BILL ANALYSIS �
SB 644
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Date of Hearing: June 22, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
SB 644 (Hancock) - As Amended: June 15, 2011
SENATE VOTE : 37-0
SUBJECT : Public works: volunteers.
SUMMARY : Extends a public works exemption for specified
"volunteers" and other related individuals. Specifically, this
bill :
1)Extends the sunset date on the exemption to January 1, 2017.
2)Eliminates a provision of the law that required the Department
of Industrial Relations (DIR) to submit a specified report to
the Legislature before January 1, 2011, regarding volunteers
on public works projects.
EXISTING LAW :
1) Requires the prevailing wage rate to be paid to all workers
on public works projects over $1,000.
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.
3) Provides that the provisions of existing law dealing with the
payment of prevailing wages on public works projects do not
apply to work performed by a volunteer or volunteer
coordinator, as defined.
4) Defines a "volunteer" as an individual who performs work for
civic, charitable, or humanitarian reasons for a public
agency or 501 (c)(3) tax-exempt organization without promise,
expectation, or receipt of any compensation for work
performed.
5) Defines a "volunteer coordinator" as an individual paid by a
corporation or 501(c)(3) tax-exempt organization to oversee
or supervise volunteers.
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6) Clarifies that an individual may be considered a "volunteer
coordinator" even if the individual performs some
non-supervisory work on a project alongside the volunteers,
so long as the individual's primary responsibility is to
supervise.
7) Specifies that an individual shall be considered a volunteer
only when his or her services are offered freely and without
pressure and coercion, direct or implied, from an employer.
8) Authorizes a volunteer to receive reasonable meals, lodging,
transportation, and incidental expenses or nominal
non-monetary awards if those benefits and payments are not a
substitute form of compensation.
9) Excludes from the definition of volunteer an individual if
that person is otherwise employed for compensation at any
time (a) in the construction, alteration, demolition,
installation, repair, or maintenance work on the same
project, or (2) by a contractor, other than a 501(c)(3)
tax-exempt organization, that is receiving payment to perform
construction, alteration, demolition, installation, repair or
maintenance work on the same project.
10)Provides that the provisions of existing law dealing with the
payment of prevailing wages on public works projects do not
apply to work performed by members of the California
Conservation Corps or a certified Community Conservation
Corps.
11)Provides a January 1, 2012 sunset date to these provisions.
12)Requires DIR to submit a specified report to the Legislature
before January 1, 2011, regarding volunteers on public works
projects.
FISCAL EFFECT : Unknown
COMMENTS : This bill revisits an issue that arose in 2004
concerning the use of volunteer labor on certain public works
projects. Much of the attention that arose at that time was a
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result of an enforcement action taken by the DIR in July 2003 in
relation to a stream restoration project in Shasta County.
Brief Background on California Prevailing Wage Law
A feature of California law since the 1930s, existing law
generally requires that prevailing wages be paid to all workers
employed on public works projects. (Labor Code Section 1771).
Current law defines a "public work" as construction, alteration,
demolition, installation, or repair work done under contract and
paid for in whole or in part out of public funds. (Labor Code
Section 1720).
Advocates of prevailing wage laws generally argue that such
protections serve two important functions. First, such laws
ensure that skilled workers employed in public works projects
are paid at least the wages and benefits that "prevail" in their
local communities. Second, proponents of prevailing wages argue
that such laws make sure that unscrupulous contractors do not
import unskilled or low skilled workers from other parts of the
country who would undercut the local workforce by working for
lower pay.
SB 975 (Alarcon), Chapter 1048, Statutes of 2002, among other
things, established a definition of "paid for in whole or in
part out of public funds" that conformed to several precedential
coverage decisions made by DIR. These coverage decisions
defined payment by land, reimbursement plans, installation,
grants, waiver of fees, and other types of public subsidy as
"public funds" for purposes of prevailing wage law.
The Labor Code also sets forth a statutory methodology for
determining the prevailing wage rate. (Labor Code Section
1773.9). This methodology defines the prevailing rate as the
single rate being paid 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. Where no single
rate is being paid to a majority of workers the prevailing rate
is the single rate being paid to the greatest number of workers
(also referred to as the "modal rate").
The Prior Labor Code Public Works "Volunteer" Exemption
Prior to 2004, Section 1720.4 of the Labor Code, originally
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enacted in 1989, provided that "public works" shall not include
any otherwise covered work that meets all of the following
conditions:
a) The work is performed entirely by volunteer labor.
b) The work involves facilities or structures which are, or
will be, used exclusively by, or primarily for or on behalf
of, private nonprofit community organizations including,
but not limited to, charitable, youth, service, veterans,
and sports groups or associations.
c) The work will not have an adverse impact on employment.
d) The work is approved by the Director of Industrial
Relations as meeting the requirements of this section.
The previous section 1720.4 also required the Director of DIR to
request information on whether or not the work will have an
adverse impact on employment from the appropriate local or state
organization of duly authorized employee representatives of
workers employed on public works.
The July 2003 DIR Enforcement Action
In fiscal year 20010-01, the Department of Water Resources
provided grant funding to the Sacramento Watersheds Action Group
for a stream restoration project on Sulphur Creek in the City of
Redding. According to media reports, students from nearby
Shasta College were used for various activities including
planting seeds, clearing brush, repairing culverts, installing
rock beds to prevent erosion, and trash removal. The students
reportedly earned course credit for classes in watershed
restoration.
Responding to a complaint from a local labor organization, DIR
investigated and determined that, based on the submitted job
descriptions of the work performed by students and volunteers,
prevailing wages were required for the following work: willow
staking, spreading seeds and mulch, planting shrubs, operating
heavy equipment, site cleanup, off-hauling garbage, and planting
vegetation. The subsequent DIR enforcement action assessed back
wages and civil penalties.
In September 2003, the Department of Water Resources (DWR)
issued a memorandum that stated, "Due to the serious
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implications to our programs that would arise from being unable
to support volunteerism, DWR is taking a conservative approach
until these issues can be clarified?We will not enter into any
new contracts possibly affected by these issues until we have a
clearer picture of the obligations of DWR and the grantees under
the Labor Code."
The 2004 Legislative Amendments to Labor Code Section 1720.4
Following the July 2003 enforcement action, there was an outcry
among many in the environmental community that the prior Labor
Code Section 1720.4, as interpreted by DIR, effectively
prohibited the mixed use of volunteer and paid labor on public
works projects.
After lengthy negotiations between the environmental community
and representatives of organized labor, the Legislature enacted
AB 2690 (Hancock), Chapter #330, Statutes of 2004. AB 2690
amended Labor Code Section 1720.4 into its current form.
In order to address concerns that there may be abuses of any
"volunteer" exemption to California's prevailing wage laws, AB
2690 contained a January 1, 2009 sunset date.
The 2008 Sunset Extension and DIR Report
AB 2537 (Furutani) of 2008 extended the sunset date until
January 1, 2012.
In addition, AB 2537 required DIR to submit a specified report
to the Legislature before January 1, 2011, regarding volunteers
on public works projects. According to this report (which was
recently released), there was one complaint involving volunteer
labor on public works projects in 2009 and 2010. In that case,
a complaint was filed against a contractor for failing to
provide payroll reports for electrical work done in a firehouse.
However, the fire chief for that district issued a statement
confirming that eight volunteer firefighters were completing the
electrical work on the firehouse.
Prior to that complaint, the only report of abuse received by
DIR was the initial complaint from 2003.
ARGUMENTS IN SUPPORT :
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In a letter expressing sponsorship of the bill, the California
Park and Recreation Society (CPRS) writes that, during these
difficult fiscal times, it is critical that volunteerism and the
volunteer ethic are harnessed and channeled to assist local
governments in completing important projects. CPRS notes that
this bill will continue to ensure that the necessary resources
are brought to bear on enhancing the state's local park
infrastructure and grant local communities with the latitude to
develop and maintain park projects utilizing volunteers.
REGISTERED SUPPORT / OPPOSITION :
Support
Association of California Water Agencies
California Association of School Business Officials
California Outdoor Heritage Alliance:
Alpen Optics
Bay Point Rod and Gun Club
Black Point Sports Club
California Association of Four Wheel Drive Clubs, Inc.
California Bowmen Hunters/State Achery Association
California Chapter-Foundation for North American Wild Sheep
California Correctional Peace Officers Association
California Deer Association
California Hawking Club
California Houndsmen for Conservation
California Off-Road Vehicle Association
California Retriever Training Association
California Sportsmen Radio
California State Chapter NWTF
California Waterfowl Association
Cal-Ore Wetlands & Waterfowl Council
Cordova Shooting Center
Country Reflections
Delta Waterfowl Foundation
Duncans Gunworks
Escondido Fish and Game Association
Garcia's Hunting Preserve
Hornady
Jeff Robles & Associates
Jesses Hunting Forum
Jiffy Lube-Greater Sacramento Area
Kids Outdoor Sports Camp
Lower Sherman Island Duck Hunters Association
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Mendocino Blacktail Association
Mule Deer Foundation
National Open Field Coursing Association
National Wild Turkey Federation
Northern San Joaquin Valley Safari Club International
Orion Multimedia
Pheasants Forever Yolo County Chapter
Raahauge's Shooting Enterprises
Red Bank Outfitters
Rocky Mountain Elk Foundation
Sacramento Safari Club
San Diego County Wildlife Federation
San Francisco Bay Area Chapter Safari Club International
Southern California Gun
Sportsmen in Labor Coalition
Sportsmen's Council of Central California
Susiun Resource Conservation District
The Black Brant Group, Inc.
The California Legislature Outdoor Sporting Caucus
The Westervelt Company
Tulare Basin Wetlands Association
Turners Outdoorsman
US Sportsmen's Alliance
Wildcats Enterprises
Wilderness Unlimited
Wilderness Unlimited Foundation
California Park and Recreation Society
California State Parks Foundation
California Watershed Network
East Bay Municipal Utility District
Friends of San Jose Family Camp
League of California Cities
Newport Bay Conservancy
Regional Council of Rural Counties
Sacramento County Board of Supervisors
Opposition
None on file.
Analysis Prepared by : Shannon McKinley / L. & E. / (916)
319-2091
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