BILL ANALYSIS �
AB 2677
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2677 (Swanson)
As Amended August 6, 2012
Majority vote
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|ASSEMBLY: |49-25|(May 7, 2012) |SENATE: |21-14|(August 23, |
| | | | | |2012) |
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Original Committee Reference: L. & E.
SUMMARY : Clarifies that certain employer payments do not
operate to constitute a violation of prevailing wage law.
The Senate amendments :
1)Change the term "fringe benefits" to "employer payments."
2)Make other technical and conforming changes.
AS PASSED BY THE ASSEMBLY , this bill specified 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 Senate Appropriations
Committee, this bill will result in $150,000 in annual
enforcement costs from the Labor Enforcement and Compliance
Fund.
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
AB 2677
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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 employer payment 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 the Department of
Industrial Relations (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: 0004947