BILL ANALYSIS Ó AB 1336 Page 1 ASSEMBLY THIRD READING AB 1336 (Frazier) As Amended April 17, 2013 Majority vote LABOR & EMPLOYMENT 5-2 JUDICIARY 7-3 ----------------------------------------------------------------- |Ayes:|Roger Hernández, Alejo, |Ayes:|Wieckowski, Alejo, Chau, | | |Chau, Gomez, Holden | |Dickinson, Garcia, | | | | |Muratsuchi, Stone | |-----+--------------------------+-----+--------------------------| |Nays:|Morrell, Gorell |Nays:|Wagner, Gorell, | | | | |Maienschein | ----------------------------------------------------------------- APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Gatto, Bocanegra, | | | | |Bradford, | | | | |Ian Calderon, Campos, | | | | |Eggman, Gomez, Hall, | | | | |Rendon, Pan, Quirk, Weber | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Harkey, Bigelow, | | | | |Donnelly, Linder, Wagner | | | | | | | | ----------------------------------------------------------------- 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. AB 1336 Page 2 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 AB 1336 Page 3 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 AB 1336 Page 4 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 FN: 0000564