BILL NUMBER: AB 326	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Frazier

                        FEBRUARY 13, 2015

   An act to amend Section 1742.1 of the Labor Code, relating to
public works.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 326, as introduced, Frazier. Public works: prevailing wage
rates: wage and penalty assessments.
   Existing law requires the Labor Commissioner to issue a civil wage
and penalty assessment to a contractor or subcontractor, or both, if
the Labor Commissioner determines, after investigation, that the
contractor or subcontractor, or both, violated the laws regulating
public works contracts, including the payment of prevailing wages.
Existing law also requires the awarding body, as defined, to withhold
from payments due under a contract for public work an amount
sufficient to satisfy the civil wage and penalty assessment issued by
the Labor Commissioner, and to give notice of the withholding to the
affected contractor or subcontractor.
   Existing law permits the affected contractor or subcontractor to
obtain review of a civil wage and penalty assessment or a notice of
withholding, as specified. Existing law provides that, after 60 days
following the service of a civil wage and penalty assessment or
notice, the affected contractor, subcontractor, and surety on a bond
issued to secure the payment of wages, as provided, become liable for
liquidated damages in an amount equal to the amount of unpaid wages,
as specified. Existing law provides that there is no liability for
liquidated damages if a contractor, subcontractor, or surety deposits
the full amount of the assessment or notice, including penalties,
with the Department of Industrial Relations to hold in escrow pending
administrative or judicial review.
   This bill would make technical, nonsubstantive changes to the
latter provisions and delete obsolete provisions.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1742.1 of the Labor Code is amended to read:
   1742.1.  (a) After 60 days following the service of a civil wage
and penalty assessment under Section 1741 or a notice of withholding
under subdivision (a) of Section 1771.6, the affected contractor,
subcontractor, and surety on a bond or bonds issued to secure the
payment of wages covered by the assessment or notice shall be liable
for liquidated damages in an amount equal to the wages, or portion
thereof, that still remain unpaid. If the assessment or notice
subsequently is overturned or modified after administrative or
judicial review, liquidated damages shall be payable only on the
wages found to be due and unpaid.
   Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial
grounds for appealing the assessment or notice with respect to a
portion of the unpaid wages covered by the assessment or notice, the
director may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid wages.
Any liquidated damages shall be distributed to the employee along
with the unpaid wages. Section 203.5 shall not apply to claims for
prevailing wages under this chapter.
   (b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations, within 60 days following service of the
assessment or notice, for the department to hold in escrow pending
administrative and judicial review. The department shall release
 such  the  funds  in escrow  ,
plus any interest earned, at the conclusion of all administrative and
judicial review to the persons and entities who are found to be
entitled to  such   those  funds.
   (c) The Labor Commissioner shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a civil wage and penalty assessment under Section 1741,
afford the contractor or subcontractor the opportunity to meet with
the Labor Commissioner or his or her designee to attempt to settle a
dispute regarding the assessment without the need for formal
proceedings. The awarding body shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a notice of withholding under subdivision (a) of Section
1771.6, afford the contractor or subcontractor the opportunity to
meet with the designee of the awarding body to attempt to settle a
dispute regarding the notice without the need for formal proceedings.
The settlement meeting may be held in person or by telephone and
shall take place before the expiration of the 60-day period for
seeking administrative review. No evidence of anything said or any
admission made for the purpose of, in the course of, or pursuant to,
the settlement meeting is admissible or subject to discovery in any
administrative or civil proceeding. No writing prepared for the
purpose of, in the course of, or pursuant to, the settlement meeting,
other than a final settlement agreement, is admissible or subject to
discovery in any administrative or civil proceeding. The assessment
or notice shall advise the contractor or subcontractor of the
opportunity to request a settlement meeting. 
   (d) This section shall become operative on January 1, 2007.