BILL ANALYSIS
AB 2537
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Date of Hearing: April 17, 2008
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 2537 (Furutani) - As Introduced: February 21, 2008
SUBJECT : Public works: exemption: volunteers.
SUMMARY : Extends a public works exemption for specified
"volunteers" and other related individuals until 2012.
EXISTING LAW :
1) Requires the prevailing wage rate to be paid to all workers
on public works projects over $1,000.
2) Defines "public work" to include, among other things,
construction, alteration, demolition, installation or repair
work done under contract and paid for in whole or in part out
of public funds.
3) Provides that the provisions of existing law dealing with the
payment of prevailing wages on public works projects do not
apply to work performed by a volunteer or volunteer
coordinator, as defined.
4) Defines a "volunteer" as an individual who performs work for
civic, charitable, or humanitarian reasons for a public
agency or 501 (c)(3) tax-exempt organization without promise,
expectation, or receipt of any compensation for work
performed.
5) Defines a "volunteer coordinator" as an individual paid by a
corporation or 501(c)(3) tax-exempt organization to oversee
or supervise volunteers.
6) Clarifies that an individual may be considered a "volunteer
coordinator" even if the individual performs some
non-supervisory work on a project alongside the volunteers,
so long as the individual's primary responsibility is to
supervise.
7) Specifies that an individual shall be considered a volunteer
only when his or her services are offered freely and without
pressure and coercion, direct or implied, from an employer.
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8) Authorizes a volunteer to receive reasonable meals, lodging,
transportation, and incidental expenses or nominal
non-monetary awards if those benefits and payments are not a
substitute form of compensation.
9) Excludes from the definition of volunteer an individual if
that person is otherwise employed for compensation at any
time (a) in the construction, alteration, demolition,
installation, repair, or maintenance work on the same
project, or (2) by a contractor, other than a 501(c)(3)
tax-exempt organization, that is receiving payment to perform
construction, alteration, demolition, installation, repair or
maintenance work on the same project.
10)Provides that the provisions of existing law dealing with the
payment of prevailing wages on public works projects do not
apply to work performed by members of the California
Conservation Corps or a certified Community Conservation
Corps.
11)Provides a January 1, 2009 sunset date to these provisions.
FISCAL EFFECT : Unknown
COMMENTS : This bill revisits an issue that arose in 2004
concerning the use of volunteer labor on certain public works
projects. Much of the attention that arose at that time was a
result of an enforcement action taken by the Department of
Industrial Relations (DIR) in July 2003 in relation to a stream
restoration project in Shasta County.
Brief Background on California Prevailing Wage Law
A feature of California law since the 1930s, existing law
generally requires that prevailing wages be paid to all workers
employed on public works projects. (Labor Code Section 1771).
Current law defines a "public work" as construction, alteration,
demolition, installation, or repair work done under contract and
paid for in whole or in part out of public funds. (Labor Code
Section 1720).
Advocates of prevailing wage laws generally argue that such
protections serve two important functions. First, such laws
ensure that skilled workers employed in public works projects
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are paid at least the wages and benefits that "prevail" in their
local communities. Second, proponents of prevailing wages argue
that such laws make sure that unscrupulous contractors do not
import unskilled or low skilled workers from other parts of the
country who would undercut the local workforce by working for
lower pay.
SB 975 (Alarcon), Chapter 1048, Statutes of 2002, among other
things, established a definition of "paid for in whole or in
part out of public funds" that conformed to several precedential
coverage decisions made by DIR. These coverage decisions
defined payment by land, reimbursement plans, installation,
grants, waiver of fees, and other types of public subsidy as
"public funds" for purposes of prevailing wage law.
The Labor Code also sets forth a statutory methodology for
determining the prevailing wage rate. (Labor Code Section
1773.9). This methodology defines the prevailing rate as the
single rate being paid to a majority of workers engaged in a
particular craft, classification, or type of work within the
locality and in the nearest labor market area. Where no single
rate is being paid to a majority of workers the prevailing rate
is the single rate being paid to the greatest number of workers
(also referred to as the "modal rate").
The Prior Labor Code Public Works "Volunteer" Exemption
Prior to 2004, Section 1720.4 of the Labor Code, originally
enacted in 1989, provided that "public works" shall not include
any otherwise covered work that meets all of the following
conditions:
(a)The work is performed entirely by volunteer labor.
(a)The work involves facilities or structures which are, or
will be, used exclusively by, or primarily for or on
behalf of, private nonprofit community organizations
including, but not limited to, charitable, youth,
service, veterans, and sports groups or associations.
(b)The work will not have an adverse impact on employment.
(c)The work is approved by the Director of Industrial
Relations as meeting the requirements of this section.
The previous section 1720.4 also required the Director of DIR to
request information on whether or not the work will have an
adverse impact on employment from the appropriate local or state
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organization of duly authorized employee representatives of
workers employed on public works.
The July 2003 DIR Enforcement Action
Significant media attention and controversy over this issue
following a July 2003 enforcement action by DIR stemming from a
stream restoration project in Shasta County.
In fiscal year 20010-01, the Department of Water Resources
provided grant funding to the Sacramento Watersheds Action Group
for a stream restoration project on Sulphur Creek in the City of
Redding. According to media reports, students from nearby
Shasta College were used for various activities including
planting seeds, clearing brush, repairing culverts, installing
rock beds to prevent erosion, and trash removal. The students
reportedly earned course credit for classes in watershed
restoration.
Responding to a complaint from a local labor organization, DIR
investigated and determined that, based on the submitted job
descriptions of the work performed by students and volunteers,
prevailing wages were required for the following work: willow
staking, spreading seeds and mulch, planting shrubs, operating
heavy equipment, site cleanup, off-hauling garbage, and planting
vegetation. The subsequent DIR enforcement action assessed back
wages and civil penalties.
In September 2003, the Department of Water Resources (DWR)
issued a memorandum that stated, "Due to the serious
implications to our programs that would arise from being unable
to support volunteerism, DWR is taking a conservative approach
until these issues can be clarified?We will not enter into any
new contracts possibly affected by these issues until we have a
clearer picture of the obligations of DWR and the grantees under
the Labor Code."
The 2004 Legislative Amendments to Labor Code Section 1720.4
Following the July 2003 enforcement action, there was an outcry
among many in the environmental community that the prior Labor
Code Section 1720.4, as interpreted by DIR, effectively
prohibited the mixed use of volunteer and paid labor on public
works projects.
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After lengthy negotiations between the environmental community
and representatives of organized labor, the Legislature enacted
AB 2690 (Hancock), Chapter #330, Statutes of 2004. AB 2690
amended Labor Code Section 1720.4 into its current form.
In order to address concerns that there may be abuses of any
"volunteer" exemption to California's prevailing wage laws, AB
2690 contained a January 1, 2009 sunset date.
ARGUMENTS IN SUPPORT :
Supporters argue that that ability to volunteer is a cornerstone
for many important projects in California, including land and
water conservation projects. It provides any citizen the
opportunity to donate his or her time for projects that benefit
their local community. Volunteerism is a crucial component to
the health and vitality of California, and the system works.
Supporters state that, at a time when the state is addressing
very serious fiscal deficits, extending this sunset provision
will allow California to tap into one of our greatest and most
economical resources - the generosity of human spirit.
Supporters also state that, since the revised volunteer
exemption was enacted in 2004, there have been no reported
complaints of abuse of the exemption reported to DIR or the
Division of Labor Standards Enforcement.
ARGUMENTS IN OPPOSITION :
The American Federation of State, County and Municipal Employees
(AFSCME) states that, although it lauds the intent of this bill
towards assisting volunteers relative to public works projects,
the exemption and extension of the sunset date countermands the
state's need for economic stability and an individual's need for
gainful employment. AFSCME argues that employers will often use
volunteers and others to achieve an objective without rewarding
the volunteer. They contend that this is a tacit, if not overt,
form of an employer avoiding their responsibility for employing,
paying and providing benefits to workers who, as employees, will
provide stable productivity and safety for the entity and the
public.
RELATED LEGISLATION :
SB 1345 (Ashburn) would eliminate the sunset date, thereby
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making the volunteer exemption permanent in statute. During
hearing before the Senate Committee on Labor and Industrial
Relations, some representatives of organized labor expressed
concern about liability issues and health and safety issues,
including workers' compensation, surrounding the use of
volunteers on public works projects. Some Members of the
Committee expressed a preference for an extension, rather than
the elimination, of the sunset date. However, the author was
not willing to take such an amendment, and the bill failed
passage.
AB 2364 (Walters) is identical to SB 1345. AB 2364 is pending
before this Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
Audubon Society
California Association of Local Conservation Corps
California Invasive Plant Council
California Outdoor Heritage Alliance
California Park & Recreation Society
City of Concord
City of Redding
Green California
Los Angeles Conservation Corps
Maritime Museum of San Diego
Ocean Institute
Sacramento County Board of Supervisors
San Francisco Maritime National Park Association
Trust for Public Land
Volunteer Centers of California
Opposition
American Federation of State, County and Municipal Employees
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091