BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 954  


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          Date of Hearing:  June 29, 2016 


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 954  
          (Hertzberg) - As Amended June 14, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill qualifies which employer payments may be included as  
          per diem wages for purposes of an employer's obligation to pay  
          prevailing wages on public works projects.  Specifically, this  
          bill:








                                                                     SB 954  


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          1)Redefines the prevailing wage to include industry advancement  
            and collective bargaining agreement (CBA) administrative fees,  
            provided that the employer is required by a CBA to pay them.
          2)Provides that per diem wages may include 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 CBA  
            administrative fees, only if such payments are made pursuant  
            to a CBA to which the employer is obligated.


          FISCAL EFFECT:


          No significant state fiscal impact. 


          COMMENTS:


          1)Background.  Current law requires the applicable general  
            prevailing rate of per diem wages to be paid to workers  
            employed on public works projects in California. This rate is  
            determined by the Director of the Department of Industrial  
            Relations for each locality in which the public work is to be  
            performed and for each craft, classification, or type of  
            worker needed to execute the public works project. The  
            prevailing wage in both federal and California law can include  
            two parts:  1) a basic hourly rate of pay, and 2) employer  
            payment of various benefits for the employee such as health  
            and life insurance, pension, vacation, among others.


          2)Purpose. This bill, sponsored by the State Building and  
            Construction Trades Council, revises the definition of  
            acceptable employer payments toward benefits, and thus what  








                                                                     SB 954  


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            counts as payment of the prevailing wage. Supporters state  
            that the current broad definition of these employer payments  
            allows non-union employees who are not party to a collective  
            bargaining agreement to have part of their wages deducted for  
            industry advancement purposes. Supporters also seek to clarify  
            that the employer must actually be a party to a CBA that  
            requires such contributions. According to supporters, this  
            ambiguity has been used by contractors to reduce worker's  
            wages to fund the contractors' own "industry advancement."





          3)Opposition. Opposition, including the Associated Builders and  
            Contractors of California, are concerned this bill will  
            eliminate non-union contractors' ability to fund industry  
            advancement as part of their permitted credits when  
            calculating the prevailing wage for their workers. Opponents  
            contend that the Legislature should not be singling out  
            prevailing wage contributions based on the union or non-union  
            status of the contractor.  
          Analysis Prepared by:Misty Feusahrens / APPR. / (916)  
          319-2081