BILL NUMBER: SB 966 CHAPTERED
BILL TEXT
CHAPTER 804
FILED WITH SECRETARY OF STATE OCTOBER 11, 2003
APPROVED BY GOVERNOR OCTOBER 10, 2003
PASSED THE SENATE SEPTEMBER 11, 2003
PASSED THE ASSEMBLY SEPTEMBER 10, 2003
AMENDED IN ASSEMBLY SEPTEMBER 9, 2003
AMENDED IN ASSEMBLY AUGUST 26, 2003
AMENDED IN ASSEMBLY JULY 3, 2003
AMENDED IN SENATE APRIL 30, 2003
INTRODUCED BY Senator Alarcon
FEBRUARY 21, 2003
An act to amend Section 1726 of, and to add Section 1781 to, the
Labor Code, relating to prevailing wages.
LEGISLATIVE COUNSEL'S DIGEST
SB 966, Alarcon. Public works and prevailing wages: contractor's
costs.
Existing law generally requires the payment of the prevailing rate
of per diem wages and the prevailing rate for holiday and overtime
work to employees employed on public works projects that cost more
than $1,000. Existing law requires the Director of Industrial
Relations to determine these wage rates and to provide these wage
rates to an awarding body, as defined, that requests them. Existing
state regulations authorize an interested party, as defined, to
request that the director make a determination regarding the
applicability of these provisions to a particular project.
This bill would authorize a contractor to bring an action in a
court of competent jurisdiction to recover from an awarding body
specified labor costs, penalties, and legal fees if certain
conditions are met.
This bill would also authorize a contractor to bring an action to
recover from the body awarding a contract for a public work or
otherwise undertaking any public work any increased costs, as
defined, incurred by the contractor if certain conditions are met.
For purposes of this provision, this bill would define "awarding body"
to exclude the Department of General Services, the Department of
Transportation, and the Department of Water Resources, and define
"increased costs" to include, but not be limited to, labor cost
increases required to be paid to the contractor's workers and
penalties for which the contractor is liable, as specified.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1726 of the Labor Code is amended to read:
1726. (a) The body awarding the contract for public work shall
take cognizance of violations of this chapter committed in the course
of the execution of the contract, and shall promptly report any
suspected violations to the Labor Commissioner.
(b) If the awarding body determines as a result of its own
investigation that there has been a violation of this chapter and
withholds contract payments, the procedures in Section 1771.6 shall
be followed.
(c) A contractor may bring an action in a court of competent
jurisdiction to recover from an awarding body the difference between
the wages actually paid to an employee and the wages that were
required to be paid to an employee under this chapter, any penalties
required to be paid under this chapter, and costs and attorney's fees
related to this action, if either of the following is true:
(1) The awarding body previously affirmatively represented to the
contractor in writing, in the call for bids, or otherwise, that the
work to be covered by the bid or contract was not a "public work," as
defined in this chapter.
(2) The awarding body received actual written notice from the
Department of Industrial Relations that the work to be covered by the
bid or contract is a "public work," as defined in this chapter, and
failed to disclose that information to the contractor before the bid
opening or awarding of the contract.
SEC. 2. Section 1781 is added to the Labor Code, to read:
1781. (a) (1) Notwithstanding any other provision of law, a
contractor may, subject to paragraphs (2) and (3), bring an action in
a court of competent jurisdiction to recover from the body awarding
a contract for a public work or otherwise undertaking any public work
any increased costs incurred by the contractor as a result of any
decision by the body, the Department of Industrial Relations, or a
court that classifies, after the time at which the body accepts the
contractor's bid or awards the contractor a contract in circumstances
where no bid is solicited, the work covered by the bid or contract
as a "public work," as defined in this chapter, to which Section 1771
applies, if that body, before the bid opening or awarding of the
contract, failed to identify as a "public work," as defined in this
chapter, in the bid specification or in the contract documents that
portion of the work that the decision classifies as a "public work."
(2) The body awarding a contract for a public work or otherwise
undertaking any public work is not liable for increased costs in an
action described in paragraph (1) if all of the following conditions
are met:
(A) The contractor did not directly submit a bid to, or directly
contract with, that body.
(B) The body stated in the contract, agreement, ordinance, or
other written arrangement by which it undertook the public work that
the work described in paragraph (1) was a "public work," as defined
in this chapter, to which Section 1771 applies, and obligated the
party with whom the body makes its written arrangement to cause the
work described in paragraph (1) to be performed as a "public work."
(C) The body fulfilled all of its duties, if any, under the Civil
Code or any other provision of law pertaining to the body providing
and maintaining bonds to secure the payment of contractors, including
the payment of wages to workers performing the work described in
paragraph (1).
(3) If a contractor did not directly submit a bid to, or directly
contract with a body awarding a contract for, or otherwise
undertaking a public work, the liability of that body in an action
commenced by the contractor under subdivision (a) is limited to that
portion of a judgment, obtained by that contractor against the body
that solicited the contractor's bid or awarded the contract to the
contractor, that the contractor is unable to satisfy. For purposes
of this paragraph, a contractor may not be deemed to be unable to
satisfy any portion of a judgment unless, in addition to other
collection measures, the contractor has made a good faith attempt to
collect that portion of the judgment against a surety bond,
guarantee, or some other form of assurance.
(b) When construction has not commenced at the time a final
decision by the Department of Industrial Relations or a court
classifies all or part of the work covered by the bid or contract as
a "public work," as defined in this chapter, the body that solicited
the bid or awarded the contract shall rebid the "public work" covered
by the contract as a "public work," any bid that was submitted and
any contract that was executed for this work are null and void, and
the contractor may not be compensated for any nonconstruction work
already performed unless the body soliciting the bid or awarding the
contract has agreed to compensate the contractor for this work.
(c) For purposes of this section:
(1) "Awarding body" does not include the Department of General
Services, the Department of Transportation, or the Department of
Water Resources.
(2) "Increased costs" includes, but is not limited to:
(A) Labor cost increases required to be paid to workers who
perform or performed work on the "public work" as a result of the
events described in subdivision (a).
(B) Penalties for a violation of this article for which the
contractor is liable, and which violation is the result of the events
described in subdivision (a).