Amended in Assembly June 14, 2016

Senate Bill No. 954

Introduced by Senator Hertzberg

February 4, 2016

An act to amend Section 1773.1 of Labor Code, relating to prevailing wage.

LEGISLATIVE COUNSEL’S DIGEST

SB 954, as amended, Hertzberg. Public works: prevailing wage: per diem wages.

Existing law requires, except for public works projects of $1,000 or less, that workers employed on public works be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality that the public work is performed, and not less than the general prevailing rate of per diem wages for holiday and overtime work fixed, as prescribed. Existing law requires the Director of Industrial Relations to determine the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed, and the general prevailing rate of per diem wages for holiday and overtime work.

Existing law includes, as per diem wages, employer payment for 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. Per diem wages also include employer payments for other purposes similar to those specified, including, but not limited to, certain apprenticeship or other training programs, to the extent that the cost of training is reasonably related to the amount of the contributions, and worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978, to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.

This bill would instead require per diem wages to include industry advancement and collective bargaining agreements administrative begin delete fees, provided that the employer is required by a collective bargaining agreement to make those payments. end delete begin insert fees if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated. end insert The bill would also exclude from per diem wages, begin insert if the payments are not made pursuant to a collective bargaining agreement to which the employer is obligated, end insert employer payments for other purposes similar to certain apprenticeship or other training programs, worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978, and industry advancement and collective bargaining agreements administrative begin delete fees. end delete begin insert fees, as specified. end insert

Existing law provides that employer payments are credits against the obligation to pay the general prevailing rate of per diem wages. Credit is prohibited 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.

This bill would also prohibit credit for payments for industry advancement begin delete if those payments are not required by a collective bargaining agreement. end delete begin insert and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. end insert

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 (29 U.S.C. Sec. 175a), 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 begin delete the employer is required by a
collective bargaining agreement to make these payments. end delete begin insert these
payments are made pursuant to a collective bargaining agreement
to which the employer is obligated. end insert

(9) Other purposes similar to those specified in paragraphs (1)
to (5), begin delete inclusive. end delete begin insert inclusive; or other purposes similar to those
specified in paragraphs (6) to (8), inclusive, if the payments are
made pursuant to a collective bargaining agreement to which the
employer is obligated. end insert

(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, 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 (29 U.S.C. Sec. 175a), or
for payments for industry advancement begin delete if those payments are not
required by a collective bargaining agreement. end delete begin insert and collective
bargaining agreement administrative fees if those payments are
not made pursuant to a collective bargaining agreement to which
the employer is obligated. end insert 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 the
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.

(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
they are 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.