BILL NUMBER: SB 377	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 9, 2013
	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.
   This bill would require a political subdivision that believes a
project in which it is interested, as specified, is not a public
work, 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 require the director to determine, within 60 days
of receipt of a request for a determination, except as specified,
whether a project is a public work. This bill would 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 during
the period of time 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.
  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) When a political subdivision believes that a project in which
it is interested is not a public work, 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, 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. 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 
 not later than  180 days  of the date of the
determination of a violation   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  .  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. 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 during the
period of time in which a request to determine whether a specific
project is a public work is pending before the Director of Industrial
Relations, including the period of a timely administrative appeal to
the director from that determination by an interested party, if
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. 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) The director shall determine whether a specific project is a
public work within 60 days of the receipt of 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 , 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) 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
  appeal, unless  he or she certifies in writing to
the party requesting the appeal the  reasons for the
extension   reason for additional time, in which case
the director's determination shall issue within 60 days of the appeal
.
   (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.