BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 45|
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THIRD READING
Bill No: SB 45
Author: Padilla (D)
Amended: 3/16/09
Vote: 21
SEN. LABOR & INDUSTRIAL RELATIONS COMM. : 4-0, 3/25/09
AYES: DeSaulnier, Ducheny, Leno, Yee
NO VOTE RECORDED: Wyland, Cogdill
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Prevailing wage
SOURCE : State Building and Construction Trades Council,
AFL-CIO
California State Council of Laborers
DIGEST : This bill increases the penalty on contractors
that willfully violate prevailing wage law, and thereby
permanently removes such contractors from competition with
law-abiding contractors.
ANALYSIS :
Existing Law
1.Provides that when a contractor or subcontractor
performing a public works project is found by the Labor
Commissioner to be in violation of public works law with
intent to defraud, the contractor or subcontractor or
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firm, corporation, partnership, or association in which
the contractor or subcontractor has any interest shall be
ineligible for a period of not less than one year or more
than three years to:
A. Bid on or be awarded a public works contract.
B. Perform work as a subcontractor on a public works
contract.
2.Provides that when a contractor or subcontractor
performing a public works project is found by the Labor
Commissioner to be in willful violation of public works
law, the contractor or subcontractor or firm,
corporation, partnership, or association in which the
contractor or subcontractor has any interest shall be
ineligible for a period up to three years for each second
and subsequent violation occurring within three years of
a separate and previous willful violation to:
A. Bid on or be awarded a public works contract.
B. Perform work as a subcontractor on a public works
contract.
This bill deletes the specified one-to-three year penalties
and establishes a permanent bar to contractors and
subcontractors participating in public works contracts when
found by the Labor Commissioner to have engaged in intent
to defraud or to have been in willful violation of public
works law (i.e., Labor Code Section 1720 et. seq.).
Prior Legislation
The author has introduced two bills over the last two years
to deal with the issue of misclassification. SB 622
(Padilla), 2007-08 Session, would have increased monetary
penalties for willful misclassification. This bill was
approved by the Legislature by vetoed by the Governor. SB
1490 (Padilla), 2007-08 Session, would have required
employers to notify individuals classified by employers as
independent contractors of said classification and provided
these persons with information regarding their rights.
This bill was held in the Senate Appropriations Committee.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 4/22/09)
State Building and Construction Trades Council, AFL-CIO
(co-source)
California State Council of Laborers (co-source)
California Labor Federation, AFL-CIO
American Federation of State, County and Municipal
Employees, AFL-CIO
OPPOSITION : (Verified 4/22/09)
Associated Builders and Contractors of California
ARGUMENTS IN SUPPORT : The sponsors of the bill cite a
specific violation of labor law/public works law - the
intentional misclassification of employees as independent
contractors. The author's office and supporters state that
this bill will put an end to the vicious cycle of bad
contractors who willfully violate the law from continuing
to do so. It will also help streamline the law, bring
necessary revenue into the State and protect our precious
public funds and infrastructure. The intentional and
willful misclassification of employees as independent
contractors is far too common in the construction industry,
supporters argue. Such violations hinder the state's
unemployment insurance fund workers' compensation system,
and revenue from income taxes.
AGB:cm 4/22/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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