BILL NUMBER: SB 725 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 30, 2011
INTRODUCED BY Senator Berryhill
( Principal coauthor: Assembly Member
Grove )
FEBRUARY 18, 2011
An act to amend Section 22032 of the Public Contract
Code, relating to public contracts. Sections 1773,
1773.1, 1773.9, and 1776 of the Labor Code, relating to public works.
LEGISLATIVE COUNSEL'S DIGEST
SB 725, as amended, Berryhill. Public contracts.
Prevailing wages.
Existing law defines the term "public works" for purposes of
requirements regarding the payment of prevailing wages, the
regulation of working hours, and the securing of workers'
compensation for public works projects. Existing law further requires
that, except as specified, not less than the general prevailing rate
of per diem wages, determined by the Director of Industrial
Relations as specified, be paid to workers employed on public works
projects, and imposes misdemeanor penalties for certain violations of
this requirement.
This bill would revise the manner in which the director determines
the rate of general prevailing wages, including deleting the
requirement that he or she consider the applicable wage rates
established by collective bargaining agreements and the rates that
may have been predetermined for federal public works, and deleting
the requirement that the director consider further data from labor
organizations and employers or employer associations and concerns
where the rates do not constitute the rates actually paid in the
locality. The bill would also revise the methodology that the
director is required to use in determining the general prevailing
rate of per diem wages in the locality in which the public work is to
be performed, including deleting certain requirements, and requiring
the director to conduct a survey of the wages paid for work
performed in each locality in which the public work is to be
performed.
Existing law requires the body awarding a contract for public work
or undertaking a public work to pay holiday rates for all specified
holidays or all holidays recognized in the applicable collective
bargaining agreement, and provides that awarding bodies are not
required to specify the holidays upon which holiday rates are paid in
the contract for public work.
This bill would require the holiday rates to be paid on all
specified holidays, and would delete the authorization that they be
paid instead on those dates recognized in a collective bargaining
agreement. The bill would delete the provision stating that awarding
bodies are not required to specify holidays in the contract for
public work.
Existing law provides that per diem wages for purposes of public
works include employer payments for, among other things, specified
worker protection and assistance programs or committees, industry
advancement, collective bargaining agreements, administrative fees,
and any purposes similar to the other purposes specified for employer
payments.
This bill would delete these categories of employer payments from
per diem wages for purposes of public works.
Existing law requires, for purposes of per diem wage payments,
that the credit for employer payments be computed on an annualized
basis where the employer seeks credit for payments that are higher
for public works projects than for private construction by that
employer, except as specified. Existing law also requires a
representative of any craft, classification, or type of worker needed
to execute public works contracts to file with the Department of
Industrial Relations copies of collective bargaining agreements and
all modifications and extensions affecting per diem wages or
holidays.
This bill would delete these requirements.
This bill would make related technical, nonsubstantive changes.
The Public Contract Code provides procedures that local agencies
are required to follow when they build public works projects. When
local agencies voluntarily use the Uniform Public Construction Cost
Accounting Act, they may use their own employees for projects of
$30,000 or less, while projects of $125,000 or less require informal
procedures and those in excess of $125,000 require formal bids.
This bill would make a technical, nonsubstantive change to this
provision.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1773 of the Labor
Code is amended to read:
1773. The body awarding any contract for public work, or
otherwise undertaking any public work, shall obtain the general
prevailing rate of per diem wages and the general prevailing rate for
holiday and overtime work in the locality in which the public work
is to be performed for each craft, classification, or type of worker
needed to execute the contract from the Director of Industrial
Relations. The holidays upon which those rates shall be paid
need not be specified by the awarding body, but shall be all
holidays recognized in the applicable collective bargaining
agreement. If the prevailing rate is not based on a collectively
bargained rate, the holidays upon which the prevailing rate
shall be paid shall be as provided in Section 6700 of the Government
Code.
In determining the rates, the Director of Industrial Relations
shall ascertain and consider the applicable wage rates established by
collective bargaining agreements and the rates that may have been
predetermined for federal public works, within the locality and in
the nearest labor market area. Where the rates do not constitute the
rates actually prevailing in the locality, the director shall obtain
and consider further data from the labor organizations and employers
or employer associations concerned, including the recognized
collective bargaining representatives for the particular craft,
classification, or type of work involved. The rate fixed for each
craft, classification, or type of work shall be not less than the
prevailing rate paid in the craft, classification, or type of work.
If the director determines that the rate of prevailing wage for
any craft, classification, or type of worker is the rate established
by a collective bargaining agreement, the director may adopt that
rate by reference as provided for in the collective bargaining
agreement and that determination shall be effective for the life of
the agreement or until the director determines that another rate
should be adopted.
SEC. 2. Section 1773.1 of the Labor
Code is amended to read:
1773.1. (a) Per diem wages, when the term is used in this chapter
or in any other statute applicable to public works, shall be deemed
to include employer payments for the following:
(1) Health and welfare.
(2) Pension.
(3) Vacation.
(4) Travel.
(5) Subsistence.
(6) Apprenticeship or other training programs authorized by
Section 3093, so long as the cost of training is reasonably related
to the amount of the contributions.
(7) Worker protection and assistance programs or committees
established under the federal Labor Management Cooperation Act of
1978 (Section 175a of Title 29 of the United States Code), to the
extent that the activities of the programs or committees are directed
to the monitoring and enforcement of laws related to public works.
(8) Industry advancement and collective bargaining agreements
administrative fees, provided that these payments are required under
a collective bargaining agreement pertaining to the particular craft,
classification, or type of work within the locality or the nearest
labor market area at issue.
(9) Other purposes similar to those specified in paragraphs (1) to
(8), inclusive.
(b) Employer payments include all of the following:
(1) The rate of contribution irrevocably made by the employer to a
trustee or third person pursuant to a plan, fund, or program.
(2) The rate of actual costs to the employer reasonably
anticipated in providing benefits to workers pursuant to an
enforceable commitment to carry out a financially responsible plan or
program communicated in writing to the workers affected.
(3) Payments to the California Apprenticeship Council pursuant to
Section 1777.5.
(c) Employer payments are a credit against the obligation to pay
the general prevailing rate of per diem wages. However, no credit
shall be granted for benefits required to be provided by other state
or federal law. Credits for employer payments also shall not reduce
the obligation to pay the hourly straight time or overtime wages
found to be prevailing.
(d) The credit for employer payments shall be computed on an
annualized basis where the employer seeks credit for employer
payments that are higher for public works projects than for private
construction performed by the same employer, except where one or more
of the following occur:
(1) The employer has an enforceable obligation to make the higher
rate of payments on future private construction performed by the
employer.
(2) The higher rate of payments is required by a project labor
agreement.
(3) The payments are made to the California Apprenticeship Council
pursuant to Section 1777.5.
(4) The director determines that annualization would not serve the
purposes of this chapter.
(e) (1) For the purpose of determining those per diem wages for
contracts, the representative of any craft, classification, or type
of worker needed to execute contracts shall file with the Department
of Industrial Relations fully executed copies of the collective
bargaining agreements for the particular craft, classification, or
type of work involved. The collective bargaining agreements shall be
filed after their execution and thereafter may be taken into
consideration pursuant to Section 1773 whenever filed 30 days prior
to the call for bids. If the collective bargaining agreement has not
been formalized, a typescript of the final draft may be filed
temporarily, accompanied by a statement under penalty of perjury as
to its effective date.
(2) Where a copy of the collective bargaining agreement has
previously been filed, fully executed copies of all modifications and
extensions of the agreement that affect per diem wages or holidays
shall be filed.
(3) The failure to comply with filing requirements of this
subdivision shall not be grounds for setting aside a prevailing wage
determination if the information taken into consideration is correct.
SEC. 3. Section 1773.9 of the Labor
Code is amended to read:
1773.9. (a) The Director of Industrial Relations shall use the
methodology set forth in subdivision (b) to determine the general
prevailing rate of per diem wages in the locality in which the public
work is to be performed.
(b) The general prevailing rate of per diem wages includes all of
the following:
(1) The basic hourly wage rate being paid to a majority of
workers engaged in the particular craft, classification,
or type of work within the locality and in the nearest labor market
area , if a majority of the workers is paid at a single
rate. If no single rate is being paid to a majority of the workers,
then the single rate being paid to the greatest number of workers, or
modal rate, is prevailing. If a modal rate cannot be determined,
then the director shall establish an alternative rate, consistent
with the methodology for determining the modal rate, by considering
the appropriate collective bargaining agreements, federal rates,
rates in the nearest labor market area, or other data such as wage
survey data .
(2) Other employer payments included in per diem wages pursuant to
Section 1773.1 and as included as part of the total hourly wage rate
from which the basic hourly wage rate was derived. In the
event the total hourly wage rate does not include any employer
payments, the director shall establish a prevailing employer payment
rate by the same procedure set forth in paragraph (1).
(3) The rate for holiday and overtime work shall be those rates
specified in the collective bargaining agreement when the basic
hourly rate is based on a collective bargaining agreement rate. In
the event the basic hourly rate is not based on a collective
bargaining agreement, the rate for holidays and overtime work, if
any, included with the prevailing basic hourly rate of pay shall be
prevailing.
(c) (1) If the director determines that the general prevailing
rate of per diem wages is the rate established by a collective
bargaining agreement, and that the collective bargaining agreement
contains definite and predetermined changes during its term that will
affect the rate adopted, the director shall incorporate those
changes into the determination. Predetermined changes that are
rescinded prior to their effective date shall not be enforced.
(2) When the director determines that there is a definite and
predetermined change in the general prevailing rate of per diem wages
as described in paragraph (1), but has not published, at the time of
the effective date of the predetermined change, the allocation of
the predetermined change as between the basic hourly wage and other
employer payments included in per diem wages pursuant to Section
1773.1, a contractor or subcontractor may allocate payments of not
less than the amount of the definite and predetermined change to
either the basic hourly wage or other employer payments included in
per diem wages for up to 60 days following the director's publication
of the specific allocation of the predetermined change.
(3) When the director determines that there is a definite and
predetermined change in the general prevailing rate of per diem wages
as described in paragraph (1), but the allocation of that
predetermined change as between the basic hourly wage and other
employer payments included in per diem wages pursuant to Section
1773.1 is subsequently altered by the parties to a collective
bargaining agreement described in paragraph (1), a contractor or
subcontractor may allocate payments of not less than the amount of
the definite and predetermined change in accordance with either the
originally published allocation or the allocation as altered in the
collective bargaining agreement.
(c) In determining the general prevailing rate of per diem wages
in the locality in which the public work is to be performed, the
director shall conduct a survey of the wages paid for work performed
in each locality in which the public work is to be performed for each
craft, classification, or type of worker needed to execute the
contract, and use an average of the wage rates surveyed, weighted by
the total employed for each craft, classification, or type of work.
(d) The director shall determine the general prevailing rate of
per diem wages for journeypersons and apprentices pursuant to Section
1777.5.
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) 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:
(1) 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.
(2) 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.
(3) 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. However, a request by the
public shall be made through either the body awarding the contract,
the Division of Apprenticeship Standards, or the Division of Labor
Standards Enforcement. If the requested payroll records have not been
provided pursuant to paragraph (2), the requesting party shall,
prior to being provided the records, reimburse the costs of
preparation by the contractor, subcontractors, and the entity through
which the request was made. The public may not be given access to
the records at the principal office of the contractor.
(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 the printouts contain the same information as
the forms provided by the division and the printouts are verified in
the manner specified in subdivision (a).
(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 , address, and social security number. A
joint labor management committee may maintain an action in a court of
competent jurisdiction against an employer who fails to comply with
Section 1774. The court may award restitution to an employee for
unpaid wages and may award the joint labor management committee
reasonable attorney's fees and costs incurred in maintaining the
action. An action under this subdivision may not be based on the
employer's misclassification of the craft of a worker on its
certified payroll records. Nothing in this subdivision limits any
other available remedies for a violation of this chapter.
(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.
SECTION 1. Section 22032 of the Public Contract
Code is amended to read:
22032. (a) Public projects of thirty thousand dollars ($30,000)
or less may be performed by the employees of a public agency by force
account, by negotiated contract, or by purchase order.
(b) Public projects of one hundred twenty-five thousand dollars
($125,000) or less may be let to contract by the informal procedures
set forth in this article.
(c) Public projects of more than one hundred twenty-five thousand
dollars ($125,000) shall, except as otherwise provided in this
article, be let to contract by formal bidding procedure.