BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 377
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          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.








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          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  








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          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 


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