Amended in Senate April 15, 2013

Senate Bill No. 776

Introduced by Senator Corbett

February 22, 2013

An act to amend Section 1773.1 of the Labor Code, relating to public works.

LEGISLATIVE COUNSEL’S DIGEST

SB 776, as amended, Corbett. Public works: prevailing wage rates: employer payment credits.

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. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages, determined by the Director of Industrial Relations as specified, be paid to workers employed on public works projects, and imposes misdemeanor penalties for certain violations of this requirement.

Under the law, employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages, except credit is not granted for benefits required under state or federal law. Employer payments include the rate of contribution made by the employer to a trustee or 3rd person pursuant to a plan, fund, or program, the rate of actual costs to the employer anticipated in providing benefits to workers pursuant to a specified enforceable commitment, and payments to the California Apprenticeship Council.

This bill would provide that an employer may take credit for those specified employer payments, even if those payments are not made during the same pay period for which credit is taken, if the employer regularly makes those payments on no less than a quarterly basis. This bill would prohibit credit from being granted for employer payments made to monitor and enforce laws related to public works if those payments are not required by a collective bargaining agreement.

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Existing law requires that credit for employer payments be computed on an annualized basis when the employer seeks credit for payments that are higher for public works projects than for private construction by that employer, with exceptions, including if the director determines that annualization would not serve a specified purpose.

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This bill would prohibit that exception from applying to payments to a supplemental unemployment benefits plan or to a qualified cash or deferred arrangement, as described.

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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.  

Section 1773.1 of the Labor Code is amended to
read:

1773.1.  

(a) Per diem wages, as the term is used in this chapter
or in any other statute applicable to public works, includes
employer payments for the following:

(1) Health and welfare.

(2) Pension.

(3) Vacation.

(4) Travel.

(5) Subsistence.

(6) Apprenticeship or other training programs authorized by
Section 3093, to the extent that the cost of training is reasonably
related to the amount of the contributions.

(7) Worker protection and assistance programs or committees
established under the federal Labor Management Cooperation Act
of 1978 (Section 175a of Title 29 of the United States Code), to
the extent that the activities of the programs or committees are
directed to the monitoring and enforcement of laws related to
public works.

(8) Industry advancement and collective bargaining agreements
administrative fees, provided that these payments are required
under a collective bargaining agreement pertaining to the particular
craft, classification, or type of work within the locality or the
nearest labor market area at issue.

(9) Other purposes similar to those specified in paragraphs (1)
to (8), inclusive.

(b) Employer payments include all of the following:

(1) The rate of contribution irrevocably made by the employer
to a trustee or third person pursuant to a plan, fund, or program.

(2) The rate of actual costs to the employer reasonably
anticipated in providing benefits to workers pursuant to an
enforceable commitment to carry out a financially responsible plan
or program communicated in writing to the workers affected.

(3) Payments to the California Apprenticeship Council pursuant
to Section 1777.5.

(c) Employer payments are a credit against the obligation to
pay the general prevailing rate of per diem wages. However, credit
shall not be granted for benefits required to be provided by other
state or federal law, or for payments made to monitor and enforce
laws related to public works if those payments are not made to a
program or committee established under the federal Labor
Management Cooperation Act of 1978 (Section 175a of Title 29
of the United States Code). Credits for employer payments also
shall not reduce the obligation to pay the hourly straight time or
overtime wages found to be prevailing. However, an increased
employer payment contribution that results in a lower hourly
straight time or overtime wage shall not be considered a violation
of the applicable prevailing wage determination if all of following
conditions are met:

(1) The increased employer payment is made pursuant to criteria
set forth in a collective bargaining agreement.

(2) The basic hourly rate and increased employer payment are
no less than the general prevailing rate of per diem wages and the
general prevailing rate for holiday and overtime work in the
director’s general prevailing wage determination.

(3) The employer payment contribution is irrevocable unless
made in error.

(d) An employer may take credit for an employer payment
specified in subdivision (b), even if contributions are not made,
or costs are not paid, during the same pay period for which credit
is taken, if the employer regularly makes the contributions, or
regularly pays the costs, for the plan, fund, or program on no less
than a quarterly basis.

(e) The credit for employer payments shall be computed on an
annualized basis when the employer seeks credit for employer
payments that are higher for public works projects than for private
construction performed by the same employer, unless one or more
of the following occur:

(1) The employer has an enforceable obligation to make the
higher rate of payments on future private construction performed
by the employer.

(2) The higher rate of payments is required by a project labor
agreement.

(3) The payments are made to the California Apprenticeship
Council pursuant to Section 1777.5.

(4) The director determines that annualization would not serve
the purposes of this chapter. begin delete This paragraph does not apply to
employer payments made to a supplemental unemployment benefits
plan or to a qualified cash or deferred arrangement, as described
in Section 401(k) of Title 26 of the United States Code. end delete

(f) (1) For the purpose of determining those per diem wages
for contracts, the representative of any craft, classification, or type
of worker needed to execute contracts shall file with the
Department of Industrial Relations fully executed copies of the
collective bargaining agreements for the particular craft,
classification, or type of work involved. The collective bargaining
agreements shall be filed after their execution and thereafter may
be taken into consideration pursuant to Section 1773 whenever
filed 30 days prior to the call for bids. If the collective bargaining
agreement has not been formalized, a typescript of the final draft
may be filed temporarily, accompanied by a statement under
penalty of perjury as to its effective date.

(2) When a copy of the collective bargaining agreement has
previously been filed, fully executed copies of all modifications
and extensions of the agreement that affect per diem wages or
holidays shall be filed.

(3) The failure to comply with filing requirements of this
subdivision shall not be grounds for setting aside a prevailing wage
determination if the information taken into consideration is correct.