BILL ANALYSIS Ó
AB 1308
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
AB 1308
(Perea) - As Introduced February 27, 2015
SUBJECT: Apprenticeship programs: approval
SUMMARY: Revises a specified "needs requirement" under existing
law related to the approval of apprenticeship programs.
Specifically, this bill:
1)Requires, in order to establish that apprenticeship training
needs justify the approval of a new program, that existing
programs do not have the capacity, or neglect or refuse, to
dispatch sufficient apprentices to qualified employers who
"have requested apprentices", as shown by a "sustained pattern
of unfilled requests."
2)Eliminates a provision of existing law that authorizes the
California Apprenticeship Council to approve a new
apprenticeship program if special circumstances, as
established by regulation, justify the establishment of the
program.
3)Provides that for purposes of this requirement, an existing
apprenticeship program serves the "same craft or trade" as a
proposed apprenticeship program when there would be a
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substantial overlap in the work processes covered by the
programs or when graduates of the existing program would be
qualified to perform a substantial portion of the work that
would be performed by graduates of the new program.
EXISTING LAW:
1)Authorizes the Chief of the Division of Apprenticeship
Standards to approve apprenticeship programs "whenever the
apprentice training needs justify the establishment" of such a
program.
2)In the building and construction trades, provides that the
apprentice training "needs" shall be deemed to justify the
approval of a new apprenticeship program only if the following
conditions are met:
a) There is no existing approved apprenticeship program
approved serving the same craft or trade and geographic
area.
b) Existing approved apprenticeship programs that serve the
same craft or trade and geographic area do not have the
capacity, or neglect or refuse, to dispatch sufficient
apprentices to qualified employers at a public works site
who are willing to abide by the applicable apprenticeship
standards.
c) Existing approved apprenticeship programs in the same
trade and geographic area have been identified by the
California Apprenticeship Council as deficient in meeting
their obligations under existing law.
3)Authorizes the California Apprenticeship Council to approve a
new apprenticeship program if special circumstances, as
established by regulation, justify the establishment of the
program.
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FISCAL EFFECT: Unknown
COMMENTS: The apprenticeship training program is a unique
system for developing a skilled workforce, and is a system that
is heavily used in the construction industry in California.
In general terms, apprenticeship is a program of instruction
that combines a formal course of theoretical in-class
instruction with practical "on-the-job" training.
Apprenticeship programs are sponsored by either a "joint
apprenticeship committee" composed of union and employer
representatives or a "unilateral apprenticeship committee"
administered by a single employer or an employer association.
These types of programs are commonly referred to as "joint" and
"unilateral" programs.
The federal Office of Apprenticeship Training, Employment, and
Labor Services (OATELS) of the Department of Labor directly
oversees apprenticeship programs in 23 states and recognizes
State Apprenticeship Councils in the remaining 27 states
(including California). In California, two state entities
administer the apprenticeship system: the California
Apprenticeship Council (CAC) and the Division of Apprenticeship
Standards (DAS). According to DAS, it received 122 applications
for apprenticeship training programs between 2003 and 2005, and
approved 121 programs (latest information available).
AB 921 (Keeley), Chapter # 903, Statutes of 1999, added the
provisions to current law related to the "needs" standards
concerning the approval of new apprenticeship programs.
Supporters of that legislation argued that over the prior decade
there had been a progressive weakening of the standards
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regulating apprenticeship programs in California. Supporters
argued that that situation had resulted in a proliferation of
programs that failed to adequately train apprentices in the
skills needed to master a trade and, in some cases, only
provided employers with a means to cheap labor. AB 921 was
intended to crack down on such substandard programs.
Opponents of AB 921 argued that non-union employers had
developed and approved craft training programs that met state
and federal requirements. Opponents argued that AB 921 was a
direct special interest drive by organized labor to control the
training of apprentices and eliminate other non-union
apprenticeship programs. They further argued that the bill
would be an assault on freedom for businesses and workers.
In 2002, in response to the needs test, the U.S. Department of
Labor (DOL) began the process of "derecognition," contending
that the amended apprenticeship statute did not conform to
federal standards. In April 2005, an Administrative Law Judge
issued a proposed decision holding that the DOL has the right to
"derecognize" California's authority to regulate apprenticeship
on federal projects. The decision stated that the "needs test"
in the California Labor Code "does not promote competition among
programs, does not consider the needs of individuals seeking
apprenticeship training, and limits training opportunities for
apprentices." The DOL Administrative Review Board affirmed the
decision on January 31, 2007.
Some officials and stakeholders disagreed with the DOL's view of
the "needs test", pointing out that a training needs standard
for approving new apprenticeship programs was actually
recommended by the federal government itself after adoption of
the National Apprenticeship Act of 1937, and that approving new
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programs without consideration of the training needs leads to
exploitation of the workers. They also pointed out that
California has the largest and most successful apprenticeship
system in the country.
It appears that the practical consequence of the "derecognition"
by DOL has been that apprenticeship programs approved by DAS
must request separate approval from the DOL. Before
"derecognition," federal approval was essentially automatic.
Since that action, apprenticeship programs approved by
California reportedly have been approved by the DOL as a matter
of course.
ARGUMENTS IN SUPPORT
According to the author:
"The State is seeking to expand apprenticeship programs to
non-traditional industries or emerging sectors of the economy.
The proposed budget includes $15 million to establish and
fund new demonstration apprenticeship projects in
non-traditional industries. As such there is a need to
protect the currently approved apprenticeship programs.
California currently has over 500 state approved
apprenticeship programs in many fields. The vast majority of
apprentices are enrolled in the Building and Construction
Trades apprenticeship programs. Joint-Labor management
programs make up 90% of the approved programs followed by
"unilateral" programs (contractor only / non-union).
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Labor-management programs invest over $100 million annually on
training the next generation of skilled workers to meet
California's infrastructure demands. However, since the use
of apprentices is required on public works projects, and
apprentice pay rates start at only 40% of a journeyperson wage
rate, some contractor associations have sought and received
approval to operate programs and utilized them to abuse the
apprenticeship system in order to underbid competitors while
also failing to graduate apprentices. Standards and statutes
have been enacted to protect against such unscrupulous
behavior. However, more can and should be done to further
protect existing high performing programs from labor market
manipulation."
This bill is sponsored by the State Building and Construction
Trades Council. They argue that it provides much needed
clarification to DAS for the purpose of determining when an
existing program is deficient. Adding "have requested
apprentices" to Section 3075(b)(2) clarifies that contractors
must actually request apprentices before existing programs may
be found to lack the capacity or willingness to dispatch them.
The sponsor states that during Governor Schwarzenegger's
administration, the DAS sought to rely on EDD projections of
future apprentice needs to justify approval of new programs even
though there was no evidence contractors had sought apprentices
from existing programs and were unable to receive them.
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In addition, current law allows the California Apprenticeship
Council (CAC) to promulgate a regulation providing for "special
circumstances" that justify approval of new apprenticeship
programs even if one is not needed. The sponsor notes that
this statutory provision was adopted in 1999, and CAC has never
promulgated such a regulation. Therefore, this bill removes
this statutory provision.
Finally, the sponsor states that this bill protects existing
high performing programs that graduate apprentices by ensuring
the DAS approves new programs only when the proposed new program
does not substantially overlap with an existing program's work
processes.
ARGUMENTS IN OPPOSITION
Opponents write the following in opposition to this bill:
[This bill] perpetuates California's needs test for
apprenticeship. Economics Professor Charles Baird correctly
characterizes a needs test as '?a common device by which
regulatory bodies restrict competition from disfavored
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interlopers.' While Baird does not specifically identify who
the interlopers are, they are frequently trade associations
who see an opportunity to train young men and women for
careers in construction.
As I am sure you are aware, California's needs test was
established in 1999. The Department of Labor's Office of
Apprenticeship Training, Employment and Labor Services
(OATELS) did not approve this provision and the Department of
Labor started the process to revoke California's State
Apprenticeship Councils certification in 2002?
?Unfortunately, [this bill] exacerbates the damaging aspects
of the needs test by adding ambiguous language and deleting
the very modest authority of the California Apprenticeship
Council to approve a new apprenticeship program 'justified by
special circumstances by regulation.' While it may be
suggested that adding a requirement that there be a 'sustained
pattern of unfilled requests' to justify new apprenticeship
opportunities, we would argue that this vague requirement of
'sustained' will never be satisfactory to those who prefer
monopoly over fair and open competition and training
opportunities for all."
REGISTERED SUPPORT / OPPOSITION:
Support
Construction Employers' Association
State Building and Construction Trades Council
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Opposition
Western Electrical Contractors Association
Plumbing-Heating-Cooling Contractors Association of CA
Air Conditioning Trade Association
Analysis Prepared by:Benjamin Ebbink / L. & E. / (916) 319-2091