BILL NUMBER: SB 569	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 17, 2007
	AMENDED IN SENATE  MARCH 26, 2007

INTRODUCED BY   Senator Steinberg

                        FEBRUARY 22, 2007

   An act to amend Sections 1743, 1771.2, and 1776 of, and to add
Section 1726.5 to, the Labor Code, relating to public works.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 569, as amended, Steinberg. Public works: prevailing wage
payments: payroll records.
   (1) Existing law generally defines a "public work" as
construction, alteration, demolition, installation, or repair work
that is done under contract and that is paid for, in whole or in
part, out of public funds, as defined, and requires the payment of
the general prevailing rate of per diem wages to workers employed on
public works projects costing over $1,000, unless the awarding body,
as defined, elects to initiate and enforce a labor compliance
program, as defined, for every public works project under the
authority of that awarding body.
   This bill would require the body awarding a public work contract
to report to the Contractor's State License Board the name and
license number of each contractor and subcontractor performing the
public work and the name, location, and identification number of the
public works project for which the contract is awarded, as provided.
   (2) Existing law requires the Labor Commissioner to issue a civil
wage and penalty assessment to a contractor or subcontractor or both,
if the Labor Commissioner determines, after investigation, that the
contractor or subcontractor violated the laws regulating public works
contracts. Existing law provides that the contractor and
subcontractor are jointly and severally liable for all amounts due
pursuant to a final order or a judgment on that final order, but
requires the Labor Commissioner to collect amounts due from the
subcontractor before pursuing the claim against the contractor.
   This bill would specify that the contractor and subcontractor are
jointly and severally liable for all amounts due pursuant to a final
order or a judgment on that final order in any action initiated by
any party to enforce the laws regulating public works contracts,
 and would delete the provision requiring the Labor
Commissioner to collect amounts due from the subcontractor before
pursuing the claim against the contractor   but would
  ,   generally   ,   release a
contractor from a liability for penalties resulted from a
subcontractor's failure to pay prevailing wages, except as otherwise
specified  .
   (3) Existing law generally requires contractors engaged in public
works to pay employees the prevailing wage, as determined by the
Director of Industrial Relations, and authorizes a joint
labor-management committee established pursuant to a specified
provision of federal law to bring an action against any employer who
fails to pay prevailing wages as required by state law, not later
than 180 days after the filing of a valid notice of completion, as
specified, or acceptance of the public work, whichever occurs later,
as provided.
   This bill would instead authorize a joint labor-management
committee to bring an action against a contractor or a subcontractor
who fails to pay prevailing wages or comply with other specified
state law requirements not later than 4 years after the violation
occurs. This bill would also require the court to enjoin the
violation, to award unpaid wages for distribution to employees, and
to award the joint labor-management committee reasonable attorney's
fees, costs, and expenses incurred in maintaining the action, as
provided, and would grant the court discretion regarding the award of
liquidated damages.
   (4) Existing law requires each contractor and subcontractor on a
public works project to keep accurate payroll records containing
information regarding his or her employees, including name, address,
social security number, and work history, and authorizes, for the
purposes of these payroll recordkeeping requirements, the use of
printouts of payroll data that are maintained as computer records, if
certain conditions are met. Existing law requires that a certified
copy of all payroll records be made available to the public upon
request made by the public to the awarding body, the Division of
Apprenticeship Standards of the Department of Industrial Relations,
or the Division of Labor Standards Enforcement, but disallows public
access to the records at the principal office of the contractor.
Existing law provides for the reimbursement of costs incurred by a
contractor, a subcontractor, an awarding body, or one of the
specified state entities in preparing the payroll records requested
for inspection by the public if certified copies of the payroll
records have not been submitted to the awarding body, the Division of
Apprenticeship Standards, or the Division of Labor Standards
Enforcement.
   This bill would restructure and renumber the provisions relating
to the payroll recordkeeping requirements, would allow the public to
request a copy of the payroll records directly from the contractor or
subcontractor, and would allow only a contractor or a subcontractor
to be reimbursed for the costs of copying the payroll records. This
bill would also delete the existing prohibition relating to public
access to the payroll records maintained at the principal office of
the contractor and would instead specify that existing law may not be
construed to require that members of the general public be given
access to those records. This bill would also  delete
  modify  the provisions authorizing the use of
printouts of payroll data that are maintained as computer records
 to   require   that the computer programs used
to maintained the payroll records meet certain specified
requirements  .
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1726.5 is added to the Labor Code, to read:
   1726.5.  (a) The body awarding a contract for a public work shall
report to the Contractors State License Board the name and license
number of each contractor and subcontractor performing the public
work and the name, location, and identification number of the public
works project for which the contract is awarded.
   (b) The information required to be submitted by an awarding body
to the Contractor's State License Board pursuant to subdivision (a)
shall be reported to the board not later than 30 days after the
information becomes available to the awarding body.
   (c) The Contractor's State License Board shall include the
information reported to the board by awarding bodies, as required by
subdivision (a), relating to individual licensed contractors, on the
board's Web site.
  SEC. 2.  Section 1743 of the Labor Code is amended to read:
   1743.  (a) (1) The contractor and subcontractor shall be jointly
and severally liable for all amounts due pursuant to a final order
under this chapter or a judgment in any action to enforce the
obligations of this chapter, regardless of the party bringing the
action in which the judgment is rendered.  The Labor Commissioner
shall first exhaust all reasonable remedies to collect the amount
due from the subcontractor before pursuing the claim against the
contractor. A contractor shall not be liable for penalties incurred
as a result of a subcontractor's failure to pay prevailing wages,
except as provided by Section 1775. 
   (2) For purposes of this section, the terms "contractor" and
"subcontractor" mean contractor and subcontractor, as defined in
Section 1722.1.
   (b) From the amount collected, the wage claim shall be satisfied
prior to the amount being applied to penalties. If insufficient money
is recovered to pay each worker in full, the money shall be prorated
among all workers.
   (c) Wages for workers who cannot be located shall be placed in the
Industrial Relations Unpaid Wage Fund and held in trust for the
workers pursuant to Section 96.7. Penalties shall be paid into the
General Fund.
   (d) A final order under this chapter or a judgment thereon shall
be binding, with respect to the amount found to be due, on a bonding
company issuing a bond that secures the payment of wages and a surety
on a bond. The limitations period of any action on a payment bond
shall be tolled pending a final order that is no longer subject to
judicial review. 
   (e) It is the intent of the Legislature to clarify existing law
and to nullify Violante v. Communities Southwest Development and
Construction Company, et al. (2006) 138 Cal.App.4th 972. 
  SEC. 3.  Section 1771.2 of the Labor Code is amended to read:
   1771.2.  (a) A joint labor-management committee established
pursuant to the federal Labor Management Cooperation Act of 1978
(Section 175a of Title 29 of the United States Code) may bring an
action in any court of competent jurisdiction against a contractor or
a subcontractor who fails to comply with the requirements of this
chapter, not later than four years after the violation. If the court
finds a violation of this chapter, it shall enjoin the violation,
award unpaid wages for distribution to employees, and award the joint
labor-management committee reasonable attorney's fees, costs, and
expenses incurred in maintaining the action.
   (b) For purposes of this section, the provisions of Section 1194.2
shall apply.
   (c) This section shall not be construed to limit other available
remedies for a violation of this chapter.
  SEC. 4.  Section 1776 of the Labor Code is amended to read:
   1776.  (a) Each contractor and subcontractor shall keep accurate
payroll records, showing the name, address, social security number,
work classification, straight time and overtime hours worked each day
and week, and the actual per diem wages paid to each journeyman,
apprentice, worker, or other employee employed by him or her in
connection with the public work. Each payroll record shall contain or
be verified by a written declaration that it is made under penalty
of perjury, stating both of the following:
   (1) The information contained in the payroll record is true and
correct.
   (2) The employer has complied with the requirements of Sections
1771, 1811, and 1815 for any work performed by his or her employees
on the public works project.
   (b) (1) The payroll records enumerated under subdivision (a) shall
be certified and shall be available for inspection at all reasonable
hours at the principal office of the contractor on the following
basis:
   (A) A certified copy of an employee's payroll record shall be made
available for inspection or furnished to the employee or his or her
authorized representative on request.
   (B) A certified copy of all payroll records enumerated in
subdivision (a) shall be made available for inspection or furnished
upon request to a representative of the body awarding the contract,
the Division of Labor Standards Enforcement, and the Division of
Apprenticeship Standards of the Department of Industrial Relations.
   (C) A certified copy of all payroll records enumerated in
subdivision (a) shall be made available upon request by the public
for inspection or for copies thereof. A request by the public shall
be made through the body awarding the contract, the Division of
Apprenticeship Standards, or the Division of Labor Standards
Enforcement, or directly to the contractor or subcontractor whose
payroll records are requested. The requesting party shall, prior to
being provided the records, reimburse the contractor's or
subcontractor's costs of copying the payroll records.
   (2) This section shall not be construed to require a contractor or
subcontractor to provide members of the general public access to the
records maintained at the principal office of the contractor or
subcontractor.
   (c) The certified payroll records shall be on forms provided by
the Division of Labor Standards Enforcement or shall contain the same
information as the forms provided by the division.  The payroll
records may consist of printouts of payroll data that are maintained
as computer records, if all of the following requirements are
satisfied:  
   (1) The printouts are in the same format as the division's forms.
 
   (2) The printouts contain the same information as the division's
forms.  
   (3) The printouts are verified in the manner specified in
subdivision (a).  
   (4) A computer program used to maintain the certified payroll
records meets both of the following requirements:  
   (A) Allows data to be entered in the certified payroll records
only if the data matches the information contained in the itemized
statements provided for in Section 226 of the Labor Code.  
   (B) Prohibits any modifications to that data after it has been
entered into the computer program. 
   (d) A contractor or subcontractor shall file a certified copy of
the records enumerated in subdivision (a) with the entity that
requested the records within 10 days after receipt of a written
request.
   (e) Any copy of records made available for inspection as copies
and furnished upon request to the public or any public agency by the
awarding body, the Division of Apprenticeship Standards, or the
Division of Labor Standards Enforcement shall be marked or
obliterated to prevent disclosure of an individual's name, address,
and social security number. The name and address of the contractor
awarded the contract or the subcontractor performing the contract
shall not be marked or obliterated. Any copy of records made
available for inspection by, or furnished to, a joint
labor-management committee established pursuant to the federal Labor
Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a) shall be
marked or obliterated only to prevent disclosure of an individual's
 name and  social security number.
   (f) The contractor shall inform the body awarding the contract of
the location of the records enumerated under subdivision (a),
including the street address, city, and county, and shall, within
five working days, provide a notice of a change of location and
address.
   (g) The contractor or subcontractor has 10 days in which to comply
subsequent to receipt of a written notice requesting the records
enumerated in subdivision (a). In the event that the contractor or
subcontractor fails to comply within the 10-day period, he or she
shall, as a penalty to the state or political subdivision on whose
behalf the contract is made or awarded, forfeit twenty-five dollars
($25) for each calendar day, or portion thereof, for each worker,
until strict compliance is effectuated. Upon the request of the
Division of Apprenticeship Standards or the Division of Labor
Standards Enforcement, these penalties shall be withheld from
progress payments then due. A contractor is not subject to a penalty
assessment pursuant to this section due to the failure of a
subcontractor to comply with this section.
   (h) The body awarding the contract shall cause to be inserted in
the contract stipulations to effectuate this section.
   (i) The director shall adopt rules consistent with the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code) and the Information
Practices Act of 1977 (Title 1.8 (commencing with Section 1798) of
Part 4 of Division 3 of the Civil Code) governing the release of
these records, including the establishment of reasonable fees to be
charged for reproducing copies of records required by this section.
  SEC. 5.  The provisions of this act are severable, and if any
provision of this act or its application is held invalid, that
invalidity shall not affect other provisions or applications that can
be given effect without the invalid provision or application.