The California legislature has enacted a number of laws that impact prevailing wage requirements, including provisions that affect charter cities, requirements to inform the Labor Commissioner of the completion of public works projects, exposure to liquidated damages for prevailing wage violations, and applying prevailing wage requirements to refinery construction projects. These laws went into effect on January 1, 2014, and are summarized below.
Charter cities that don’t require prevailing wages risk losing state funding
Senate Bill 7 (SB 7) prohibits a charter city from receiving or using state funding or financial assistance for a construction project if (1) the charter city has a voter-approved charter provision or ordinance that authorizes a contractor to not comply with state prevailing wage requirements on local construction projects funded by city funds, or (2) the charter city has awarded, within the prior 2 years, a public works contract without requiring the contractor to comply with state prevailing wage requirements. Exemptions apply for construction projects under $25,000 and alteration, demolition, repair and maintenance projects under $15,000. SB 7 was enacted following a recent decision by the California Supreme Court (See State Building and Construction Trades Council of California, AFL-CIO v. City of Vista (2012) 54 Cal.4th 547, available here), which held that under the California Constitution, the wage levels of workers employed by charter cities on locally funded public works projects are a “municipal affair” rather than a matter of “statewide concern,” and as such are not subject to state regulation. Look for future litigation challenging SB 7.
Notice of project completion to Labor Commissioner; longer period for civil wage and penalty assessment actions
Previously, a Notice of Completion of a public work project was required to be filed with a county recorder. Under AB 1336 and SB 377, the notice of completion must also be provided to the Labor Commissioner. Similarly, the agency that accepts the public work project must also provide notice of that acceptance to the Labor Commissioner. These new laws also significantly extend the deadline for the Labor Commissioner to serve a civil wage and penalty assessment to the contractor or subcontractor alleging a violation of the prevailing wage law from 180 days to 18 months after the filing of a valid notice of completion with the applicable county recorder, or after acceptance of the public work, whichever occurs last. Finally, if the notice of completion is not given in a timely manner to the Labor Commissioner, the deadline to serve an assessment is tolled for the length of the delay in providing such notice.
New liquidated damages and civil penalties
AB 1336 also allows a court to award liquidated damages and civil penalties for prevailing wage violations to an underpaid employee. Previously, this type of relief was only available through an administrative action brought by the Labor Commissioner.
Changes in certified payroll record disclosures
Previous law (Labor Code section 1776) required contractors to maintain payroll records relating to public works projects and produce the records when required to a joint labor-management committee. The records were required to be redacted to remove names and social security numbers. AB 1336 provides that only the redaction of social security numbers is now required. AB 1336 also provides that a joint labor-management committee now has 18 months (rather than 180 days) after the filing of a valid notice of completion with the applicable county recorder, or after acceptance of the public work, whichever occurs last, to bring an action against any employer who fails to pay prevailing wages.
New deadlines for the DIR to issue prevailing wage coverage determinations
Finally, SB 377 establishes deadlines in which the Director of the Department of Industrial Relations must respond to a request for a prevailing wage coverage determination (generally within 6 months of the request). SB 377 also tolls the period for service of civil wage and penalty assessments from the DIR and enforcement actions by joint labor-management committees for the period of time required by the Director of the Department of Industrial Relations to make a coverage determination and the period of time that a contractor or subcontractor fails to provide certified payroll records.
Prevailing wages now applicable to refinery construction projects
SB 54 extends prevailing wage requirements to refinery construction projects, excluding oil and gas extraction operations, and mandates education requirements for workers. The law applies to an owner or operator of a stationary source, as defined in Code 324110 or 325110 of the North American Industry Classification System (NAICS), that is engaged in certain activities for petroleum processes requiring a Risk Management Plan reviewed by the California Environmental Protection Agency. Specifically, when constructing, altering, demolishing, installing, repairing or completing maintenance work at a stationary source, the owner or operator must pay skilled and trained contractors and subcontractors prevailing hourly wages. SB 54 also requires the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations to approve a curriculum of in-person classroom and laboratory instruction for approved advanced safety training for workers at high hazard facilities by January 1, 2016.