Amended in Senate April 1, 2013

Senate Bill No. 377

Introduced by Senator Lieu

February 20, 2013

An act to amend begin delete Section 139.43 end delete begin insert Sections 1726, 1741, 1771.2, and 1773.5 end insert of the Labor Code, relating to begin delete workers’ compensation end delete begin insert public works end insert .

LEGISLATIVE COUNSEL’S DIGEST

SB 377, as amended, Lieu. begin delete Workers’ compensation. end delete begin insert Public works: project determinations: wage and penalty assessments. end insert

begin insert

Existing law defines the term “public works” for purposes of requirements regarding the payment of prevailing wages, the regulation of working hours, and the securing of workers’ compensation for public works projects. Under existing law, the body awarding the contract for a public work is required to report any suspected violations of requirements relating to public works projects to the Labor Commissioner.

end insert begin insert

Under the bill, an awarding body, that does not believe a project in which it has a legal interest is a public work, is required to provide notice, as specified, to the Director of Industrial Relations, the Labor Commissioner, and any other person who requests that notice.

end insert begin insert

Existing law authorizes the Director of Industrial Relations to establish rules and regulations for the purpose of carrying out public works requirements, including, but not limited to, the responsibilities and duties of awarding bodies relating to public works projects.

end insert begin insert

This bill would authorize any party to request from the director a determination of whether a project is a public work, and would require the director to make that determination within 60 days of the receipt of that request, except as specified. This bill would authorize a party to make an administrative appeal of that determination within 30 days of the date of the determination, and would require the director to issue a determination on an appeal within 30 days after the receipt of the appeal, except as specified. This bill would grant to the director quasi-legislative authority to determine coverage of projects under prevailing wage requirements, and provide that a final determination on any appeal is subject to judicial review.

end insert begin insert

Existing law requires the Labor Commissioner to issue a civil wage and penalty assessment to a contractor or subcontractor, or both, if, after an investigation, the commissioner determines there has been a violation of the laws regulating public works projects, including the payment of prevailing wages. The assessment is required to be served within 180 days, with exceptions, after the filing of a valid notice of completion in the county where the public work was performed, as specified.

end insert begin insert

This bill would require the assessment to be served within 180 days of the date of the determination of the violation. This bill would toll the period for service of assessments for the period of time required by the Director of Industrial Relations to make a determination of whether the project is a public work, as specified.

end insert begin insert

Existing law authorizes a joint labor-management committee, established pursuant to a specified provision of federal law, to bring an action against any employer who fails to pay prevailing wages as required by state law. The action is required to commence not later than 180 days after the filing of a valid notice of completion in the county where the public work was performed or not later than 180 days after acceptance of the public work, whichever occurs later.

end insert begin insert

This bill would toll the period for commencing an action for the period of time required by the director to determine whether a project is a public work, as specified.

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Existing law prohibits a person or entity, other than physicians or attorneys, from advertising, printing, displaying, publishing, distributing, or broadcasting in any manner a statement concerning services or benefits to be provided to an injured worker that is paid for by that person or entity that is false, misleading, or deceptive. Violation of these provisions is a misdemeanor punishable by incarceration in the county jail for not more than one year, or by a fine not exceeding $10,000, or both.

end delete begin delete

This bill would make a technical, nonsubstantive change to these provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 1726 of the end insert begin insert Labor Code end insert begin insert is amended to
read: end insert

1726.  

(a) The body awarding the contract for public work shall
take cognizance of violations of this chapter committed in the
course of the execution of the contract, and shall promptly report
any suspected violations to the Labor Commissioner.

(b) If the awarding body determines as a result of its own
investigation that there has been a violation of this chapter and
withholds contract payments, the procedures in Section 1771.6
shall be followed.

(c) A contractor may bring an action in a court of competent
jurisdiction to recover from an awarding body the difference
between the wages actually paid to an employee and the wages
that were required to be paid to an employee under this chapter,
any penalties required to be paid under this chapter, and costs and
attorney’s fees related to this action, if either of the following is
true:

(1) The awarding body previously affirmatively represented to
the contractor in writing, in the call for bids, or otherwise, that the
work to be covered by the bid or contract was not a “public work,”
as defined in this chapter.

(2) The awarding body received actual written notice from the
Department of Industrial Relations that the work to be covered by
the bid or contract is a “public work,” as defined in this chapter,
and failed to disclose that information to the contractor before the
bid opening or awarding of the contract.

begin insert

(d) If an awarding body believes that a project in which it has
a legal interest is not a public work, the awarding body shall notify
the Director of Industrial Relations, the Labor Commissioner, and
any person who has asked for that notice, together with the reason
therefor, not less than within 30 days of the commencement of any
work estimated to last six months or more, and before the
commencement of any work if a project is not estimated to exceed
six months. This notice shall be a public record. The director shall
create necessary forms and adopt regulations to implement this
subdivision.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 1741 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

1741.  

(a) If the Labor Commissioner or his or her designee
determines after an investigation that there has been a violation of
this chapter, the Labor Commissioner shall with reasonable
promptness issue a civil wage and penalty assessment to the
contractor or subcontractor or both. The assessment shall be in
writing and shall describe the nature of the violation and the
amount of wages, penalties, and forfeitures due and shall include
the basis for the assessment. The assessment shall be served begin delete not
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 not later than
180 days after acceptance of the public work, whichever occurs
last. However, if the assessment is served after the expiration of
this 180-day period, but before the expiration of an additional 180
days, and the awarding body has not yet made full payment to the
contractor, the assessment is valid up to the amount of the funds
retained end delete begin insert within 180 days of the date of the determination of a
violation end insert . Service of the assessment shall be completed pursuant
to Section 1013 of the Code of Civil Procedure by first-class and
certified mail to the contractor, subcontractor, and awarding body.
The assessment shall advise the contractor and subcontractor of
the procedure for obtaining review of the assessment. The Labor
Commissioner shall, to the extent practicable, ascertain the identity
of any bonding company issuing a bond that secures the payment
of wages covered by the assessment and any surety on a bond, and
shall serve a copy of the assessment by certified mail to the bonding
company or surety at the same time service is made to the
contractor, subcontractor, and awarding body. However, no
bonding company or surety shall be relieved of its responsibilities
because it failed to receive notice from the Labor Commissioner.

(b) Interest shall accrue on all due and unpaid wages at the rate
described in subdivision (b) of Section 3289 of the Civil Code.
The interest shall accrue from the date that the wages were due
and payable, as provided in Part 7 (commencing with Section
1720) of Division 2, until the wages are paid.

(c) (1) The Labor Commissioner shall maintain a public list of
the names of each contractor and subcontractor who has been found
to have committed a willful violation of Section 1775 or to whom
a final order, which is no longer subject to judicial review, has
been issued.

(2) The list shall include the date of each assessment, the amount
of wages and penalties assessed, and the amount collected.

(3) The list shall be updated at least quarterly, and the
contractor’s or subcontractor’s name shall remain on that list until
the assessment is satisfied, or for a period of three years beginning
from the date of the issuance of the assessment, whichever is later.

begin insert

(d) The period for service of assessments shall be tolled for the
period of time required by the Director of Industrial Relations to
determine whether a project is a public work, including a
determination on administrative appeal, if applicable, pursuant
to subdivisions (b) and (c) of Section 1773.5.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 1771.2 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

1771.2.  

begin insert (a) end insert begin insert   end insert A joint labor-management committee established
pursuant to the federal Labor Management Cooperation Act of
1978 (Section 175a of Title 29 of the United States Code) may
bring an action in any court of competent jurisdiction against an
employer that fails to pay the prevailing wage to its employees,
as required by this article. This action shall be commenced not
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 not later than
180 days after acceptance of the public work, whichever last
occurs.

begin insert

(b) The period for commencing an action shall be tolled for the
period of time required by the Director of Industrial Relations to
determine whether a project is a public work, including a
determination on administrative appeal, if applicable, pursuant
to subdivisions (b) and (c) of Section 1773.5.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 1773.5 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

1773.5.  

begin insert (a) end insert begin insert   end insert The Director of Industrial Relations may establish
rules and regulations for the purpose of carrying out this chapter,
including, but not limited to, the responsibilities and duties of
awarding bodies under this chapter.

begin insert

(b) Any party may request from the director a determination of
whether a project is a public work, and the director shall make
that determination within 60 days of the receipt of that request. If
the director deems that the complexity of the request requires
additional time to make that determination, the director may have
an additional 60 days if he or she certifies in writing to the
requestor, and any awarding body with a legal interest in the
project, the reasons for the extension.

end insert begin insert

(c) A party may make an administrative appeal of the director’s
determination within 30 days of the date of the determination. The
director shall issue a determination on the administrative appeal
within 30 days after receipt of the appeal. The director may have
an additional 60 days if he or she certifies in writing to the party
requesting the appeal the reasons for the extension.

end insert begin insert

(d) The director shall have quasi-legislative authority to
determine coverage of projects under prevailing wage laws. A
final determination on any appeal is subject to judicial review
pursuant to Section 1085 of the Code of Civil Procedure.

end insert

begin delete

SECTION 1.  

Section 139.43 of the Labor Code is amended to
read:

139.43.  

(a) A person or entity shall not advertise, print, display,
publish, distribute, or broadcast, or cause or permit to be advertised,
printed, displayed, published, distributed, or broadcast in any
manner, a statement concerning services or benefits to be provided
to an injured worker that is paid for directly or indirectly by that
person or entity and is false, misleading, or deceptive, or that omits
material information necessary to make the statement therein not
false, misleading, or deceptive.

(b) As soon as reasonably possible, but not later than January
1, 1994, the administrative director shall adopt regulations
governing advertising by persons or entities other than physicians
and attorneys with respect to services or benefits for injured
workers. In promulgating regulations pursuant to this subdivision,
the administrative director shall review existing regulations,
including those adopted by the State Bar, to identify those
regulatory approaches that may serve as a model for regulations
required by this subdivision.

(c) A violation of subdivision (a) is a misdemeanor, punishable
by incarceration in the county jail for not more than one year, or
by a fine not exceeding ten thousand dollars ($10,000), or both.

(d) This section shall not apply to physicians or attorneys. It is
the intent of the Legislature to exempt physicians and attorneys
from this section because the conduct regulated by this section,
with respect to physicians and attorneys, is governed by other
provisions of law.

end delete