BILL NUMBER: SB 377 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 1, 2013
AMENDED IN SENATE APRIL 1, 2013
INTRODUCED BY Senator Lieu
FEBRUARY 20, 2013
An act to amend Sections 1726, 1741, 1771.2, and 1773.5 of the
Labor Code, relating to public works.
LEGISLATIVE COUNSEL'S DIGEST
SB 377, as amended, Lieu. Public works: project determinations:
wage and penalty assessments.
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.
Under the bill, an awarding body, that does not believe
This bill would require a political subdivision that believes
a project in which it has a legal interest
is interested, as specified, is not 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.
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.
This bill would authorize any party to request from
require the director a determination of
to determine, within 60 days of receipt of a request
for a determination, except as specified, 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 work . This bill would
authorize a party to make require an
administrative appeal of that determination to be made
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.
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. Under existing law, each contractor and
subcontractor is required to keep accurate payroll records, as
prescribed, that are certified and available for inspection, as
specified.
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.
The bill would also toll the period for the period of time that
a contractor or subcontractor fails to provide certified payroll
records pursuant to a request from the Labor Commissioner, a joint
labor-management committee, or an approved labor compliance program.
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.
This bill would toll the period for commencing an action
for during the period of time required
by the director in which a request to determine
whether a project is a public work , including the period of a
timely administrative appeal, is pending before the director ,
as specified. This bill would also toll the period for the
period of time that a contractor or subcontractor fails to
provide certified payroll records pursuant to a request from a joint
labor-management committee.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares that
the process for the Director of Industrial Relations to determine
the existence of a public work and to decide administrative appeals
from those determinations has created unacceptable delays and
prejudice to the enforcement of the public works law, often resulting
in the expiration of the statute of limitation for the
identification and collection of wage and penalty assessments. As a
result, wage theft has occurred because workers are not paid
prevailing wage rates and the time for assessment has expired.
Further, there has been an incentive to some developers, contractors,
and public bodies to engage in expensive and time-consuming
litigation in efforts to extend the time for determining the
existence of a public work. This litigation is often a needless
expense to the state. In addition, public bodies, developers,
contractors, and others are entitled to a determination of whether a
project is a public work as early as possible so that the costs of
the project and the duties of the parties under the law may be known
as early as possible. Thus, this act is necessary to ensure the
actual receipt of proper wages, to reduce administrative and
litigation costs to the state and others, and to provide early
guidance to all interested parties.
SECTION 1. SEC. 2. Section 1726 of
the Labor Code is amended to read:
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.
(d) If an awarding body When a political
subdivision believes that a project in which it
has a legal interest is interested is
not a public work, the awarding body it
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. For purposes of this section, a
political subdivision is interested in a project if it has a
proprietary interest, and not only a regulatory interest, in the
project. This notice shall be a public record. The director
shall create necessary forms and adopt regulations to implement this
subdivision.
SEC. 2. SEC. 3. Section 1741 of the
Labor Code is amended to read:
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 within 180 days of the
date of the determination of a violation. 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.
(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. The period for
service of assessments shall also be tolled for the period of time
that a contractor or subcontractor fails to provide in a timely
manner certified payroll records pursuant to a request
from the Labor Commissioner or a joint labor-management committee
under Section 1776, or an approved labor compliance program under
Section 1771.5 or 1771.7.
SEC. 3. SEC. 4. Section 1771.2 of
the Labor Code is amended to read:
1771.2. (a) 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.
(b) The period for commencing an action shall be tolled
for during the period of time required
by in which a request to determine whether a specific
project is a public work is pending before the Director of
Industrial Relations to determine whether a project is a
public work , including the period of a
determination on timely administrative appeal
to the director from that determination by an interested party
, if applicable, pursuant to subdivisions (b) and (c)
of Section 1773.5. applicable. The period for
commencing an action shall also be tolled for the period of time that
a contractor or subcontractor fails to provide in a timely manner
certified payroll records pursuant to a request from a joint
labor-management committee under Section 1776.
SEC. 4. SEC. 5. Section 1773.5 of
the Labor Code is amended to read:
1773.5. (a) 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.
(b) Any party may request from the director a
determination of The director shall determine
whether a specific project is a public work, and
the director shall make that determination work
within 60 days of the receipt of that a
request for a determination . If the director deems that
the complexity of the request requires additional time to make that
determination, the director may have up to an additional
60 days if he or she certifies in writing to the requestor, and any
interested awarding body with a legal interest in
the project , the reasons for the extension. If the
requestor is not an awarding body, the requester shall serve a copy
of the request upon the awarding body, in which event the awarding
body shall, within 15 days of its receipt, advise the director of its
position regarding the request.
(c) A party may make If
an administrative appeal of the director's determination is
made, it shall be made 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 up to an additional 60 days if he or
she certifies in writing to the party requesting the appeal the
reasons for the extension.
(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.