BILL NUMBER: SB 16 CHAPTERED 06/01/99 CHAPTER 30 FILED WITH SECRETARY OF STATE JUNE 1, 1999 APPROVED BY GOVERNOR JUNE 1, 1999 PASSED THE ASSEMBLY MAY 13, 1999 PASSED THE SENATE MARCH 22, 1999 AMENDED IN SENATE MARCH 3, 1999 AMENDED IN SENATE JANUARY 14, 1999 INTRODUCED BY Senator Burton and Assembly Member Villaraigosa (Principal coauthor: Senator Solis) (Principal coauthor: Assembly Member Granlund) (Coauthors: Senators Baca, Chesbro, Karnette, Murray, Perata, and Sher) (Coauthors: Assembly Members Alquist, Aroner, Calderon, Dutra, Floyd, Havice, Keeley, Knox, Lempert, Longville, Pescetti, Romero, Steinberg, Washington, Wildman, Wiggins, and Wright) DECEMBER 7, 1998 An act to amend Sections 1773 and 1773.1 of, to add Section 1773.9 to, and to repeal Section 1773.8 of, the Labor Code, relating to public works. LEGISLATIVE COUNSEL'S DIGEST SB 16, Burton. Public works: prevailing wages. (1) Existing law requires the body awarding any contract for public work to include in the contract specifications a requirement requiring the payment of travel and subsistence payments to each workman needed to execute the work, as those payments are defined in the applicable collective bargaining agreements. This bill would repeal this provision. (2) 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 provided in specified provisions. Existing law requires the body awarding a contract for public work to obtain from the Director of Industrial Relations the general prevailing rate for holiday and overtime work in the locality in which the public work is to be performed. Existing law specifies that the holidays upon which the prevailing rate of per diem wages shall be paid need not be specified by the awarding body but shall be all holidays recognized in the collective bargaining agreement. This bill would provide that the holidays upon which the prevailing rate of per diem wages shall be paid shall be all holidays recognized by the applicable collective bargaining agreement and that if the prevailing rate is not based on a collectively bargained rate, the holidays upon which the prevailing rate shall be paid shall be as provided by a specified provision of existing law. This bill would specify the methodology that the Director of Industrial Relations is to use to determine the general prevailing rate of per diem wages in the locality in which the public work is to be performed, including the rate for holiday and overtime work. (3) Existing law requires that the representative of any craft, classification, or type of worker needed to execute a public works contract entered into with the state to file with the Department of Industrial Relations fully executed copies of collective bargaining agreements for the particular craft, classification, or type of work involved for the purposes of determining the per diem wages. This bill would require the representative to file with the department an executed statement of the collectively bargained wage rates for the particular craft, classification, or type of work involved. The bill would provide that employer payments for per diem wages are deemed to include apprenticeship or other training programs authorized by an existing provision of law so long as the cost of training is reasonably related to the amount of the contributions. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1773 of the Labor Code is amended to read: 1773. The body awarding any contract for public work, or otherwise undertaking any public work, shall obtain the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the locality in which the public work is to be performed for each craft, classification, or type of worker needed to execute the contract from the Director of Industrial Relations. The holidays upon which those rates shall be paid need not be specified by the awarding body, but shall be all holidays recognized in the applicable collective bargaining agreement. If the prevailing rate is not based on a collectively bargained rate, the holidays upon which the prevailing rate shall be paid shall be as provided in Section 6700 of the Government Code. In determining the rates, the Director of Industrial Relations shall ascertain and consider the applicable wage rates established by collective bargaining agreements and the rates that may have been predetermined for federal public works, within the locality and in the nearest labor market area. Where the rates do not constitute the rates actually prevailing in the locality, the director shall obtain and consider further data from the labor organizations and employers or employer associations concerned, including the recognized collective bargaining representatives for the particular craft, classification, or type of work involved. The rate fixed for each craft, classification, or type of work shall be not less than the prevailing rate paid in the craft, classification, or type of work. If the director determines that the rate of prevailing wage for any craft, classification, or type of worker is the rate established by a collective bargaining agreement, the director may adopt that rate by reference as provided for in the collective bargaining agreement and that determination shall be effective for the life of the agreement or until the director determines that another rate should be adopted. SEC. 2. Section 1773.1 of the Labor Code is amended to read: 1773.1. Per diem wages shall be deemed to include employer payments for health and welfare, pension, vacation, travel, subsistence, and apprenticeship or other training programs authorized by Section 3093 so long as the cost of training is reasonably related to the amount of the contributions, and similar purposes, when the term "per diem wages" is used in this chapter or in any other statute applicable to public works. For the purpose of determining per diem wages for contracts entered into with the state, the representative of any craft, classification, or type of worker needed to execute the contracts entered into with the state shall file with the Department of Industrial Relations an executed statement of the collectively bargained wage rates for the particular craft, classification, or type of work involved. The statement of rates shall be filed within 10 days after the rates have been negotiated and thereafter may be taken into consideration pursuant to Section 1773 whenever filed 30 days prior to the call for bids. SEC. 3. Section 1773.8 of the Labor Code is repealed. SEC. 4. Section 1773.9 is added to the Labor Code, to read: 1773.9. (a) The Director of Industrial Relations shall use the methodology set forth in subdivision (b) to determine the general prevailing rate of per diem wages in the locality in which the public work is to be performed. (b) The general prevailing rate of per diem wages includes all of the following: (1) The basic hourly wage rate being paid to a majority of workers engaged in the particular craft, classification, or type of work within the locality and in the nearest labor market area, if a majority of the workers is paid at a single rate. If no single rate is being paid to a majority of the workers, then the single rate being paid to the greatest number of workers, or modal rate, is prevailing. If a modal rate cannot be determined, then the director shall establish an alternative rate, consistent with the methodology for determining the modal rate, by considering the appropriate collective bargaining agreements, federal rates, rates in the nearest labor market area, or other data such as wage survey data. (2) Other employer payments included in per diem wages pursuant to Section 1773.1 and as included as part of the total hourly wage rate from which the basic hourly wage rate was derived. In the event the total hourly wage rate does not include any employer payments, the director shall establish a prevailing employer payment rate by the same procedure set forth in paragraph (1). (3) The rate for holiday and overtime work shall be those rates specified in the collective bargaining agreement when the basic hourly rate is based on a collective bargaining agreement rate. In the event the basic hourly rate is not based on a collective bargaining agreement, the rate for holidays and overtime work, if any, included with the prevailing basic hourly rate of pay shall be prevailing. (c) If the director determines that the general prevailing rate of per diem wages is the rate established by a collective bargaining agreement, and that the collective bargaining agreement contains definite and predetermined changes during its term that will affect the rate adopted, the director shall incorporate those changes into the determination. Predetermined changes that are rescinded prior to their effective date shall not be enforced. SEC. 5. The Legislature declares that the intent of Section 1773.9 of the Labor Code, as added by Section 4 of this act, is to give effect to Assembly Concurrent Resolution No. 17 of the 1997-98 Regular Session of the Legislature (Res. Ch. 34, Stats. 1997) by codifying the methodology for calculating the general prevailing rate of per diem wages. In Assembly Concurrent Resolution No. 17, the Legislature declared that it "has relied on the long-established definitions of general prevailing rate of per diem wages in amending and extending the prevailing wage law contained in the California Labor Code on numerous occasions, and that it would be contrary to the intent of the Legislature for those definitions to be changed by administrative action, because the definitions have become incorporated by implication into these statutory provision."