BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 807
                                                                  Page  1

          Date of Hearing:   May 14, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                     AB 807 (Leno) - As Amended:  April 30, 2003 

          Policy Committee:                              Labor and  
          Employment   Vote:                            8-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill clarifies that an employer may not credit pension or  
          other contributions against their prevailing wage obligations  
          unless the employer makes the contribution on no less than a  
          quarterly basis.

           FISCAL EFFECT  

          Negligible.

           COMMENTS  

           1)Background  .  Existing law requires that workers on public  
            works projects be paid not less than the prevailing wage.  The  
            prevailing wage is the basic hourly rate of pay and includes  
            health, welfare, and pension benefits, vacation, necessary  
            travel time and subsistence pay, and apprenticeship or other  
            training programs.  Employers may not credit benefits required  
            to be provided by other state or federal law against their  
            prevailing wage obligations.

            A recent court case,  IBEW Local 595 and IBEW Local 6 v. LIS  
            Electric, Inc. and Vladimir Litvak  , San Francisco Superior  
            Court, Case No. 310466, addressed the question of the  
            timelines in which employer payments against the health and  
            welfare portion of their prevailing wage obligation must be  
            made. 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  








                                                                  AB 807
                                                                  Page  2

            employer, finding that the employer did not intend to make the  
            contributions.

           2)Purpose  .  The sponsor of this bill, the California Building  
            and Construction Trades Council, want to clarify this issue in  
            law.  Specifically, the sponsor wants to require contractors  
            to pay the health and welfare portion on at least a quarterly  
            basis. The language in this bill 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. 

           Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081