BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: June 25, 2009 2009-2010 Regular
Session
Consultant: Rodger Dillon Fiscal:Yes
Urgency: No
Bill No: AB 395
Author: Fuentes
Version: As introduced February 23, 2009
SUBJECT
Employment: apprenticeship programs.
KEY ISSUE
Shall government entities operating labor compliance programs
(LCPs), under specified conditions, be authorized to assist with
the enforcement of laws governing apprenticeship standards and,
in specified circumstances, be empowered to enforce any
applicable penalties?
PURPOSE
To better enforce the operation of apprenticeship standards and
the payment of prevailing wages to apprentices on public works
projects.
ANALYSIS
Existing law:
Requires, generally, the payment of prevailing wages, as
defined, on public works contracts over $1,000.
Authorizes - and in some circumstances, requires - awarding
bodies to adopt "Labor Compliance Programs" (LCPs) on public
works projects to ensure that the projects adhere to
prevailing wage standards required by State and Federal laws,
regulations and directives, as well as policies and
provisions.
Specifies that an approved LCP must meet the following
criteria:
? All bid invitations and public works contracts issued
must contain appropriate language about the requirements of
the public works chapter of the Labor Code;
? A pre-job conference shall be conducted with the
contractor or subcontractors to discuss federal and state
labor law requirements applicable to the contract;
? Contractors and subcontractors shall maintain and
furnish to the LCP a certified copy of each weekly payroll
with a statement of compliance signed under penalty of
perjury;
? The LCP shall review and, if appropriate, audit payroll
records to verify compliance with the public works chapter
of the Labor Code;
? The LCP shall require the awarding body to withhold
contract payments when payroll records are delinquent or
inadequate; and,
? The LCP shall require the awarding body to withhold
contract payments equal to the amount of underpayment and
applicable penalties when the LCP establishes that
underpayment has occurred.
Provides that if an awarding body elects to initiate and
enforce its own labor compliance program, the prevailing wage
requirements shall not apply to projects of $25,000 or less
when the work is for construction work, or to any
public works project of $15,000 or less when the project is
for alteration, demolition, repair or maintenance work.
Authorizes the Director of DIR to appoint assistants necessary
to effectuate the purposes of state law governing
apprenticeships.
This Bill:
Provides that an awarding body that implements a labor
Hearing Date: June 25, 2009 AB 395
Consultant: Rodger Dillon Page 2
Senate Committee on Labor and Industrial Relations
compliance program may, with the approval of the Chief of the
Division of Apprenticeship Standards (DAS), assist the
Director of DIR in the enforcement of a specified provision of
law [L.C. Section 1777.5] related to the employment of
apprentices on public works projects;
Specifies that a contractor may appeal the result of any
subsequent enforcement action through the appellate process
set forth under existing law;
States that where the involvement of the Chief of DAS has been
limited to a review of the assessment and the matter has been
resolved without litigation by or against DAS, the awarding
body shall enforce any applicable penalties and shall deposit
any penalties and forfeitures recovered into its general fund.
COMMENTS
1. Need for this bill?
Some contractors on public works projects fail to pay
applicable prevailing wages, maintain less than the required
ratio of journeymen to apprentices, or otherwise violate the
law relating public works, prevailing wages, and the rights of
apprentices. Officials of labor compliance programs
occasionally encounter instances of these violations. While
these officials currently have the authority to enforce
provisions of California Labor Code relating to prevailing
wage issues, the enforcement of apprenticeship standards is
under the jurisdiction of the Division of Apprenticeship
Standards. Giving labor compliance officers the authority to
enforce apprenticeship standards, in specified circumstances
and with approval of the Chief of the Division of
Apprenticeship Standards, could be seen as a logical follow-up
to existing law. The expansion of enforcement authority
should give some relief to affected parties. This may include
both apprentices and also those contractors who are more
consistent in following the law but who are at a competitive
disadvantage compared to those who are cutting their costs by
failing to properly follow apprenticeship standards.
Hearing Date: June 25, 2009 AB 395
Consultant: Rodger Dillon Page 3
Senate Committee on Labor and Industrial Relations
2. Proponent Arguments :
The author, sponsor, and supporters of this bill state that
LCPs often discover numerous violations of the laws relating
to apprenticeships. The Division of Apprenticeship Standards
has the authority to enforce apprenticeship standards, but
they insufficient staff to handle the volume of complaints.
LCPs have staff to investigate apprenticeship violations, but
no authority to do so. The breach of these laws results in
unfair competition to law-abiding contractors. Supporters
cite the success of the LCP of the City of Los Angeles; it has
collected $4.3 million through its other enforcement efforts.
AB 395 would allow the DAS to shift the burden of dealing with
violating contractors from itself to certain LCPs, resulting
in reduced costs to DAS and the state and to better
enforcement of law relating to apprenticeships.
3. Opponent Arguments :
None received.
SUPPORT
Mayor Antonio R. Villaraigosa, City of Los Angeles (sponsor)
American Federation of State, County and Municipal Employees
California Building and Construction Trades Council
OPPOSITION
None received.
* * *
Hearing Date: June 25, 2009 AB 395
Consultant: Rodger Dillon Page 4
Senate Committee on Labor and Industrial Relations