Pending State Law: New Labor Requirements for Pharmaceutical Research, Development, and Production Facilities

The State Legislature is considering legislation that would extend skilled workforce, prevailing wage, and labor reporting requirements to privately owned facilities used for pharmaceutical research, development, or production (Covered Facilities). If approved, SB 1185 (Cortese, Arreguín, Becker, Grayson, and Bryan) would not only apply to Covered Facilities during construction, but would also affect subsequent tenant improvements, equipment installation, repairs, and maintenance work.

SB 1185 was passed by the Senate by the May 29, 2026 legislative deadline, meaning that the bill will continue to move forward in the legislative process. It must be finally approved by the State Legislature by August 31, 2026, after which it would be routed to the Governor for approval. Future amendments are expected, and the summary below reflects the status of the bill as of June 10, 2026.

WHAT IS THE PURPOSE OF THE BILL?

SB 1185 explains:

• “The use of unskilled and untrained construction workers to perform work on pharmaceutical facilities is a risk to public health and safety because these facilities must often meet heightened standards for cleanliness, security, pathogen control, and operational continuity and may need to be repurposed to respond to a public health crisis.”
• “These risks could be ameliorated by requiring contractors and subcontractors that build and maintain pharmaceutical facilities to use a skilled and trained workforce.”

WHAT FACILITIES WOULD BE COVERED?

SB 1185 uses broad language to describe Covered Facilities:

• The bill would apply to an owner, operator, or developer of a facility used for the “research, development, or production of pharmaceutical products.”

• The foregoing “includes a facility that will conduct activities described in Code 325411 or 325412 of the North American Classification System (NAICS), as that code read on January 1, 2025, and that involve the production of a pharmaceutical product, including starting materials, intermediaries, and active pharmaceutical intermediates.”
• NAICS Code 325411 applies to “Medicinal and Botanical Manufacturing” and “comprises establishments primarily engaged in (1) manufacturing uncompounded medicinal chemicals and their derivatives (i.e., generally for use by pharmaceutical preparation manufacturers) and/or (2) grading, grinding, and milling uncompounded botanicals.” Recall that pursuant to the SB 1185 provision above, the facility must also involve the production of a pharmaceutical product to qualify as a Covered Facility under this NAICS category.
• NAICS Code 325412 applies to “Pharmaceutical Preparation Manufacturing” and “comprises establishments primarily engaged in manufacturing in-vivo diagnostic substances and pharmaceutical preparations (except biological) intended for internal and external consumption in dose forms, such as ampoules, tablets, capsules, vials, ointments, powders, solutions, and suspensions.” See the caveat above.
• The use of the words “or” and “includes” (without limitation) in the current version of SB 1185 raises questions regarding whether, and to what extent, the bill would apply to pharmaceutical research or development facilities with limited or no onsite production. The use of the term “pathogen control” in the Legislative declaration, which could, for example, include companies that create vaccines, also raises questions about the scope of the Covered Facilities.  That may be clarified through future amendments or guidance as the bill moves through the Legislature. 

WHAT WORK WOULD BE SUBJECT TO SB 1185 REQUIREMENTS?

• SB 1185 would require the owner, operator, or developer of a Covered Facility to require its contractors and subcontractors to use a “skilled and trained workforce” for initial and subsequent construction, alteration, demolition, installation, repair, and maintenance, as those terms are defined under Labor Code §§ 1720 and 1771.
• The term “skilled and trained workforce” is defined to mean that (1) all workers are either registered apprentices or skilled journeypersons and (2) at least 60% of the skilled journeypersons are graduates of an apprenticeship program for the applicable occupation.
• Skilled journeypersons would need to be paid at least the prevailing hourly wage rate for their applicable occupation and geographic area.

WHAT EXCEPTIONS WOULD APPLY?

• SB 1185 would not apply to work performed by the owner’s or operator’s own employees and would not prevent the owner or operator from using its own employees to perform covered work that has not been assigned to contractors.
• The bill also includes limited exceptions for qualifying workforce shortages and emergencies requiring immediate action to prevent harm to public health or safety or to the environment.
• The proposed monthly reporting and penalty provisions would not apply if all work on the project is covered by a qualifying project labor agreement that requires use of a skilled and trained workforce, provides arbitration procedures for disputes, and includes provisions to address community benefits.

WHAT PENALTIES COULD APPLY?

• If the Labor Commissioner determines that a contractor or subcontractor failed to meet SB 1185 requirements, the responsible contractor or subcontractor would be subject to civil penalties of up to $5,000 per month of work performed in violation of the bill.
• For a second or subsequent violation within a three-year period, the penalty would increase to up to $10,000 per month of work performed in violation of the bill.

POTENTIAL IMPLICATIONS

SB 1185 will likely be amended as it moves through the Assembly. If approved in its current form, the bill would affect how Covered Facilities plan, contract for, and administer construction and maintenance work that historically may not have been subject to public works-related requirements.

The California State Building and Construction Trades Council supports SB 1185, arguing in part: “Pharmaceutical manufacturing facilities are among the most technically complex construction environments in the modern economy . . . [and therefore, a] highly skilled and trained workforce is essential to ensuring that these systems are installed correctly the first time, maintaining the sterile environments required for safe and effective medicines.”

The Associated General Contractors oppose SB 1185, arguing in part: “By limiting competition and layering public-works mandates onto private projects, SB 1185 is likely to increase construction costs, delay project timelines, and discourage investment in California’s pharmaceutical and biotechnology sectors.”

Allen Matkins will continue to monitor SB 1185 and will provide an update if and when the bill is finally approved by the State Legislature and signed into law by the Governor.