Popup outlet on kitchen island - is it against building codes? California
This would not violate the NEC, which I think Ca uses. 
Your building dept can tell you what electrical codes your area follows.

Possibly your contractor thought you were referring to the receptacles being face-up. That would be a violation of the NEC for a kitchen counter receptacle.

The main stipulation would be that they would need to be GFI protected by an upstream GFI device or breaker, and that it is hard wired.