California Legislature—2013–14 Regular Session

Assembly Bill No. 1741

Introduced by Assembly Member Frazier

February 14, 2014

An act to amend Section 1742.1 of the Labor Code, relating to public works.

LEGISLATIVE COUNSEL’S DIGEST

AB 1741, as introduced, Frazier. Public works: prevailing wage rates: wage and penalty assessments.

Existing law generally requires the payment of the prevailing rate of per diem wages for work of a similar character in the locality in which the public work, as defined, is performed and the prevailing rate for holiday and overtime work fixed to employees employed on public works projects that cost more than $1,000. Existing law requires the Labor Commissioner to issue a civil wage and penalty assessment to a contractor or subcontractor, or both, if the Labor Commissioner determines, after investigation, that the contractor or subcontractor, or both, violated the laws regulating public works contracts, including the payment of prevailing wages. Existing law permits the affected contractor or subcontractor to obtain review of a civil wage and penalty assessment or a notice of withholding, as defined. Existing law provides that, after 60 days following the service of a civil wage and penalty assessment or notice, the affected contractor, subcontractor, and surety on a bond issued to secure the payment of wages, as provided, become liable for liquidated damages in an amount equal to the amount of unpaid wages, as specified. Existing law authorizes a contractor, subcontractor, or surety to deposit the full amount of the assessment or notice, including penalties, with the Department of Industrial Relations to hold in escrow pending administrative or judicial review and to be distributed, as specified. Under existing law, if so deposited, there would be no liability for liquidated damages.

This bill would specify that a contractor, subcontractor, or surety may deposit the full amount of the assessment or notice with the Department of Industrial Relations in the form of cash or a bond.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1742.1 of the Labor Code is amended to
read:

1742.1.  

(a) After 60 days following the service of a civil wage
and penalty assessment under Section 1741 or a notice of
withholding under subdivision (a) of Section 1771.6, the affected
contractor, subcontractor, and surety on a bond or bonds issued to
secure the payment of wages covered by the assessment or notice
shall be liable for liquidated damages in an amount equal to the
wages, or portion thereof, that still remain unpaid. If the assessment
or notice subsequently is overturned or modified after
administrative or judicial review, liquidated damages shall be
payable only on the wages found to be due and unpaid.

Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial grounds
for appealing the assessment or notice with respect to a portion of
the unpaid wages covered by the assessment or notice, the director
may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid
wages. Any liquidated damages shall be distributed to the employee
along with the unpaid wages. Section 203.5 shall not apply to
claims for prevailing wages under this chapter.

(b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations begin insert , in the form of cash or a bond end insert , within 60
days following service of the assessment or notice, for the
department to hold in escrow pending administrative and judicial
review. The department shall release begin delete such end delete begin insert the end insert funds begin insert in escrow end insert ,
plus any interest earned, at the conclusion of all administrative
and judicial review to the persons and entities who are found to
be entitled to begin delete such end delete begin insert those end insert funds.

(c) The Labor Commissioner shall, upon receipt of a request
from the affected contractor or subcontractor within 30 days
following the service of a civil wage and penalty assessment under
Section 1741, afford the contractor or subcontractor the opportunity
to meet with the Labor Commissioner or his or her designee to
attempt to settle a dispute regarding the assessment without the
need for formal proceedings. The awarding body shall, upon receipt
of a request from the affected contractor or subcontractor within
30 days following the service of a notice of withholding under
subdivision (a) of Section 1771.6, afford the contractor or
subcontractor the opportunity to meet with the designee of the
awarding body to attempt to settle a dispute regarding the notice
without the need for formal proceedings. The settlement meeting
may be held in person or by telephone and shall take place before
the expiration of the 60-day period for seeking administrative
review. No evidence of anything said or any admission made for
the purpose of, in the course of, or pursuant to, the settlement
meeting is admissible or subject to discovery in any administrative
or civil proceeding. No writing prepared for the purpose of, in the
course of, or pursuant to, the settlement meeting, other than a final
settlement agreement, is admissible or subject to discovery in any
administrative or civil proceeding. The assessment or notice shall
advise the contractor or subcontractor of the opportunity to request
a settlement meeting.

begin delete

(d) This section shall become operative on January 1, 2007.

end delete