BILL ANALYSIS
AB 395
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Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 395 (Fuentes) - As Introduced: February 23, 2009
Policy Committee: Labor and
Employment Vote: 6-1
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill authorizes an awarding body to assist the Director of
the Department of Industrial Relations (DIR) in the enforcement
of prevailing wage laws applying to apprenticeships through the
operation of the awarding body's approved labor compliance
program (LCP). The bill also:
1)Specifies that such assistance be provided only upon mutual
agreement of the LCP and the Chief of the Division of
Apprenticeship Standards (DAS).
2)Specifies that the contractor may appeal the result of any
subsequent enforcement action through the appellate process
set forth in existing law.
3)States that where the involvement of the Chief of DAS in an
enforcement action has been limited to a review of the
assessment and the matter has been resolved without
litigation, the awarding body shall deposit any penalties and
forfeitures recovered into its general fund.
FISCAL EFFECT
DIR indicates that the bill will result in additional costs,
totaling $200,000 in 2009-10 and about $370,000 in 2010-11 and
subsequent years. The costs are for 2 full time positions for
DAS review of enforcement actions taken by LCPs related to
apprentices, and for administrative hearings to review
enforcement actions that are appealed.
COMMENTS
AB 395
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1)Background . Existing law generally requires the payment of
prevailing wages on public contracts over $1,000 (with higher
thresholds when the entity awarding the contract elects to
initiate and enforce its own labor compliance program). The
Division of Labor Standards Enforcement (DLSE) within DIR is
responsible for enforcing prevailing wage requirements. The
Division of Apprenticeship Standards, within DIR, is
responsible for enforcing various state laws regarding the use
of apprentices on work projects.
Since 1989, state law has allowed political subdivisions of
the state that award public contracts to initiate and enforce
their own labor compliance programs (LCPs) in conjunction with
the DIR and DLSE. This authority relates to enforcement of
prevailing wage requirements for workers, but not to
requirements related to the use of apprentices on public works
projects.
As part of the budget package adopted in February, legislation
was enacted which makes major changes to the LCP system of
prevailing wage enforcement. SB2X 9 (Padilla) among other
things, moves responsibility for wage enforcement back to DIR.
New contracts will be subject to a fee accessed by DIR, which
will fund enforcement of the prevailing wage law on work
related to those contracts.
SB 9 X2 contains "grandfathering" language, which allows
previously approved in-house LCPs to be authorized by DIR to
continue operating their LCP in lieu of paying a fee under the
new system.
2)Rationale . This bill is sponsored by the City of Los Angeles,
which has a labor compliance section responsible for enforcing
LCPs in relation to the city's public works projects. The
city claims that its labor compliance section has been
effective in this role, recovering $4.3 million in wages for
workers employed in the city's public works projects. However,
while its LCP has authority to enforce prevailing wage laws
with respect to workers, it does not have authority to enforce
labor code violations affecting apprentices. The sponsor and
other supporters of the bill assert that when such
apprentice-related violations are found by LCPs, they must
forward their findings to DAS, which does not have the
staffing or resources to address the vast majority of
AB 395
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violations. This bill is intended to address this situation by
providing qualifying LCPs with the authority to enforce labor
laws related to apprentices.
3)Prior legislation . This bill is similar to AB 2369 (Fuentes)
from 2008. That measure was vetoed by the governor, who cited
the late budget and lack of time for review.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081