BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 26
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 26 (Bonilla)
          As Amended  June 16, 2014
          Majority vote
           
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          |ASSEMBLY:  |     |(May 30, 2013)  |SENATE: |26-8 |(August 7,     |
          |           |     |                |        |     |2014)          |
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               (vote not relevant)
           
           Original Committee Reference:    NAT. RES.  

           SUMMARY  :  Clarifies that work performed during the  
          postconstruction phases of construction on a public works  
          project, including all cleanup work at the jobsite, is  
          considered part of the project and should be compensated at the  
          prevailing wage rate.

           The Senate amendments  delete the Assembly version of this bill  
          and instead revise the definition of "construction" for purposes  
          of public works projects to also include work performed during  
          the postconstruction phases of construction, including, but not  
          limited to, all cleanup work at the jobsite.

           EXISTING LAW  defines the term "public works" 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.  "Construction" also includes work  
          performed during the design and preconstruction phases of  
          construction, including, but not limited to, inspection and land  
          surveying work.

           AS PASSED BY THE ASSEMBLY  , this bill enacted various provisions  
          related to projects funded from the Greenhouse Gas Reductions  
          Fund and related curriculum.

           FISCAL EFFECT  :  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.

           COMMENTS  :  This bill was substantially amended in the Senate and  
          the Assembly-approved provisions of this bill were deleted.

          In a 2009 decision by the director of the Department of  
          Industrial Relations (DIR), who is responsible for making the  








                                                                  AB 26
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          prevailing wage determinations, regarding whether or not cleanup  
          work was part of the construction project and therefore subject  
          to the prevailing wage payment appears to indicate that the  
          department has deemed this work as part of the project and  
          therefore subject to prevailing wage.  (Harbor Construction Co.,  
          Inc. vs. Antelope Valley Union High School District, Case No:  
          09-0095-CPR)  In his decision, the director of DIR stated that,  
          "Contrary to Harbor's argument, the janitorial exception to  
          maintenance work has no applicability where the root obligation  
          to pay prevailing wages is found in section 1772, and 1774.  The  
          janitorial exception only applies to contracts let solely for  
          maintenance work and not to cleaning work performed as a  
          requirement of a broader public works contract." 

          Although the director's interpretation of the applicability of  
          prevailing wage requirements on clean-up work at a public works  
          project seems to address the ambiguity, there needs to be  
          clarity in the labor code to ensure consistency in its  
          applicability.  This bill would clarify that, for purposes of  
          public works projects, "construction" work also includes work  
          performed during the postconstruction phases of construction,  
          including, but not limited to, all cleanup work at the jobsite.   

               
          According to the author, prevailing wage laws were enacted to  
          ensure skilled construction workers on public works projects are  
          paid at least the wages and benefits that prevail in their local  
          communities.  Unfortunately, proponents argue, this bill is  
          necessary to address a problem that has persisted on public  
          works projects that has allowed dishonest contractors to  
          side-step prevailing wage law when it comes to the final cleanup  
          work on a public works project.  The author argues that while  
          the general prevailing wage determination includes "all final  
          cleanup of debris, grounds, and buildings near the completion of  
          the project," state law does not specify that this work is  
          included within the definition of "public works." According to  
          the author, the lack of clarity has resulted in some public  
          works employees performing cleanup work but not receiving a  
          prevailing wage for that work. 

          Further, the author contends that the discrepancy in pay  
          compromises the quality of projects and restricts workers'  
          ability to enter the middle-class.  Additionally, proponents  
          argue that the lack of conformity makes it difficult for  
          contractors who pay prevailing wages to submit competitive bids  








                                                                  AB 26
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          for public works projects.  This bill seeks to remedy this issue  
          by including work performed during the postconstruction phases  
          of construction, including, but not limited to, all cleanup work  
          at a jobsite within the definition of "public works." 


           Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091 


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