BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2675|
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THIRD READING
Bill No: AB 2675
Author: Assembly Labor and Employment Committee
Amended: 4/16/12 in Assembly
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM. : 6-0, 6/13/12
AYES: Lieu, Wyland, DeSaulnier, Leno, Padilla, Yee
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR : 73-0, 5/10/12 - See last page for vote
SUBJECT : Public works: prevailing wage rates: penalty
assessment
SOURCE : Author
DIGEST : This bill specifies that upon receipt of a final
order that is no longer subject to judicial review Ŭin a
case regarding monies owed for violations with pending
civil wage and penalty assessments], the retained amounts
necessary to satisfy the final order shall be deemed
forfeited by the contractor or subcontractor.
ANALYSIS : Existing law requires that workers employed on
public works projects in California be paid the applicable
prevailing wage, as determined by the Department of
Industrial Relations. Among other things, existing law:
1. Requires that not less than the general prevailing wage
rate be paid to all workers employed on a "public works"
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project costing over $1,000 and imposes misdemeanor
penalties for a violation of this requirement.
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. (Labor Code Section 1720)
3. Defines "paid for in whole or in part out of public
funds" as, among other things, "Fees, costs, rents,
insurance or bond premiums, loans, interest rates, or
other obligations normally required in the execution of
a contract that are paid, reduced, charged at less than
fair market value, waived or forgiven." (Labor Code
Section1720)
Existing law regulating public works contracts requires the
awarding body of a public works contract to withhold and
retain all amounts required to satisfy any civil wage and
penalty assessment issued by the Labor Commissioner before
making payments to the contractor of money due under
contract. (Labor Code Section 1727)
Existing law provides that the amounts required to satisfy
a civil wage and penalty assessment shall not be disbursed
by the awarding body until receipt of a final order that is
no longer subject to judicial review. (Labor Code Section
1727)
Existing law provides that if the awarding body has not
retained sufficient money under the contract to satisfy a
civil wage and penalty assessment based on a
subcontractor's violations, the contractor shall, upon the
request of the Labor Commissioner, withhold sufficient
money due the subcontractor under the contract to satisfy
the assessment and transfer the money to the awarding body.
These amounts shall not be disbursed by the awarding body
until receipt of a final order that is no longer subject to
judicial review. (Labor Code Section 1727)
This bill specifies that upon receipt of a final order that
is no longer subject to judicial review Ŭin a case
regarding monies owed for violations with pending civil
wage and penalty assessments], the retained amounts
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necessary to satisfy the final order shall be deemed
forfeited by the contractor or subcontractor.
Comments
Prevailing wage law requires that all workers on public
works projects be paid at least the "prevailing wage" for
projects "paid for in whole or in part out of public
funds". The prevailing wage rate is the basic hourly rate
paid on public works projects 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. If the prevailing wage requirements are not met and
the contractor or subcontractor are found to be in
violation of prevailing wage law, Labor Code Section 1727
requires that, before making payments to the contractor of
money due under a contract for public work, the awarding
body withhold and retain amounts sufficient to satisfy any
civil wage and penalty assessments issued by the Labor
Commissioner for these violations. These amounts are not
to be disbursed by the awarding body until the case has
been concluded and receipt of a final order Ŭdirecting
disbursement to the appropriate entities] has been received
confirming it is no longer subject to judicial review.
According to the author's office, in order to avoid any
confusion regarding the final outcome of these retained
monies, this bill simply clarifies that once there is a
final order on the matter and the case is no longer subject
to judicial review, that the withheld amounts necessary to
cover wages and penalties owed are deemed be "forfeited" by
the contractor to make these payments.
According to the author's office, this bill makes a
technical change to the law relating to public works
clarifying that once there is a final order that is no
longer subject to judicial review, the amounts withheld by
the awarding body, per existing law, are deemed to be
forfeited.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
ASSEMBLY FLOOR : 73-0, 5/10/12
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AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mendoza, Miller, Mitchell, Monning,
Morrell, Nestande, Nielsen, Norby, Pan, Perea,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Cook, Fletcher, Furutani, Jeffries,
Mansoor, Olsen, V. Manuel Pérez
PQ:mw 6/14/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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