BILL ANALYSIS Ó SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS Senator Tony Mendoza, Chair 2015 - 2016 Regular Bill No: AB 1308 Hearing Date: June 10, 2015 ----------------------------------------------------------------- |Author: |Perea | |-----------+-----------------------------------------------------| |Version: |February 27, 2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Gideon Baum | | | | ----------------------------------------------------------------- Subject: Apprenticeship programs: approval. KEY ISSUE Should the Legislature strengthen and expand the requirements for approving new apprenticeship programs? ANALYSIS Existing law provides a framework for promoting and developing apprenticeship training through the California Apprenticeship Council (CAC) and the Division of Apprenticeship Standards (DAS) within the Department of Industrial Relations (DIR). DAS enforces apprenticeship standards for, among other things, working conditions, classroom instruction and the specific skills required for state certification as a journeyperson in an apprentice occupation. Existing law requires that all apprenticeship programs be approved by the Chief of the Division of Apprenticeship Standards. Existing law empowers the Chief to approve apprenticeship programs in any trade anywhere in the state, including cities and trade areas, if the apprentice training needs justify the creation of a program. However, in order for AB 1308 (Perea) Page 2 of ? the Chief to approve an apprenticeship program in the building and construction trades, any of the following "needs-based" conditions must be met: 1) There is no existing apprenticeship program serving the same craft or trade and geographic area; 2) Existing 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; 3) Existing apprenticeship programs approved under this chapter that serve the same trade and geographic area have been identified by the California Apprenticeship Council as deficient in meeting their obligations. (Labor Code §3075) Existing law requires that, for public works projects in excess of $30,000, the contractor utilize apprentices for apprenticeable crafts or trades. Prior to commencing work, the contractor may apply to any apprenticeship program in the craft or trade that can provide apprentices to the site of the public work. The apprenticeship program or programs, upon approving the contractor, must arrange for the dispatch of apprentices to the contractor. (Labor Code §1777.5) Existing law requires the ratio of work performed by apprentices to journeymen employed in a particular craft or trade on the public work may be no less than the ratio of one hour of apprentice work for five hours of journeyman work , and no higher than the ratio stipulated in the apprenticeship standards under which the apprenticeship program operates. (Labor Code §1777.5) This bill would: 1)Require that, in order to establish that apprenticeship training needs justify the approval of a new program, 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 AB 1308 (Perea) Page 3 of ? of unfilled requests." 2)Eliminate 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)Provide 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 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. COMMENTS 1. Legislative Background: California's apprenticeship programs represent a unique and important feature of the state's workforce development system. The core idea is that, by combining both high quality classroom instruction and high quality on-the-job training experience, apprenticeship programs train high-quality professionals in a variety of different fields and professions. The building and construction trades make up 79% of all of the apprentices in the state of California. However, some stakeholders have raised concerns with certain apprenticeship programs that reportedly do not provide high quality instruction and training. Instead, these low-quality programs provide apprentices to meet the requirements of the public works law without actually giving the apprentices the necessary skills to perform the trades. One of the responses to this was the creation of the "needs-based" requirement for approval of new apprenticeship programs in 1999. 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 AB 1308 (Perea) Page 4 of ? federal standards. In early 2007, the "derecognition" of California's apprenticeship programs became official. The DOL decision continues to stand. According to stakeholders, 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. 2. Proponent Arguments : 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. 3. Opponent Arguments : 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 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. ?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 AB 1308 (Perea) Page 5 of ? 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." 4. Prior Legislation : AB 921 (Keeley), Chapter 903, Statutes of 1999, included, among other things, the "needs-based" conditions for the building and construction trades. SUPPORT State Building and Construction Trades Council (Sponsor) Construction Employers' Association OPPOSITION Air Conditioning Trade Association Plumbing-Heating-Cooling Contractors Association of California Western Electrical Contractors Association -- END --