BILL ANALYSIS Ó
SB 377
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Date of Hearing: August 21, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 377 (Lieu) - As Amended: May 9, 2013
Policy Committee: Labor and
Employment Vote: 5-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes the following requirements regarding
prevailing wage determinations:
1)Requires a political subdivision, when it believes a project
it is interested in, as defined, is not a public work, to
notify the Director of Industrial Relations (Director), the
Labor Commissioner (LC), and any person who asked for a
notice, within 30 days of the beginning of any work estimated
to last six months or more, as specified. Further requires
the Director to create necessary forms and adopt regulations
to implement this requirement.
2)Requires the Director to determine whether a specific project
is a public work within 60 days of the request. Authorizes
the Director to have an additional 60 days to make the
determination if he or she certifies in writing to the
requestor and any interested awarding body the reasons for the
extension.
3)Requires an administrative appeal of the Director's
determination on whether a project is a public work to be made
within 30 days of the date of the determination. Further
requires the Director to issue a determination on the appeal
within 30 days after receiving the appeal, unless he or she
certifies additional time is needed, as specified.
4)Deems the Director to have quasi-legislative authority to
determine coverage of projects under the prevailing wage laws.
Further specifies a final determination of any appeal is
subject to judicial review.
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5)Requires the period for service assessments to be tolled for
the period of time it takes for the Director to determine
whether a project is a public work, including an
administrative appeal, as specified.
6)Requires the period for service assessments to be tolled for
the period of time a contractor or subcontractor fails to
provide certified payroll records pursuant to a request from
the LC or a joint-labor management committee or an approved
labor compliance program.
FISCAL EFFECT
Annual special fund costs of $860,000, to the Department of
Industrial Relations (DIR) to hire additional staff to make
public work determinations, including any appeals, and develop
infrastructure to meet the notification and response
requirements of this measure. Of this cost, approximately
$230,000 (special funds) would be one-time.
COMMENTS
1)Background . Existing law requires the prevailing wage rate to
be paid to workers on public works projects over $1,000.
Statute defines public works as construction, alteration,
demolition, installation, or repair work done under contract
and paid for in whole or in part out of public funds, except
work done directly by any public utility company, as
specified.
Statute also requires the LC, within reasonable promptness and
after an investigation, issue a civil wage and penalty
assessment to a contractor if the LC determined the contractor
violated prevailing wage requirements for a public work
project. The assessment is required to be served no later
than 180 days after the filing the notice of completion with
the county recorder in each county in which the public work
project was performed, as specified.
2)Rationale . According to the author, "Current law does not
provide adequate notification requirements for public works
projects. Currently, a city can put out a project for bid
without determining its eligibility as a public works project,
causing the contractor with the winning bid to pay below the
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prevailing wage, depriving the workers of their lawful wages.
"Additionally, current law does not mandate when DIR must
respond to a public works determination request. However,
current law does require wage claims to be filed within 180
days upon completion of the project. It is becoming
increasingly frequent for DIR to issue its determination after
the 180 days has expired, thereby leaving workers unable to
recover back pay or hold the contractors and awarding agencies
liable for wage violations."
This bill shortens the length of time for the Director to make
prevailing wage determinations and establishes notification
requirements, as specified.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081