BILL NUMBER: SB 377 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 3, 2013
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
Section 1773.5 of of,
and to add Section 1741.1 to, 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 , when a request is made to the
director for a determination of whether a specific project or type of
work awarded or under taken by a political subdivision is
a public work, 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
make that determination within 60 days of receipt of the
last support or opposition letter relating to that project or type of
work, and for projects or types of work that are otherwise private
development projects receiving public funds, within 120 days of
receipt, except as specified. The 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
120 days after the receipt of the appeal, except as specified.
This The bill would grant to the
director quasi-legislative authority to determine coverage of
projects or types of work under prevailing wage
requirements, and provide that a final determination on any appeal is
subject to judicial review. The bill would make those
determinations, and determinations relating to the general prevailing
rate of per diem wages and for holiday, shift, and overtime work,
exempt from the Administrative Procedure Act.
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,
days after the filing of a valid notice of completion in
the county where the public work was performed or within 180
days after the acceptance of the public work , except
as specified. 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.
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 toll the period for service of assessments
and for commencing an action brought by a joint labor-management
committee 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 those periods 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.
The bill would require the person filing the notice of
completion to also provide notice to the Labor Commissioner, as
specified, and would require the awarding body or political
subdivision accepting a public work to provide to the Labor
Commissioner notice of that acceptance, as specified. The bill would
toll the period for service of assessments and for commencing an
action brought by a joint labor-management committee for the length
of time notice is not provided to the Labor Commissioner.
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 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. 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. 2. Section 1741.1 is added to the
Labor Code , to read:
1741.1. (a) 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.
(b) The person filing a notice of completion in the office of a
county recorder pursuant to subdivision (a) of Section 1741 shall at
the same time also provide notice to the Labor Commissioner, in a
manner determined by the Labor Commissioner. The awarding body or
political subdivision accepting a public work under subdivision (a)
of Section 1741 shall provide notice of that acceptance to the Labor
Commissioner within five days of the acceptance, in a manner
determined by the Labor Commissioner. The 180-day period for service
of assessments shall be tolled for the length of time notice is not
given in a timely manner to the Labor Commissioner pursuant to this
subdivision.
(c) The tolling provisions in this section shall also apply to the
period of time for commencing an action brought by a joint
labor-management committee pursuant to Section 1771.2.
SEC. 5. SEC. 3. 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.
When a request is made to the director for a
determination of whether a specific project or type of work awarded
or undertaken by a political subdivision is a public work, he or she
shall make that determination within 60 days receipt of the last
notice of support or opposition from any interested party relating to
that project or type of work that was not unreasonably delayed, as
determined by the director. 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 , party , the
reasons for the extension. If the requestor is not an
awarding body a political subdivision , the
requester shall shall, within 15 days of the
request, serve a copy of the request upon the awarding
body political subdivision , in which event the
awarding body political subdivision
shall, within 15 30 days of its
receipt, advise the director of its position regarding the request.
For projects or types of work that are otherwise
private development projects receiving public funds, as specified in
subdivision (b) of Section 1720, the director shall determine whether
a specific project or type of work is a public work within 120 days
of receipt of the last notice of support or opposition
relating to that project or type of work from any interested party
that was not unreasonably delayed, as determined by the director.
(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 30 120
days after receipt of the appeal, unless he or she certifies
in writing to the party requesting the appeal the reason for
additional time, in which case the director's determination shall
issue within 60 days of the appeal. last notice of
support or opposition relating to that appeal from any interested
party that was not unreasonably delayed, as determined by the
director . The director may have up to an additional 60
days if he or she certifies in writing to the party requesting the
appeal the reason for the extension.
(d) The director shall have quasi-legislative authority to
determine coverage of projects or types of work under
the prevailing wage laws of this chapter . A final
determination on any administrative appeal is subject to
judicial review pursuant to Section 1085 of the Code of Civil
Procedure. These determinations, and any determinations relating
to the general prevailing rate of per diem wages and the general
prevailing rate for holiday, shift rate, and overtime work, shall be
exempt from the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).