BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 29, 2011 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 514
Author: Hernandez
Version: As amended April 27, 2011
SUBJECT
Public works: prevailing wage: hauling refuse
KEY ISSUE
Should the Legislature clarify what constitutes the "hauling of
refuse," for purposes of prevailing wage law, on a public works
project?
PURPOSE
To clarify that "hauling of refuse" does not include the hauling
of bona fide commodities for which there is a publicly traded
market.
ANALYSIS
Existing law :
1) Requires that not less than the general prevailing wage rate
be paid to all workers employed on a "public works" project
costing over $1,000 dollars and imposes misdemeanor penalties
for a violation of this requirement.
2) Defines "public work" to include, among other things,
construction, alteration, demolition, installation or repair
work done under contract and paid for in whole or in part out
of public funds. (Labor Code §1720)
3) Also defines "public works," as 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.
This Bill would add clarify to the definition of "hauling of
refuse" for purposes of prevailing wage law. Specifically, this
bill would:
1)Provide that "hauling of refuse" includes the hauling of
materials other than bona fide commodities sold at fair market
value from a public works site.
2)Specify that a "bona fide commodity" is a commodity for which
there exists a publicly-traded commodity market, such as
copper, steel or aluminum.
COMMENTS
1. Need for this bill?
Existing law requires that not less than the general
prevailing wage rate of per diem wages, as determined by the
director of the Department of Industrial Relations (DIR), be
paid to all workers employed on a public works projects. The
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 nearest labor market area.
As discussed above, current 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." Under Labor Code section 1720.3, "public
works also means the hauling of refuse from a public works
site to an outside disposal-location, with respect to
contracts involving any state agency?or any political
subdivision of the state."
Hearing Date: June 29, 2011 AB 514
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
In a recent public works coverage determination (Friendly
Inn/Senior Center Abatement and Demolition Project, City of
Morgan Hill. DIR Public Works Case No. 2008-027), the
Department of Industrial Relations (DIR) stated the following:
"The off-haul of 'refuse' from a public works site to an
outside disposal location is subject to prevailing wage
requirements under section 1720.3. '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 discarded or rejected as useless or
worthless; trash.' (See American Heritage Dict. (new
college ed. 1979) p. 1095).)"
According to the author, although statute exists that
guarantees prevailing wages for transporting refuse from
public worksites to offsite locations, many workers do not
receive the wages that they are due as a result of loopholes
that circumvent this mandate. This bill is needed to clarify
that "hauling of refuse" includes the hauling of materials
other than bona fide commodities sold at fair market value;
and defines a "bona fide commodity" as one for which there
exists a publicly-traded commodity market, such as copper,
steel or aluminum.
2. Proponent Arguments :
According to the author and proponents, current law requires
that workers employed at public works sites be subject to
prevailing wage for transporting refuse from the worksite to
an offsite location. Unfortunately, proponents contend, some
unscrupulous employers have rendered this provision
meaningless by selling refuse hauled from public works sites
for a nominal fee, a whole load for $1 for instance, and then
refusing to pay the prevailing wage. According to proponents,
the rationale behind this practice is that since the material
hauled away had "some value," it was no longer refuse.
Hearing Date: June 29, 2011 AB 514
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
Proponents argue that these loopholes are often exploited to
cut corners and deny workers their just compensation. In
order for existing statute to have a real effect, the act of
hauling refuse needs to be defined. This bill will address
this fraudulent practice by clarifying that refuse will be
characterized as such unless the material is legitimately
worth something and is sold for fair market value.
3. Opponent Arguments :
Opponents contend that this bill would expand the prevailing
wage requirement for public contracts to the hauling of
municipal solid waste. They argue that this bill could
substantially increase the cost of services provided to
schools and other public facilities that have not been
factored into contractual agreements and would increase the
costs of services to public agencies. Opponents also argue
that this bill unnecessarily expands prevailing wage coverage
of refuse hauling to the hauling of waste from a job site that
is going to be sold as a recyclable commodity rather than
trashed. According to opponents, efforts should be focused on
encouraging the recycling of construction debris rather than
endorsing legislation to restrict recycling of these
materials.
SUPPORT
State Building and Construction Trades Council of California
(Co-Sponsor)
California Teamsters Public Affairs Council (Co-Sponsor)
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Labor Federation
Chauffeurs, Teamsters and Helpers, Local No. 150
Engineers and Scientists of California
International Longshore & Warehouse Union
Professional & Technical Engineers, Local 21
Teamsters Local 853
UNITE HERE!
Hearing Date: June 29, 2011 AB 514
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
United Food and Commercial Workers Union, Western States Council
OPPOSITION
Associated Builders and Contractors of California
CR&R Incorporated (recycling and waste management firm)
Hearing Date: June 29, 2011 AB 514
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations