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