BILL ANALYSIS �
AB 1336
Page 1
Date of Hearing: April 30, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 1336 (Frazier) - As Amended: April 17, 2013
SUBJECT : Prevailing wages: ENFORCEMENT
KEY ISSUE : SHOULD A NUMBER OF CHANGES RELATED TO ENFORCEMENT OF
PREVAILING WAGE LAW BY JOINT LABOR-MANAGEMENT COMMITTEES BE
MADE?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This measure was recently approved by the Labor Committee, which
has the primary jurisdiction and expertise of the issues
presented. The bill seeks to enact various provisions of law
related to enforcement of prevailing wage law by specified
joint-labor management committees, including: 1) extending the
statute of limitations for civil actions for failure to pay
prevailing wages brought by specified joint labor-management
committees from 180 days to 24 months after the wages were due;
2) providing that in such civil actions, the court shall award
restitution to an employee for unpaid wages plus interest,
liquidated damages equal to the amount of unpaid wages owed, and
may impose specified civil penalties, injunctive relief, or any
other appropriate form of equitable relief; and 3) providing
that the court shall award a prevailing joint labor-management
committee its reasonable attorney's fees and costs incurred in
maintaining the action, including expert witness fees. The bill
is sponsored by the State Building and Construction Trades
Council of California, and is supported by a host of labor
organizations. It is opposed by a host of building contractor
and other organizations.
SUMMARY : Enacts various provisions of law related to
enforcement of prevailing wage law by specified joint-labor
management committees. Specifically, this bill , among other
things:
1)Extends the statute of limitations for civil actions for
failure to pay prevailing wages brought by specified joint
labor-management committees from 180 days to 24 months after
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the wages were due.
2)Provides that in such civil actions, the court shall award
restitution to an employee for unpaid wages plus interest,
liquidated damages equal to the amount of unpaid wages owed,
and may impose specified civil penalties, injunctive relief,
or any other appropriate form of equitable relief.
3)Provides that the court shall award a prevailing joint
labor-management committee its reasonable attorney's fees and
costs incurred in maintaining the action, including expert
witness fees.
4)Specifies that these provisions do not limit any other
available remedies for a violation of the law.
EXISTING LAW:
1)Authorizes joint labor-management committees to bring a civil
action against an employer that fails to pay the prevailing
wage to its employees. (Labor Code Section 1771.2. (a). All
further code references are to this code unless otherwise
noted.)
2)Provides that a joint labor management committee may maintain
an action in a court of competent jurisdiction against an
employer who fails to comply with the requirement to pay
prevailing wages. (Section 1776(e).)
3)Imposes specified civil penalties against a contractor or
subcontractor that fails to pay prevailing wages. However,
current law specifies that the prime contractor is not liable
for such penalties unless it had knowledge of the failure of
the subcontractor to pay prevailing wages or unless the prime
contractor failed to comply with specified requirements.
(Section 1775.)
COMMENTS : This bill largely falls within the jurisdiction of
the Labor Committee, which recently approved it. That
Committee's key expertise and analysis of the bill's provisions
largely follows, with special emphasis on the key provisions of
interest to the Judiciary Committee.
In essence, this measure proposes a number of changes related to
enforcement of prevailing wage law by joint labor-management
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committees. Joint labor-management committees are authorized
and established pursuant to the federal Labor Management
Cooperation Act of 1978. The changes proposed by this bill may
be classified into two main categories: (1) civil actions filed
by joint-labor management committees; and (2) requirements
regarding certified payroll records. Both of these issues will
be discussed in turn below.
Civil Actions Filed by Joint Labor-Management Committees . As
noted above, existing law authorizes joint labor-management
committees to bring a civil action against an employer that
fails to pay the prevailing wage to its employees. Current law
provides that such a civil action shall be commenced not later
than 180 days after the filing of a valid notice of completion
or not later than 180 days after the acceptance of the public
work, whichever occurs last. This bill would instead provide
that such civil actions shall be commenced not later than 24
months after the wages were due.
In addition, this bill specifies some of the remedies available
in such action. Existing law (at Labor Code Section 1776(e))
already provides that a joint labor management committee may
maintain an action in a court of competent jurisdiction against
an employer who fails to comply with the requirement to pay
prevailing wages. Current law provides that 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. Current law also
specifies that such an action may not be based on the employer's
misclassification of the craft of a worker on its certified
payroll record and specifies that these provisions do not limit
any other available remedies for a violation of the law.
Existing law (Labor Code Section 1775) also imposes specified
civil penalties against a contractor or subcontractor that fails
to pay prevailing wages. However, current law specifies that
the prime contractor is not liable for such penalties unless it
had knowledge of the failure of the subcontractor to pay
prevailing wages or unless the prime contractor failed to comply
with specified requirements.
This bill replicates these provisions in Labor Code Section
1771.2(c) and adds some additional provisions. Specifically,
this bill provides that in such civil actions, the court shall
award restitution to an employee for unpaid wages plus interest
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and liquidated damages equal to the amount of unpaid wages owed.
In addition, the court may impose specified civil penalties (in
accordance with Labor Code Section 1775, discussed above),
injunctive relief, or any other appropriate form of equitable
relief (emphasis provided).
The bill also provides that the court shall award a prevailing
joint labor-management committee its reasonable attorney's fees
and costs incurred in maintaining the action, including expert
witness fees (emphasis provided). The bill also provides,
consistent with existing law, that these provisions do not limit
any other available remedies for a violation of the law.
Finally, the bill specifies, consistent with existing law, that
such a civil action shall not be based merely on the employer's
misclassification of the craft of a worker in its certified
payroll records.
Prior Related Legislation : SB 569 (Steinberg) of 2007 would
have, among other things, extended the statute of limitations
for such civil actions to four years after the violation occurs.
SB 569 was held under submission in the Assembly Appropriations
Committee. Similarly, AB 581 (Klehs) of 2005 would have
extended the statute of limitations to four years. AB 581 was
held under submission in the Senate Appropriations Committee.
Access to Certified Payroll Records . Current law requires
contractor and subcontractors on public works projects to keep
accurate payroll records showing the name, address, social
security number, work classification, hours worked and wages
paid to employees. The payroll records are required to be
certified as true and correct by the contractor or
subcontractor. Certified payroll records shall be made
available for inspection upon request of the employee, the
awarding body, the Division of Labor Standards Enforcement, or
the Division of Apprenticeship Standards.
Current law also provides that copies of records made available
to the public shall be marked or obliterated to prevent
disclosure of an individual's name, address and social security
number. Existing law also provides that copies provided to
joint labor-management committees shall be marked only to
prevent disclosure of an individual's name and social security
number. This bill provides that copies of records provided to
joint labor-management committees shall be marked only to
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obliterate social security numbers, but not names.
This bill also provides that a copy of certified payroll records
provided to a multiemployer Taft-Hartley trust fund (generally a
pension or health and welfare fund) that requests the records
for the purpose of allocating contributions to participants
shall be marked or obliterated only to prevent disclosure of an
individual's full social security number, but shall provide the
last four digits of the social security number.
Prior Legislation: SB 569 (Steinberg) of 2007 would have, among
other things, provided that copies of records provided to joint
labor-management committees shall be marked only to obliterate
social security numbers, but not names. SB 569 was held under
submission in the Assembly Appropriations Committee.
ARGUMENTS IN SUPPORT : This bill is sponsored by the State
Building and Construction Trades Council of California, who
argues that it will enhance the state's enforcement efforts to
combat the underground economy, protect the public's investment
in infrastructure and protect workers from wage theft.
The sponsor states that the change in the statute of limitations
for claims will allow for adequate time for a legal remedy for
workers cheated out of wages they are owed since victims of wage
theft are underpaid for years on multiple projects and only come
forward when their employment with the contractor ends.
In addition, the sponsor states that under current law, a joint
labor-management committee that requests certified payroll
records receives them only with the workers' addresses and not
the workers' names. However, many instances of wage theft
involve payroll records that do not report all the hours an
employee is actually working. Providing the names of the
employees will allow the committee to properly follow-up and
determine if the payroll records are fraudulent.
Finally, the sponsor states that this bill will provide
Taft-Hartley trust funds with the last four digits of social
security numbers, enabling the correct allocation of health
benefits and pension contributions to workers for which the
contributions were made. The sponsor states that the redaction
of this information severely hinders this process and often
lawsuits are required to obtain this information. Many
instances of wage theft involve payroll records that do not
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report all the hours the employee is actually working and there
are occasions when the employer has gone out of business or
refuses to cooperate in an audit, so the certified payroll
records are the only practicable means for allocating benefit
contributions.
Similarly, other supporters argue that the extension of the
statute of limitations will ensure that any and all violations
result in full compensation for the employee and further
discourage an employer from attempting to go unnoticed. They
argue that this bill will help to prevent the misclassification
of workers and ensure that work is done by
appropriately-qualified skilled workers.
ARGUMENTS IN OPPOSITION : The Associated General Contractors of
California (AGC) argues that the certified payroll record
provisions of this bill threaten the privacy rights of
California workers by changing the law to allow joint
labor-management committees to obtain the names of workers and
the last four digits of their social security numbers. AGC
contends that such committees are already entitled to obtain the
addresses of these workers, and this additional information will
most certainly enable joint labor-management committee
representatives and employees to not only mail information and
questionnaires to such workers but to also visit their homes and
speak with them and their families directly. In certain
circumstances, workers may likely find such visits intrusive and
unwelcome.
The Construction Employers' Association (CEA) also opposes this
measure, raising particular concern with the provisions of the
bill specifying the civil remedies that may be pursued by joint
labor-management committees. CEA states that courts have long
held that plaintiffs may only file suit against the actual
employer for wage claims. Conversely, Labor Code Section 1775
imposes "joint and several liability" between a contractor and
subcontractor for wage claims. Because this bill directs courts
to adhere to Section 1775, CEA contends that the bill is
imposing "joint and several liability" where it did not
previously exist. Furthermore, pursuant to 1775 (b) the Labor
Commissioner may waive penalties related to a subcontractor's
violation. However, CEA expresses concern that the courts do
not have the same level of expertise as the Labor Commissioner
when it comes to certified payroll enforcement and could
potentially impose penalties that are not otherwise due pursuant
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to 1775 (b). CEA states that if the goal of this measure is to
penalize those entities who violate wage law, the bill should be
amended to speak only to those entities.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO
California State Association of Electrical Workers
California State Pipe Trades Council
State Building and Construction Trades Council of California
(sponsor)
Western States Council of Sheet Metal Workers
Opposition
Air Conditioning Trade Association
Associated Builders and Contractors of California
Associated General Contractors of California (oppose unless
amended)
California Association of Sanitation Agencies
California Chapter of the American Fence Association
California Fence Contractors' Association
California Surety Federation
Construction Employers' Association
Engineering Contractors' Association
Flasher Barricade Association
Marin Builders Association
Plumbing-Heating-Cooling Contractors Association of California
Western Electrical Contractors Association
Analysis Prepared by : Drew Liebert / JUD. / (916) 319-2334