BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               AB 1926      Hearing Date:    June 8,  
          2016
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          |Author:    |Cooper                                               |
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          |Version:   |March 30, 2016                                       |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Alma Perez-Schwab                                    |
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               Subject:  Public works:  prevailing wage:  apprentices


          KEY ISSUES
          
          Should the Legislature require contractors that request  
          apprentices to work on a public works project to pay the  
          apprentices for time spent traveling to the worksite, filling  
          out an application, undergoing testing, training or examinations  
          or other pre-employment processes? 

          Should these requirements apply to all contractors unless  
          otherwise provided for in a collective bargaining agreement? 
          
          
          ANALYSIS
          
           Existing law:
           
             1)   Requires that not less than the general prevailing rate  
               of per diem wages (as determined by the director of the  
               Department of Industrial Relations) be paid to all workers  
               employed on a "public works" project costing over $1,000  
               dollars and imposes misdemeanor penalties for violation of  
               this requirement. (Labor Code §1771)









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             2)   Defines "public work" to include, among other things,  
               construction work done under contract and paid for in whole  
               or in part out of public funds.  (Labor Code §1720)

             3)   Requires a contractor on a public works project to  
               employ registered apprentices, with some exceptions, at the  
               rate of one hour of apprentice work for every five hours of  
               labor performed by a journeyman for each separate craft.  
               (Labor Code §1777.5)

             4)   Requires that apprentices employed on public works  
               project be paid the prevailing rate of per diem wages for  
               apprentices in the trade to which he or she is registered  
               and shall be employed only at the work of the craft or  
               trade to which he or she is registered.
           

          This Bill  specifies that, unless otherwise provided by a  
          collective bargaining agreement, when a contractor requests the  
          dispatch of an apprentice to perform work on a public works  
          project and requires the apprentice to fill out an application,  
          or undergo testing, training, an examination, or other  
          pre-employment process as a condition of employment, the  
          apprentice shall be paid for time spent on the required  
          activity, including travel time, at the prevailing wage rate for  
          apprentices in the trade to which he or she is registered.


          COMMENTS
          
          1.  Background on Apprenticeship Programs: 

            The Division of Apprenticeship Standards (DAS), within the  
            Department of Industrial Relations, administers the state's  
            apprenticeship laws and enforces apprenticeship standards for  
            wages, hours, working conditions and the specific skills  
            required for state certification as a journey person in an  
            apprenticeable occupation. In general, apprenticeship programs  
            provide instruction that combines a formal course of in-class  
            instruction with practical "on-the-job" training. Driven and  
            funded by industry, these programs are collaborations of  
            industry, educational institutions, government, and the  
            apprentice.  

            The apprenticeship model of skill development,  







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            earn-while-you-learn, has been proven to work leading to well  
            trained workers who are employed in lifetime careers.  For  
            employers, participation in apprenticeship programs help  
            eliminate the need for expensive recruitment, creates a  
            diversified and flexible workforce and a larger pool of  
            employees with specific skills, reduces costs of high labor  
            turnover and increases productivity.                    
            According to the DAS 2014 annual report, California continues  
            to lead the nation with 53,366 apprentices registered in over  
            540 programs recognized by DAS. 

            Becoming an apprentice requires hard work and training that is  
            from 1 to 6 years, depending on the trade. The training is  
            supervised by the Joint Apprenticeship Committee (JAC) -  
            sometimes called Joint Apprenticeship and Training Committee  
            (JATC), or a Unilateral Apprenticeship Committee (UAC).   
            Training is "spelled out" in apprenticeship standards  
            developed by the local apprenticeship committees, with the  
            assistance of consultants from the Division of Apprenticeship  
            Standards, and registered with the State. Each apprentice  
            signs an apprentice agreement either with a JAC, UAC or an  
            individual employer. Upon successful completion of training,  
            they are issued a "Certificate of Completion" by the State.

          2. Employing Registered Apprentices:

            Existing law defines "apprentice" as a person at least 16  
            years of age who has entered into a written apprentice  
            agreement with an employer or program sponsor.  (Labor Code  
            §3077) A contractor on a public works project must employ one  
            (1) hour of apprentice work for every five (5) hours performed  
            by a journeyman. Contractors who do not meet the required  
            ratio must request dispatch of an apprentice from an  
            apprenticeship program (for each apprenticeable craft or  
            trade) by giving the program written notice (mail, fax, or  
            email) of at least 72 hours before the date on which  
            apprentices are required. 

            Apprentices employed on public works must be paid the  
            applicable apprentice prevailing per diem wage rate, available  
            from DAS, and derived from the Director's survey of wages paid  
            on public works in the geographic area of the craft or trade.  
            Except for projects with less than 40 hours of journeyman  
            work, each request for apprentice dispatch shall be for not  
            less than an 8 hour day per each apprentice, or 20% of the  







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            estimated apprentice hours to be worked for an employer in a  
            particular craft or trade on a project, whichever is greater.
          3.  Background on Pay Requirements for Hired Employees:

             Existing law requires employers to pay employees (already  
            hired) for any time they are suffered or permitted to work, if  
            the employee is there because they are required to be there,  
            then they must be paid. Below is a summary of requirements in  
            existing law for some of the most common questions on this  
            issue. 

            "Hours Worked" Under Existing Law 
            According to the Division of Labor Standards Enforcement's  
            (DLSE's) Enforcement Policies and Interpretation Manual,  
            "Under the basic definition set out in all of the IWC Orders,  
            'Hours Worked' means the time during which an employee is  
            subject to the control of any employer, and includes all of  
            the time the employee is suffered or permitted to work,  
            whether or not required to do so?Where it is determined that  
            the employee's time is subject to the control of the  
            employer?the time constitutes 'hours worked'."  (DLSE Manual  
            Section 46.1).  See also, Morillion v. Royal Packing Co., 22  
            Cal. 4th 575 (2000).

            Travel Time under Existing Law
            With respect to travel time, the DLSE Manual states, "If an  
            employee is required to report to the employer's business  
            premises before proceeding to an off-premises work site, all  
            of the time from the moment of reporting until the employee is  
            released to proceed directly to his or her home is time  
            subject to the control of the employer, and constitutes hours  
            worked."  (DLSE Manual Section 46.2) However, an employer may  
            establish different pay rates for travel time. As the DLSE  
            Manual provides, "The employer may establish a different pay  
            scale for travel time (not less than minimum wage) as opposed  
            to the regular work time rate. The employee must be informed  
            of the different pay rate for travel before the travel  
            beings."  (DLSE Manual Section 46.3.2)
            
            Training Time under Existing Law
            According to the DLSE Manual, "The Division utilizes the  
            standards announced by the U.S. Department of Labor contained  
            at 29 CFR §§ 785.27 through 785.31 in regard to lectures,  
            meetings and training programs: 








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            Time spent by employees attending training programs, lectures  
            and meetings are not counted as hours worked if the attendance  
            is voluntary on the part of the employee and all the following  
            criteria are met: 
               1.     Attendance is outside regular working hours; 
               2.     Attendance is voluntary: attendance is not voluntary  
                 if the employee is led to believe that present working  
                 conditions or the continuation of employment would be  
                 adversely affected by nonattendance; 
               3.     The course, lecture, or meeting is not directly  
                 related to the employee's job: training is directly  
                 related to an employee's job if it is designed to make  
                 the employee handle his job more effectively as  
                 distinguished from training him for another job or to a  
                 new or additional skill; and 
               4.     The employee does not perform any productive work  
                 during such attendance.
                 (DLSE Manual Section 46.6.5)

            All training programs, lectures, meetings, etcetera which do  
            not meet the above criteria are hours worked.  If any one of  
            the above listed criterion is not met, the time is to be  
            considered 'hours worked'."  (DLSE Manual Section 46.6.7)
          4.  Need for this bill?

            In order to be admitted into an apprenticeship program, an  
            applicant must take several steps that can include taking an  
            aptitude test among other requirements. By the time that a  
            contractor requests a dispatch of apprentices, the apprentice  
            would have been vetted, training in a state approved program  
            and ready to work and learn. The contractor simply calls the  
            approved apprenticeship program or committee, relays his or  
            her request for apprentices, and the program dispatches the  
            apprentices to the contractor. 

            According to the author and sponsors, in some instances,  
            apprentices will travel to the project location ready and able  
            to work, only to find out they are not put to work and instead  
            are required to partake in other pre-employment activities  
            without any compensation for their time. This bill would  
            require that apprentices dispatched to non-union contractors  
            be paid the prevailing wage rate in the event a contractor  
            does not use the apprentice for construction work, but  
            requires the apprentice to undergo testing, added safety  
            training, or other pre-employment requirements instead.  







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          5. Proponent Arguments  :
            
            The author and sponsors argue that when requested by a  
            contractor, an apprentice is completely responsible to arrive  
            on time and ready for work.  Often, just to arrive at work,  
            apprentices are required to travel to where the project is  
            which can sometimes be over one hundred miles from their home.  
            However, proponents argue, when an apprentice is dispatched,  
            but not put to work they lose out on an entire day's wages and  
            miss the opportunity to learn new skills to advance in their  
            training. According to the author and sponsors, this bill  
            provides apprentices dispatched to contractors with their  
            properly owed prevailing wage rate in the event a contractor  
            does not use the apprentice for construction work, but  
            requires the apprentice to undergo testing, added safety  
            training, or other pre-employment requirements. According to  
            proponents, the apprentice would receive payment only for the  
            time spent on the required activity.

          6.  Opponent Arguments  :

            Opponents argue that mandating payment of wages before a  
            hiring decision is made seems contrary to most usual  
            interpretations of an employment relationship.  A contractor  
            requests apprentices to satisfy the requirements of prevailing  
            wage law but for a number of possible reasons, the contractor  
            may ultimately choose not to use the apprentice or may not  
            even be lawfully able to employ the apprentice. For example,  
            they note that under the Education Code contractors working on  
            school property are required, with some exceptions, to pass a  
            criminal background check. An apprentice that cannot satisfy  
            this requirement may not be employed - yet would be required  
            to be paid pursuant to this bill. Likewise, many public works  
            projects have "drug free" requirements and an apprentice that  
            does not pass or will not submit to a drug/alcohol screen  
            would still be entitled to be paid under this bill. 

            Additionally, they argue that there could be situations where  
            a contractor chooses not to hire an apprentice for justifiable  
            reasons, being late for example, and this bill would require  
            the contractor to pay for the travel time and time spent  
            undergoing pre-employment processing even if they were not  
            hired. They also question how the travel time will be  
            confirmed; wondering what a reasonable amount of travel time  







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            is and what the consequences would be should an apprentice get  
            into an accident on the way, would they be able to file for  
            workers' compensation?  Furthermore, they argue that in the  
            circumstance when a contractor decides not to employ the  
            apprentice, it is unclear as to when their wages would be due,  
            and if not paid immediately, the contractor could be subject  
            to penalties for failure to pay. 

            Opponents also argue that this bill creates a double standard  
            for union and non-union contractors. Non-signatory contractors  
            would be obligated to pay a dispatched apprentice before it  
            has been determined the apprentice is suitable or eligible to  
            be hired while signatory contractors are not similarly  
            required to pay apprentices if "otherwise provided by a  
            collective bargaining agreement." They argue that if a  
            collective bargaining agreement mentions pre-hire obligations  
            - even if it does not specifically require the payments  
            mandated by this bill - they would seem to satisfy the  
            requirement of exemption.  This, they argue, is an  
            extraordinarily unreasonable and unequal mandate that only  
            non-union contractors would be subject to which could result  
            in many potential claims and lawsuits. 


          SUPPORT
          
          State Building and Construction Trades Council of California  
          (Sponsor)
          California Labor Federation
          California State Association of Electrical Workers
          California State Pipe Trades Council
          International Union of Elevator Constructors
          International Union of Operating Engineers 
          Western States Council of Sheet Metal Workers
          

          OPPOSITION
          
          Air Conditioning Trade Association 
          American Fire Sprinkler Association 
          Associated Builders and Contractors - San Diego Chapter
          Associated Builders and Contractors of California
          Plumbing-Heating-Cooling Contractors Association of California 
          Western Electrical Contractors Association 








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