BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 1140 (Daly) - Public Works: Prevailing Wages
          
          Amended: May 24, 2013           Policy Vote: L&IR 3-1
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                           
          Consultant: Robert Ingenito     
          
          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill Summary: AB 1140 would require projects awarded or noticed  
          for bid beginning on January 1st, 2014 to be subject to  
          prevailing wage adjustments, as specified. 

          Fiscal Impact: The Department of Industrial Relations (DIR)  
          estimates that it would require $125,000 (special funds) and one  
          position to implement the provisions of the bill. Additionally,  
          to the extent that the bill's provisions result in an increase  
          in the prevailing wage rate, state government contract costs  
          could rise.

          Background: DIR enforces prevailing wage law in the State;  
          toward that end, it makes public works coverage determinations  
          on request, issuing letter decisions stating whether a given  
          project or type of work is subject to prevailing wages and often  
          defends those decisions in court. 

          Current law requires the prevailing wage rate to be paid to  
          workers on public works projects over $1,000.  Statute defines  
          public works as construction, alteration, demolition,  
          installation, or repair work done under contract and paid for in  
          whole or in part out of public funds, except work done directly  
          by any public utility company, as specified.

          California's 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 a majority of  
          such workers are paid at a single rate).  If there is no single  
          rate paid to a majority, the single or modal rate being paid to  
          the greater number of workers is prevailing.  The prevailing  








          AB 1140 (Daly)
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          wage is determined by DIR in written determinations issued  
          annually on February 22 and August 22.

          DIR's Division of Labor Standards Enforcement (DLSE) enforces  
          the prevailing wage laws and imposes penalties for violations.  
          Using research by Office of Policy, Research and Legislation,  
          the Director publishes general prevailing wage determinations in  
          the 58 counties for a variety of job classifications engaged in  
          public works. Included in these determinations are employer  
          payments for a variety of benefits including Health & Welfare,  
          Pension, Travel and Subsistence, Apprenticeship, and sums for  
          Industry Advancement and Enforcement.

          Proposed Law: This bill would, among other things, do the  
          following:

                 Require if during any semiannual period DIR determines  
               there has been a change in any prevailing wage rate, the  
               new rate applies on its effective date to any contract that  
               is awarded or for which a bid notice is published on or  
               after January 1, 2014.  

                 Authorize any contractor, awarding body, or  
               representative of any craft, classification, or type of  
               work affected by a change in rates on a particular contract  
               to file a verified petition with DIR (within 20 days after  
               the new wage determination) for the purpose of reviewing  
               the determination, as specified.  Further requires the  
               petition to be filed with the awarding body within two  
               days.

                 Require DIR to initiate an investigation or hold a  
               hearing upon filing of a petition.  This measure further  
               requires DIR to make a determination on the investigation  
               or the hearing within 20 days after the filing of the  
               petition (or a longer time period if all interested parties  
               agree).
               
                 State that a determination issued by the director is  
               effective 10 days after its issuance. The Director shall  
               include an issue date on the determination. The  
               determination shall remain in effect until it is modified,  
               rescinded, or superseded by the director.









          AB 1140 (Daly)
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          Staff Comments: This bill seeks to determine what prevailing  
          wage rate applies when there has been a change in the rate  
          during the course of a public works project. The additional  
          position identified by DIR would accommodate increased workload  
          related to reviewing collecting bargaining agreements in an  
          accelerated timeframe when a wage determination is made.