BILL ANALYSIS
AB 807
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Date of Hearing: April 23, 2003
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Paul Koretz, Chair
AB 807 (Leno) - As Amended: April 10, 2003
SUBJECT : Public works.
SUMMARY : Provides that employer payments in the form of regular
contributions made or costs incurred for more than a weekly
period, but not less than quarterly, in providing benefit plans,
funds, or programs that covered the particular weekly period,
are deemed to be constructively made or incurred during that
weekly period.
EXISTING LAW :
1)Requires the payment of the general prevailing rate of per
diem wages to workers employed on public works projects
costing over $1,000, as determined by the Director of the
Department of Industrial Relations.
2)Provides that per diem wages shall be deemed to include
employer payments for health and welfare, pension, vacation,
travel, and subsistence pay, apprenticeship or other training
programs, and similar purposes, and specifies the employer
contributions, costs, and payments that employer payments may
include.
3)Prohibits credit from being granted for benefits required to
be provided by other state or federal law, and provides that
credits for employer payments may not reduce the obligation to
pay the hourly straight time or overtime wages found to be
prevailing.
FISCAL EFFECT : Unknown
COMMENTS :
The sponsor of this bill is the California Building and
Construction Trades Council of California. The author and
sponsor argue that there is no requirement for contractors on
public works projects to pay the health and welfare portion of
the prevailing wage in a timely manner. According to the
sponsor, some contractors have been found to abuse this
AB 807
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loophole.
This bill is intended to address the problem by requiring that
the health and welfare portion of the prevailing wage be paid at
least on a quarterly basis. The language is modeled after a
federal labor regulation, 29 CFR 5.5(a)(1)(i), relating to labor
standards applicable to construction contracts that are
federally financed and assisted.
A recent judgment relating to this issue was issued in the case
of IBEW Local 595 and IBEW Local 6 v. LIS Electric, Inc. and
Vladimir Litvak , San Francisco Superior Court, Case No. 310466.
In that case, the employer claimed a credit against the
prevailing wage for pension contributions that were not made.
At trial, the employer's lawyer argued that the state prevailing
wage law does not contain any deadline for making the
contributions. The Court ultimately ruled against the employer,
finding that the employer did not intend to make the
contributions. However, clarification of this issue is not
provided for in statue.
REGISTERED SUPPORT / OPPOSITION :
Support
Air-conditioning & Refrigeration Contractors Association
Air-conditioning Sheet Metal Association
California Association of Electrical Workers
California Chapters of the National Electrical Contractors
Association
California Labor Federation, AFL-CIO
California Legislative Conference of the Plumbing, Heating and
Piping Industry
California State Pipe Trades Council
State Building and Construction Trades Council (Sponsor)
Western States Council of Sheet Metal Workers
Western Wall & Ceiling Contractors Association
Opposition
None on file.
Analysis Prepared by : Nick Louizos / L. & E. / (916) 319-2091