BILL ANALYSIS Ó SB 377 Page 1 SENATE THIRD READING SB 377 (Lieu) As Amended September 3, 2013 Majority vote SENATE VOTE :28-10 LABOR & EMPLOYMENT 5-2 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Roger Hernández, Alejo, |Ayes:|Gatto, Bocanegra, | | |Chau, Gomez, Holden | |Bradford, | | | | |Ian Calderon, Campos, | | | | |Eggman, Gomez, Hall, | | | | |Holden, Pan, Quirk, Weber | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Morrell, Gorell |Nays:|Harkey, Bigelow, | | | | |Donnelly, Linder, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Enacts various requirements related to prevailing wage determinations and related assessments. Specifically, this bill : 1)Provides that the period of service for assessments for prevailing wage violations shall be tolled for the period of time required by the Department of Industrial Relations (DIR) to determine whether a project is a public work. 2)Provides that the period of service for assessments shall also be tolled for the period of time that a contractor or subcontractor fails to provide certified payroll records in a timely manner, as specified. 3)Provides that these tolling provisions shall also apply to the period of time for commencing an action brought by a joint labor-management committee. 4)Provides that when a request is made to DIR for a determination of whether a specific project or type of work is a public work, DIR shall make that determination within 60 days of receipt of the last notice of support or opposition from any interested party. SB 377 Page 2 5)Specifies that if DIR deems that the complexity of the request requires additional time, DIR may have up to an additional 60 days, as specified. 6)Provides that for projects or types of work that are otherwise private development projects receiving public funds as specified, DIR shall make the determination within 120 days of receipt of the last notice of support or opposition from any interested party. 7)Provides that if the requestor of a determination is not a political subdivision, the requester shall, within 15 days, serve a copy of the request upon the political subdivision. In such a case the awarding body shall advise DIR of its position regarding the request within 30 days of receipt of the request. 8)Provides for an administrative appeal process, as specified. 9)Provides that DIR shall have quasi-legislative authority to determine coverage of projects or other types of work under existing prevailing wage laws and a final determination on any appeal is subject to judicial review, as specified. 10)Provides that these determinations, and any determinations relating to the general prevailing wage rate (as specified) shall be exempt from the Administrative Procedure Act. 11)Makes related findings and declarations. FISCAL EFFECT : According to the Assembly Appropriations Committee, this bill will result in annual special fund costs of $860,000 to DIR. COMMENTS : The bill enacts various provisions related to determinations of whether a specific project is a "public works" project and therefore triggers prevailing wage requirements under existing law. Supporters argue that current law lacks a sufficient notification requirement for public works projects to inform the public about whether a project is determined to be a public works. They contend that this allows an awarding body to put SB 377 Page 3 out a project for bid without a determination - resulting in the contractor to pay below the prevailing wage, depriving workers of their lawful wages. Supporters further argue that current law fails to provide a set deadline for the Labor Commissioner to serve a civil wage and penalty assessment to determine a violation. They maintain that this lack of a streamlined appellate process causes workers to have to suffer through a long waiting period before learning if there was in fact a wage violation. Supporters contend when a decision is finally granted, the long wait time often leaves workers without any options because the statute of limitations for legal action has run out - eliminating the worker's opportunity to collected the owed wages. According to the Associated Builders and Contractors of California, this bill extends the date that the Labor Commissioner can assess non-payment of prevailing wage penalties. Opponents believe this bill unreasonably extends contractor exposure to legal challenges and liability for new fines and penalties because the date actions can commence is based on when the Division of Labor Standards Enforcement makes a determination of whether or not a project is a public works. They contend that the construction industry is just beginning to recover. California also has some of the most stringent labor laws and penalties for violating those requirements. Opponents do not see a reason to increase contractor liability at this time. Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091 FN: 0002130