BILL ANALYSIS �
AB 2677
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Date of Hearing: April 18, 2012
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 2677 (Swanson) - As Amended: March 29, 2012
SUBJECT : Public works: wages: fringe benefit contributions.
SUMMARY : Clarifies that certain fringe benefit contributions
do not operate to constitute a violation of prevailing wage law.
Specifically, this bill specifies that an increased fringe
benefit contribution that results in a lower hourly straight
time or overtime wage shall not be considered a violation of the
applicable prevailing wage determination so long as all of the
following conditions are met:
1)The increased fringe benefit is made pursuant to criteria set
forth in a collective bargaining agreement.
2)The increased fringe benefit and hourly straight time and
overtime wage combined are no less that the general prevailing
wage rate.
3)The fringe benefit contribution is irrevocable unless made in
error.
FISCAL EFFECT : Unknown
COMMENTS : Current law requires that, except as specified, not
less than the general prevailing rate of per diem wages be paid
to workers employed on public works projects. Existing law
deems per diem wages to include specified employer payments and
provides that employer payments are a credit against the
obligation to pay the general prevailing rate of per diem wages.
Existing law, however, provides that credits for employer
payments do not reduce the obligation to pay the hourly straight
time or overtime wages found to be prevailing.
This bill would provide that an increased fringe benefit
contribution that results in a lower hourly straight time or
overtime wage is not considered to be a violation of the
applicable prevailing wage determination so long as specified
conditions are met.
This bill is sponsored by the California State Association of
AB 2677
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Electrical Workers and the Western States Council of Sheet Metal
Workers. The sponsors state the following in support of this
bill:
"Many collective bargaining agreements allow members to
elect to have a percentage or a set amount deducted from
their paycheck and deposited in a supplemental pension
account or a health care reserve at their discretion. The
Department of Industrial Relations has issued several
opinion letters finding that this does not constitute a
violation of the prevailing wage as long as the total
hourly package equals the correct prevailing wage rule.
Nonetheless, several local and state agencies have
misinterpreted the law and begun enforcement proceedings.
�This bill] seeks to codify the DIR opinion letters in
order to avoid future misapplication of the statutes."
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
California State Association of Electrical Workers
Western States Council of Sheet Metal Workers
California Chapters of the National Electrical Contractors
Association
California Legislative Conference of the Plumbing, Heating and
Piping Industry
Opposition
None on file.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091