BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1336|
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THIRD READING
Bill No: AB 1336
Author: Frazier (D)
Amended: 6/24/13 in Senate
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-1, 6/12/13
AYES: Monning, Leno, Padilla, Yee
NOES: Wyland
SENATE JUDICIARY COMMITTEE : 4-2, 7/2/13
AYES: Corbett, Jackson, Leno, Monning
NOES: Walters, Anderson
NO VOTE RECORDED: Evans
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 49-21, 5/24/13 - See last page for vote
SUBJECT : Prevailing wages: payroll records
SOURCE : State Building and Construction Trades Council of
California
DIGEST : This bill extends the deadline from 180 days to 18
months, as specified, for the Labor Commissioner to serve a
civil wage and penalty assessment against a public work
contractor or subcontractor, or both. This bill also extends
the deadline from 180 days to 18 months, as specified, for a
joint labor-management committee to bring an action against an
employer that fails to pay the prevailing wage to its employees.
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This bill revises and recasts remedies that may be awarded by a
court in these joint labor-management committee actions. This
bill authorizes the court to award interest, liquidated damages,
and injunctive relief in these actions.
ANALYSIS : Existing law generally defines a "public work" as
construction, alteration demolition, installation, or repair
work that is done under contract and that is paid for, in whole,
or in part out of public funds.
Existing law requires contractors engaged in public works to pay
employees the prevailing wage, as determined by the Director of
the Department of Industrial Relations.
Existing law requires the Labor Commissioner to issue a civil
wage and penalty assessment against a contractor or
subcontractor, or both, if the Labor Commissioner determines,
after investigation, that the contractor or subcontractor
violated the laws regulating public works contracts. The
assessment must be served no later than 180 days after the
filing of a valid notice of completion in the office of the
county recorder in each county in which the public work or some
part thereof was performed, or no later than 180 days after
acceptance of the public work, whichever occurs last.
This bill extends the statute of limitations from 180 days to 18
months for the Labor Commissioner to serve the civil wage and
penalty assessment.
Existing law authorizes a joint labor-management committee to
bring an action against any employer who fails to pay the
prevailing wage to its employees, not later than 180 days after
the filing of a valid notice of completion in the county
recorder's office in each county in which the public work was
performed, or not later than 180 days after the acceptance of
the public work, whichever is later.
Existing law authorizes a court to 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.
This bill:
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1.Extends the statute of limitations from 180 days to 18 months
for a joint labor-management committee to bring an action
against the employer.
2.Repeals the above provision regarding restitution and
attorney's fees and costs and recast it to require the court,
in an action brought by the joint labor-management committee
against the employer, to award restitution to an employee for
unpaid wages, plus interest from the date that the wages
became due and payable, and reasonable attorney's fees and
costs incurred by the joint labor-management committee in
maintaining the action, including expert witness fees.
3.Requires the court to award liquidated damages equal to the
amount of unpaid wages owed, and authorize the court to impose
civil penalties, only against an employer that failed to pay
the prevailing wage to its employees, injunctive relief, or
any other appropriate form of equitable relief.
4.Prohibits these remedies in an action based on the employer's
misclassification of the craft of a worker in its certified
payroll records.
5.Provides that liquidated damages may be awarded only if the
complaint alleges with specificity the wages due and unpaid to
the individual workers, including how that amount was
calculated, and the defendant fails to pay the wages, deposit
that amount with the court to be held in escrow, or provide
proof to the court of an adequate surety bond to cover the
wages, within 60 days of service of the complaint.
6.Specifies that liquidated damages may be awarded only on the
wages found to be due and unpaid, and, if the defendant
demonstrates to the satisfaction of the court that the
defendant had substantial grounds for contesting that a
portion of the allegedly unpaid wages were owed, the court may
exercise its discretion to waive the payment of the liquidated
damages with respect to that portion of the unpaid wages.
Existing law requires each contractor and subcontractor on a
public works project to keep accurate payroll records showing
the name, address, social security number, work classification,
straight time and overtime hours worked each day and week, and
the actual per diem wages paid.
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Existing law requires any copies of records made available for
inspection by, or furnished to, a joint labor-management
committee established pursuant to the federal Labor Management
Cooperation Act of 1978 to be marked or obliterated only to
prevent disclosure of an individual's name and social security
number.
This bill:
1.Requires the individual's social security number to be marked
or obliterated in any copy of records made available for
inspection by, or furnished to, a joint labor-management
committee established pursuant to the federal Labor Management
Cooperation Act of 1978.
2.Requires any copy of records made available for inspection by,
or furnished to, a multiemployer Taft-Hartley trust fund that
requests the records for the purposes of allocating
contributions to participants to 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.
Comments
In 2001, the Legislature enacted SB 588 (Burton, Chapter 804,
Statutes of 2001) which authorized representatives from a
labor-management committee to inspect payroll records on public
works projects and to take civil action to enforce prevailing
wage requirements. Currently joint labor-management committees
can bring a civil action against an employer that fails to pay
the prevailing wage to its employees. However, 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. According to the author's office, while the inspection
and enforcement provided by SB 558 allows representatives from
the labor-management committee to inspect payroll records for
prevailing wage violations, the 180 requirement for bringing a
civil action can be problematic as workers are often underpaid
for years and the current statute of limitations is not
sufficient to recover lost wages.
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Additionally, current law states that an individual's name and
social security number must be redacted in payroll records. If a
civil action is successful it can be difficult to locate those
workers to award their owed wages as only the worker's address
is available under current law. If an individual changes
residences in the time frame of the civil action it could be
difficult to find them and ensure that they are properly
compensated.
AB 1336 addresses these issues by extending the deadline for
bringing a civil action to recover lost wages to two years and
allowing employee names to be included in the records provided
to a joint labor-management committee.
Prior Legislation
SB 569 (Steinberg, 2007) would have, among other things,
extended the statute of limitations for such civil actions to
four years after the violation occurs. It also would have
provided that copies of records provided to joint
labor-management committees shall be marked only to obliterate
social security numbers, but not names. This bill was held
under submission in the Assembly Appropriations Committee.
AB 581 (Klehs, 2005) would have extended the statute of
limitations to four years. This bill was held under submission
in the Senate Appropriations Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/13/13)
State Building and Construction Trades Council of California
(source)
California Labor Federation, AFL-CIO
California Professional Firefighters
California State Association of Electrical Workers
California State Pipe Trades Council
Western States Council of Sheet Metal Workers
OPPOSITION : (Verified 8/13/13)
Air Conditioning Trade Association
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Associated Builders and Contractors of California
Associated General Contractors of California
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
United Contractors
Western Electrical Contractors Association
ARGUMENTS IN SUPPORT : According to the State Building and
Construction Trades Council, the bill 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 argues 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. Proponents 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.
In addition, they state 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. They contend that many instances of wage
theft involve payroll records that do not report all the hours
an employee is actually working and that providing the names of
the employees will allow the committee to properly follow-up and
determine if the payroll records are fraudulent.
They also contend 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
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obtain this information.
ARGUMENTS IN OPPOSITION : According to opponents, the deletion
of the requirement that the civil action be commenced not later
than 180 days is unnecessary and would create an imbalance with
other enforcement provisions in the prevailing wage statutes
that require the Division of Labor Standards Enforcement to
issue a civil wage and penalty assessment within 180 days.
Further, opponents argue 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.
Opponents also argue that the provisions of the bill specifying
the civil remedies that may be pursued by joint labor-management
committees are problematic. They contend that while the courts
have long held that plaintiffs may only file suit against the
actual employer for wage claims, Labor Code Section 1775
imposes "joint and several liability" between a contractor and
subcontractor for wage claims. Opponents argue that the bill
directs courts to adhere to Section 1775 and imposes "joint and
several liability" where it did not previously exist. Opponents
express 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).
Lastly, the California Surety Federation opposes this measure
and argues that, from a surety perspective, creating a "tail of
liability" that extends out two years creates various
challenges, such as the inevitable loss of evidence over time.
The Federation contends that if there is a concern that a
significant liability may retain outstanding for up to two
years, it is possible that some sureties might not be willing to
take the risk, thereby driving up the cost of bonding and a
limited supply of sureties willing to write such business.
ASSEMBLY FLOOR : 49-21, 5/24/13
AYES: Alejo, Ammiano, Atkins, Bloom, Blumenfield, Bocanegra,
Bonilla, Bradford, Brown, Buchanan, Ian Calderon, Campos,
Chau, Chesbro, Cooley, Daly, Dickinson, Eggman, Fong, Fox,
Frazier, Garcia, Gatto, Gomez, Gordon, Hall, Roger Hernández,
Jones-Sawyer, Levine, Lowenthal, Medina, Mitchell, Mullin,
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Muratsuchi, Nazarian, Pan, Perea, V. Manuel Pérez, Quirk,
Quirk-Silva, Rendon, Salas, Stone, Ting, Weber, Wieckowski,
Williams, Yamada, John A. Pérez
NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle,
Donnelly, Beth Gaines, Gorell, Hagman, Harkey, Jones, Linder,
Logue, Maienschein, Mansoor, Melendez, Morrell, Olsen,
Patterson, Wagner
NO VOTE RECORDED: Bonta, Gray, Grove, Holden, Nestande,
Skinner, Waldron, Wilk, Vacancy, Vacancy
PQ:nl 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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