BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 395|
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THIRD READING
Bill No: AB 395
Author: Fuentes (D)
Amended: 7/6/09 in Senate
Vote: 21
SENATE LABOR & INDUST. RELATIONS COMMITTEE : 5-1, 6/25/09
AYES: DeSaulnier, Wyland, Ducheny, Leno, Yee
NOES: Hollingsworth
SENATE APPROPRIATIONS COMMITTEE : 9-4, 8/27/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Wyland, Yee
NOES: Cox, Denham, Runner, Walters
ASSEMBLY FLOOR : 51-28, 6/1/09 - See last page for vote
SUBJECT : Employment: apprenticeship programs
SOURCE : Mayor Antonio Villaraigosa, City of Los Angeles
DIGEST : This bill authorizes an awarding body to assist
the Director of the Department of Industrial Relations in
the enforcement of prevailing wage laws that apply to
apprenticeships, through the operation of the awarding
body's approved labor compliance program, as specified.
ANALYSIS :
Existing law:
CONTINUED
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1. Requires, generally, the payment of prevailing wages, as
defined, on public works contracts over $1,000.
2. 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.
3. Specifies that an approved LCP must meet the following
criteria:
A. All bid invitations and public works contracts
issued must contain appropriate language about the
requirements of the public works chapter of the Labor
Code.
B. A pre-job conference shall be conducted with the
contractor or subcontractors to discuss federal and
state labor law requirements applicable to the
contract.
C. 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.
D. The LCP shall review and, if appropriate, audit
payroll records to verify compliance with the public
works chapter of the Labor Code.
E. The LCP shall require the awarding body to
withhold contract payments when payroll records are
delinquent or inadequate.
F. 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.
4. 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
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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.
5. Authorizes the Director of the Department of Industrial
Relations (DIR) to appoint assistants necessary to
effectuate the purposes of state law governing
apprenticeships.
This bill:
1. Provides that an awarding body that implements a labor
compliance program may, with the approval and at the
discretion of the Chief of the Division of
Apprenticeship Standards (DAS), assist the Director of
DIR in the enforcement of a specified provision of law
(Section 1777.5 of the Labor Code) related to the
employment of apprentices on public works projects under
the terms and conditions prescribed by the Chief of DAS.
2. Specifies that a contractor may appeal the result of any
subsequent enforcement action through the appellate
process set forth under existing law.
3. 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
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 the Labor Code relating
to prevailing wage issues, the enforcement of
apprenticeship standards is under the jurisdiction of DAS.
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Giving labor compliance officers the authority to enforce
apprenticeship standards, in specified circumstances and
with approval of the Chief of DAS, 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
DIR joint enforcement of $150-$200
$300-$400 $300-$400 General
apprenticeship standards
SUPPORT : (Verified 8/27/09)
Mayor Antonio Villaraigosa, City of Los Angeles (source)
American Federation of State, County and Municipal
Employees
State Building and Construction Trades Council of
California
OPPOSITION : (Verified 8/27/09)
Western Electrical Contractors Association
ARGUMENTS IN SUPPORT : The author, bill's sponsor, and
supporters of this bill state that LCPs often discover
numerous violations of the laws relating to
apprenticeships. DAS 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
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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. This bill allows 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.
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Blumenfield, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jones, Krekorian, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, Nestande,
John A. Perez, V. Manuel Perez, Portantino, Price,
Ruskin, Salas, Saldana, Skinner, Solorio, Swanson,
Torlakson, Torres, Torrico, Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman,
Harkey, Jeffries, Knight, Logue, Miller, Niello, Nielsen,
Silva, Smyth, Audra Strickland, Tran, Villines
NO VOTE RECORDED: Block
AGB:mw 8/28/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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