BILL ANALYSIS Ó
AB 514
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 514 (Roger Hernandez) - As Amended: April 27, 2011
Policy Committee: Labor and
Employment Vote: 5-1
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill clarifies the definition of "hauling refuse" for the
purposes of prevailing wage statute. Specifically, this bill:
1)Defines "hauling refuse" as including, but not limited to,
hauling materials other than bona fide commodities sold at
fair market value from a public work site.
2)Defines "bona fide commodity" as a commodity for which a
publicly traded commodity market exists, such as copper,
steel, or aluminum.
FISCAL EFFECT
1)Minor, absorbable costs to the Department of Industrial
Relations (DIR) to enforce this measure.
2)To the extent this measure leads to an increase in the number
of prevailing wage fines issued by DIR, there will an increase
in special fund revenue. Likewise, this measure may cause a
minor increase in local government contract costs (non-state
reimbursable mandate), assuming contractors/subcontractors are
not currently paying a prevailing wage to workers hauling
refuse.
COMMENTS
1)Background . According to DIR, California's prevailing wage
rate is the basic hourly rate paid on public works projects to
a majority of workers engaged in a particular craft,
classification or type of work within the locality and in the
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nearest labor market area (if a majority of such workers are
paid at a single rate). If there is no single rate paid to a
majority, the single or modal rate being paid to the greater
number of workers is prevailing. DIR further notes that the
prevailing wage is determined by the Director of DIR in
written determinations issued annually on February 22 and
August 22. Existing law establishes penalties for
contractors/subcontractors who fail to pay the prevailing wage
to workers, as specified.
Existing law defines "public works" as construction,
alteration, demolition, installation, or repair work done
under contract and paid for in whole or in part out of public
funds, except work done directly by any public utility
company, as specified. Statute also defines "public works" to
mean the hauling of refuse from a public works site to an
outside disposal location, with respect to contracts involving
any state agency, including the California State University
and the University of California, or any political subdivision
of the state (i.e., any county, city, district, public housing
authority, or public agency of the state, and assessment or
improvement districts).
2)Purpose . Proponents of this measure (California State
Building Trades and California Teamsters) contend that some
contractors, despite current statute, do not pay a prevailing
wage to workers hauling refuse. Specifically, they contend
contractors are selling refuse hauled from public work sites,
often for minuscule fee, and then do not pay the worker that
hauled the refuse the prevailing wage. The contractor
provides the employee the rational that the material hauled
away had some value and as such, it is not refuse.
3)DIR interpretation of prevailing wage and refuse hauling . In
October 2008, DIR issued a public works determination
regarding prevailing wage statute and the hauling of refuse.
Specifically, DIR was asked to comment on whether or not a
contractor was required to pay a prevailing wage to truck
drivers hauling debris from a construction site to a landfill.
DIR states: "The apparent intent of the Legislature in
enacting section 1720.3 was to include within the definition
of 'public works' the hauling of any refuse that was part of
the construction project." (83 Ops. Cal.Atty.Gen. 166, 168-169
(2000).) Consistent with long-standing Department
interpretation, the term "refuse" encompasses "anything
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discarded or rejected as useless or worthless; trash." (See
American Heritage Dict. (new college ed. 1979) p. 1095).)"
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081