BILL ANALYSIS                                                                                                                                                                                                    ”



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          ASSEMBLY THIRD READING
          AB 1336 (Frazier)
          As Amended  April 17, 2013
          Majority vote 

           LABOR & EMPLOYMENT         5-2  JUDICIARY                  7-3  
           
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          |Ayes:|Roger HernŠndez, Alejo,   |Ayes:|Wieckowski, Alejo, Chau,  |
          |     |Chau, Gomez, Holden       |     |Dickinson, Garcia,        |
          |     |                          |     |Muratsuchi, Stone         |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Morrell, Gorell           |Nays:|Wagner, Gorell,           |
          |     |                          |     |Maienschein               |
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           APPROPRIATIONS          12-5                                    
           
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          |Ayes:|Gatto, Bocanegra,         |     |                          |
          |     |Bradford,                 |     |                          |
          |     |Ian Calderon, Campos,     |     |                          |
          |     |Eggman, Gomez, Hall,      |     |                          |
          |     |Rendon, Pan, Quirk, Weber |     |                          |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Harkey, Bigelow,          |     |                          |
          |     |Donnelly, Linder, Wagner  |     |                          |
          |     |                          |     |                          |
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           SUMMARY  :  Enacts various provisions of law related to  
          enforcement of prevailing wage law by specified joint-labor  
          management committees.  Specifically,  this bill  :  

          1)Extends the statute of limitations for civil actions for  
            failure to pay prevailing wage brought by specified joint  
            labor-management committees from 180 days to 24 months after  
            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.









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          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 such a civil action shall not be based on the  
            employer's misclassification of the craft of a worker in its  
            certified payroll records.

          5)Specifies that these provisions do not limit any other  
            available remedies for a violation of the law.

          6)Provides that a copy certified payroll records provided to a  
            joint labor-management committee shall be marked or  
            obliterated on to prevent disclosure of an individual's social  
            security number (but not their name).

          7)Provides that a copy of certified payroll records provided to  
            a multiemployer Taft-Hartley trust 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. 

           FISCAL EFFECT  :   According to the Assembly Appropriations  
          Committee, this bill will result in minimal fiscal impact to the  
          Department of Industrial Relations.

           COMMENTS  :  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  








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          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  
          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.
           
           The Associated General Contractors of California (AGC) opposes  
          this bill unless amended.  Primarily, AGC argues deleting the  
          requirement that the civil action be commenced not later than  
          180 days after acceptance of the public work, or the filing of a  
          valid notice of completion, whichever is later, is unnecessary  
          and would create an imbalance with other enforcement provisions  
          in the prevailing wage statutes that require the Division of  
          Labor Standards Enforcement (DLSE) to issue a civil wage and  
          penalty assessment within 180 days of the events described  
          above.  AGC argues that DLSE regularly and routinely issues such  
          assessments within the proscribed 180 day period, and there is  
          no legitimate basis for creating a different period of time for  
          joint labor-management committees.  

          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  








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          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  
          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.  
           

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


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