BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: March 27, 2011 2011-2012 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: SB 362
Author: Berryhill
Version: As Amended April 4, 2011
SUBJECT
Employment: apprenticeships.
KEY ISSUE
Should the Legislature remove the "needs-based" conditions for
the creation of an apprenticeship program?
PURPOSE
To remove the "needs-based" conditions for the creation of an
apprenticeship program, and increase the amount of penalties a
contractor or subcontractor is required to pay if he or she
fails to employ the legally-required number of apprentices.
ANALYSIS
Existing law provides a framework for promoting and developing
apprenticeship training through the California Apprenticeship
Council (CAC) and the Division of Apprenticeship Standards (DAS)
within the Department of Industrial Relations (DIR). DAS
enforces apprenticeship standards for, among other things,
working conditions, classroom instruction and the specific
skills required for state certification as a journeyperson in an
apprentice occupation.
Existing law requires that all apprenticeship programs be
approved by the Chief of the Division of Apprenticeship
Standards. Existing law empowers the Chief to approve
apprenticeship programs in any trade anywhere in the state,
including cities and trade areas, if the apprentice training
needs justify the creation of a program. However, in order for
the Chief to approve an apprenticeship program in the building
and construction trades, any of the following "needs-based"
conditions must be met:
1) There is no existing apprenticeship program serving the
same craft or trade and geographic area;
2) Existing apprenticeship programs that serve the same
craft or trade and geographic area do not have the
capacity, or neglect or refuse, to dispatch sufficient
apprentices to qualified employers at a public works site
who are willing to abide by the applicable apprenticeship
standards;
3) Existing apprenticeship programs approved under this
chapter that serve the same trade and geographic area have
been identified by the California Apprenticeship Council as
deficient in meeting their obligations.
(Labor Code §3075)
Existing law requires that, for public works projects in excess
of $30,000, the contractor utilize apprentices for
apprenticeable crafts or trades and that, prior to commencing
work, existing law the contractor and may apply to any
apprenticeship program in the craft or trade that can provide
apprentices to the site of the public work. The apprenticeship
program or programs, upon approving the contractor, must arrange
for the dispatch of apprentices to the contractor. (Labor Code
§1777.5)
Existing law requires the ratio of work performed by apprentices
to journeymen employed in a particular craft or trade on the
public work may be no less than the ratio of one hour of
apprentice work for five hours of journeyman work , and no higher
than the ratio stipulated in the apprenticeship standards under
which the apprenticeship program operates. (Labor Code §1777.5)
Existing law requires that when the Chief of the Division of
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Senate Committee on Labor and Industrial Relations
Apprenticeship Standards finds that when a contractor or
subcontractor knowingly violated laws requiring apprentices at
public works projects, he or she must forfeit a penalty of not
more than $100 for each day he or she fails to comply with the
law for the first violation, or a penalty of not more than $300
per day for subsequent violations. (Labor Code §1777.7)
Existing law provides that the Chief also has the authority to
reduce the penalty if it is disproportionate to the violation,
as well as allow a first-time offender, with the consent of the
apprenticeship program, to provide apprentice employment
equivalent to the work hours that provided to apprentices in
lieu of the penalty. (Labor Code §1777.7)
This bill would create an additional penalty to the penalty
discussed above if the penalty is due to a contractor or
subcontractor failing to employ an apprentice. This penalty
would be equal to the amount of wages that would have been paid
if the contractor or subcontractor had hired the appropriate
number of apprentices.
This bill would also eliminate the "needs-based" conditions for
approving an apprenticeship program in the building and
construction trades.
COMMENTS
1. Legislative Background:
In 1999, AB 921 (Keeley) included, among other things, the
"needs-based" conditions for the building and construction
trades, which make up 79% of all of the apprentices in the
state of California. Since then, the "needs-based"
apprenticeship certification requirements have been quite
controversial, and eventually led to the decision of the Bush
Administration to derecognize California's apprenticeship
programs in January of 2007.
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Senate Committee on Labor and Industrial Relations
The crux of the federal governments complaint is Labor Code
§3075(b), which set the conditions for how the Chief of
Division of Apprenticeship Standards (DAS) adjudicates the
need for the program. This bill strikes the "needs-based"
conditions which led the federal government to derecognize of
California's apprenticeship system, but also eliminates the
language of needs-based discretion for the approval of
apprenticeship standards, which, while reworded, has been in
code since 1939.
This bill also significantly increases penalties on
contractors and subcontractors for failing to hire the
legally-required number of apprentices, which has the
potential to increase compliance with the law.
2. Proponent Arguments :
The sponsor of the measure, the Associated Builders and
Contractors of California (ABC), argues that the existing
"needs-based" test creates significant challenges for the
creation of non-union apprenticeship programs. ABC argues
that the "needs-based" test blocks the creation and expansion
of new apprenticeship programs, as a union apprenticeship
program is already present, and ABC believes that since the
area has the capacity for another apprenticeship program,
additional programs should be allowed. ABC also notes that
the penalty provisions will ensure great compliance with
apprenticeship laws.
3. Opponent Arguments :
Opponents of this measure note that the existing
apprenticeship approval process helps to prevent fraud and
ensure that the existing apprenticeship programs are
legitimate. Opponents argue that dropping the "needs-based"
test will minimize those efforts, which is dangerous in these
economic times. Opponents further argue that the existing
apprenticeship system works well, with California's joint
labor-management apprenticeship programs graduating high rates
of workers and making up 95% of all the women and nearly 90%
of all minorities that are apprentices. Opponents also argue
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that non-union apprenticeship programs have much lower
graduation rates, which fails to create real job opportunities
and a career.
4. Prior Legislation :
SB 56 (Corbett) of 2011 was heard by this Committee in March
and addressed auditing requirements of apprenticeship
programs. SB 56 is currently on the Senate Floor.
AB 734 (Evans) of 2008 contained similar language to SB 56,
but also removed the "needs-based" prior to the version passed
off the Senate Floor (As Amended June 23, 2008). AB 734 was
vetoed by Governor Schwarzenegger.
SUPPORT
Associated Builders and Contractors of California (Sponsor)
OPPOSITION
California Building and Construction Trades Council
California Labor Federation, AFL-CIO
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Senate Committee on Labor and Industrial Relations