BILL ANALYSIS �
AB 2677
Page 1
ASSEMBLY THIRD READING
AB 2677 (Swanson)
As Amended March 29, 2012
Majority vote
LABOR & EMPLOYMENT 5-1 APPROPRIATIONS 12-5
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|Ayes:|Swanson, Alejo, Bonnie |Ayes:|Fuentes, Blumenfield, |
| |Lowenthal, Gorell, Yamada | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Morrell |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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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 : According to the Assembly Appropriations
Committee, this bill will result in minor and absorbable costs
to the Department of Industrial Relations (DIR) to implement
this measure.
COMMENTS : Current law requires that, except as specified, not
less than the general prevailing rate of per diem wages be paid
AB 2677
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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
Electrical Workers and the Western States Council of Sheet Metal
Workers. The sponsors state that 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 sponsors state that DIR 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. This bill
seeks to codify the DIR opinion letters in order to avoid future
misapplication of the statutes.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0003436