all those seeking employment. Increased awareness through school programs and open public dialogue can help recruit more apprentices into the construction industry. In addition to other efforts to increase apprenticeship within the construction industry, the DIR has emphasized the need for more women to join the skilled construction workforce. In March of 2024, the DIR released an article pleading for more women to join a dwindling construction labor workforce, and stated, “[t]he construction industry is critical to our nation’s and state’s economy. With a shortfall of building and construction trade talent, it’s never been a better time for women to enter these historically male-dominated construction occupations that can provide a pathway to high-paying careers and family-sustaining financial security.”¹⁵

The shortage of apprentices in California’s construction industry is a well-known, pressing issue that requires coordinated efforts from all stakeholders. While the challenge is significant, it also presents an opportunity to innovate and strengthen the pathways into the construction workforce. By addressing the root causes of the shortage and implementing effective strategies, the industry can ensure it has a skilled and sustainable workforce to meet current and future demands.

Contractors, in particular, must stay engaged with these efforts, and while the shortage persists, contractors must adapt their work practices to navigate the current landscape and ensure compliance. Requesting sufficient apprentices when working on public works projects is necessary to ensure compliance with California’s apprenticeship requirements.¹⁶ Still, the regulations fall short of clear guidance. The industry must encourage lawmakers and the DIR to provide more clarity when there is an impossibility to meet the 1-to-5 apprentice ratio.

The apprenticeship crisis will not disappear overnight; addressing the issue begins with active communication throughout the industry. As the industry continues to promote workforce development, a critical topic is innovative ways to improve both the apprenticeship opportunities and the regulations guiding them, so the California construction industry can flourish and be a role model industry as California pushes to reach Governor Newsom’s goal of 500,000 apprentices by 2029.

¹Mr. Thomas L. Brown currently serves as President of the Board of Directors of the Associated General Contractors of America. Thomas L. Brown has been associated with the construction industry since 1972. Visit https://www.agc.org/about-us/leadership for more information regarding Thomas L. Brown and his dedication and service to the construction industry.

²See, e.g., “Construction Workforce Shortages Reach Pre-pandemic Levels Even as Coronavirus Continues to Impact Projects & Disrupt Supply Chains,” dated September 2, 2021, available at https://www.agc.org/news/2021/09/02/construction-workforce-shortages-reach-pre-pandemic-levels-even-coronavirus; “Construction Workforce Shortages Risk Undermining Infrastructure Projects As Most Contractors Struggle to Fill Open Positions,” dated August 31, 2022, available at https://www.agc.org/news/2022/08/31/construction-workforce-shortages-risk-undermining-infrastructure-projects-most-contractors-struggle-0; “Construction Firms Add 25,000 Jobs in July With Gains In All Subsectors As Pay Rises Faster Than Other Industries, Unemployment Rate Holds Steady,” dated August 2, 2024, available at https://www.agc.org/news/2024/08/02/construction-firms-add-25000-jobs-july-gains-all-subsectors-pay-rises-faster-other-industries; “Labor Shortage in California’s Construction Sector,” dated April 12, 2024, available at https://www.businessinsuranceusa.com/news/construction/labor-shortage-in-californias-construction-sector/; “How on-the-job training programs could help solve America’s massive labor shortage,” dated July 28, 2023, available at https://www.cnbc.com/2023/07/28/how-apprenticeship-programs-could-solve-massive-labor-shortage-in-us.html; “Construction industry faces massive labor shortage, needs over half a million workers,” dated March 15, 2023, available at https://spectrumnews1.com/ca/la-west/business/2023/03/16/construction-industry-faces-massive-labor-shortage–new-training-facility-helps-meet-demand; “The California Labor Shortage Explained,” available at https://www.sbci.com/the-california-labor-shortage-explained/.

³California Labor Code, § 1777.5. While this article addresses the apprenticeship ratio requirements of California, California is just one of a number of states regulating the employment of apprentices on public works projects. Some other states regulating the employment of apprentices on public works projects include Connecticut, Massachusetts, Nevada, New York, New Jersey, Ohio, Oregon, and Washington.

⁴Ibid.

⁵Apprenticeship data available in the Division of Apprenticeship Standards’ Annual reports, 2016 and 2017, available at https://www.dir.ca.gov/das/DAS_annualReports.html. Employee data within the California Construction industry available at https://fred.stlouisfed.org/series/CACONS.

⁶“Advancing Apprenticeship in California, A Five-Point Action Plan,” dated July 2022, available at https://www.dir.ca.gov/DAS/e-News/2022/Five-Point-Action-Plan.pdf.

⁷“Action Plan in Place for Reaching California’s Apprenticeship Goals,” dated July 2022, available at https://www.dir.ca.gov/DAS/e-News/2022/Action-Plan-in-Place-for-Reaching-California-Apprenticeship-Goals.html.

⁸For more information regarding the exemptions to the minimum apprentice ratio requirement, visit https://www.dir.ca.gov/DAS/RatioExemption.htm.

⁹Cal. Labor Code, §§ 1777.1, 1777.7.

¹⁰Cal. Code Regs., tit. 8, § 230.1, subd. (a).

¹¹Ibid.

¹²Ibid.

¹³Cal. Code Regs., tit. 8, § 230.1.

¹⁴See Lab. Code, §§ 1771.4, 1776.

¹⁵“Building a More Inclusive Future: Empowering Women in Construction Through Equity and Inclusion,” dated March 2024, available at https://www.dir.ca.gov/DAS/e-News/2024/Building-a-More-Inclusive-Future.html.

¹⁶Cal. Code Regs., tit. 8, § 230.1.