Western Electrical Contractors Association, Inc.

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State Legislation

Thursday, September 05, 2019

The Senate Appropriations committee approved AB 5 (Gonzalez - D - San Diego) and the bill is now on the Senate floor. Gonzalez amended the bill for construction to establish that the holding in Dynamex does not apply to the relationship between a contractor and an individual performing work pursuant to a subcontract in the construction industry, and instead the determination of whether the individual is an employee of the contractor shall be governed by Section 2750.5 and the test adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc., if the contractor demonstrates that all of seven criteria are satisfied.
 
On the Senate floor is AB 403 (Kalra - D - San Jose) to the floor. This bill extends the time that a victim of workplace retaliation has to file a claim with the California Labor Commissioner from six months to two years and authorizes an attorneys' fee award to a worker who prevails on a whistleblower claim. AB 403 incentivizes litigation and provides for a one-sided provision of attorney's fees. California is already widely perceived as having a hostile litigation environment. One factor that contributes to this negative perception is the high award and threat of attorney's fees in civil litigation that often dwarfs the financial recovery the plaintiff actually receives.
 
The Senate passed AB 520 (Kalra) on a party-line vote. It is the building trades third attempt to define a public subsidy as "de minimis" for the purpose of paying the prevailing wage in public works projects if the subsidy is both less than $500,000 and less than 2% of the total project cost. The bill would specifically provide a public subsidy for a project that consists entirely of single-family dwellings is de minimis if it is less than 2% of the total project cost. CBIA has stated this narrow amendment is deceptive and an attempt to confuse Legislators (Squirrel!). These standards will apply for bids advertised or contracts awarded after July 1, 2020. AB 251 (Levine, 2015), was vetoed by Governor Brown; he stated in his veto message: "Longstanding practice has been to view [a] subsidy in context of the project and use 2% as a general threshold for determinations. There has been no showing that the current practice is unreasonable. While I remain a staunch supporter of prevailing wages I am concerned that this measure is too restrictive and may have unintended consequences."
 
Newson signed AB 595 (Medina - D - Riverside) that authorizes the use of an individual tax identification number for purposes of conducting background checks required by class or program for a student enrolled in a community college apprenticeship or internship training program who does not have a social security number.
 
The Senate passed Medina's AB 695 that extends the sunset on community college districts' (CCDs') authority to enter into design-build public works contracts and adopts the same "skilled and trained workforce" requirements applicable to the design-build authority of state agencies and local governments. The bill contains provisions that allow a contractor under a project labor agreement to be presumed to meet the requirements of using a skilled and trained workforce.
 
Newson signed AB 1019 (Frazier - D - Discovery Bay) that adds to the ex officio members of the Interagency Advisory Committee on Apprenticeship, the Director of Rehabilitation and the chair of the State Council on Developmental Disabilities. The bill would require the committee to create a subcommittee to address apprenticeship for the developmentally disabled community. The bill would add that it is the intent of the Legislature that the department will encourage greater participation for the developmentally disabled in apprenticeship and pre-apprenticeship programs.
 
Held on suspense was AB 1028 (Gonzalez) that would have required the California Energy Commission (CEC), in allocating grants to local educational agencies (LEAs) as part of the Proposition 39 - Clean Energy Job Creation Program to also give priority based on a LEA's utilization of apprentices from state-approved apprenticeship and pre-apprenticeship programs. The committee concluded "Cost pressure, potentially in the millions of dollars, to provide substantial funding for the purposes the California Clean Energy Jobs Act, as those purposes are modified by this bill."
 
Passed off of suspense was her AB 1066 that will permit striking workers to collect unemployment insurance (UI) benefits. The cursory analysis of the policy change indicated "annual ongoing costs to the Unemployment Insurance Trust Fund would likely be in the millions of dollars."
 
Awaiting action of the Governor is AB 1475 (Bauer-Kahan - D - Orinda) that authorizes regional transportation agencies (RTAs) to use the construction manager/general contractor (CM/GC) procurement method on any transportation project that is not on the state highway system.
 
The Senate passed AB 1558 (Ramos - D - Highland) that requires local school districts or schools planning college or career fairs to notify apprenticeship programs in their county utilizing contact information from the database of approved apprenticeship programs published by the Division of Apprenticeship Standards on its internet website.
 
Also on the floor is AB 1736 ( Daly - D - Anaheim) that will require departments and state agencies with an internet website, to post within 24 hours of awarding a construction contract, the name of the successful bidder, the amount of the successful bidder's bid, and the name of listed subcontractors and their subcontract amounts.
 
Part of the "housing solution" on the Assembly floor is SB 5 (Beall - D - San Jose) that establishes a mechanism that, when fully implemented, shifts up to $2 billion annually from local ERAFs to pay for projects approved under the Program for affordable housing, transit-oriented development, infill development, housing-related infrastructure, and other specified priorities. This indirectly requires the state to make annual GF adjustments to match any reductions in ERAF that would otherwise be used to support schools. While school funding is held harmless, the bill would reduce the amount of GF revenues available to support other state programs and services. The future is uncertain as the CFT and CTA are opposed to the ERAF shift.
 
Back in the Senate for concurrence is Beall's SB 128 that extends the existing best-value contracting pilot program until January 1, 2025. The bill also changes the date that a participating county must submit a report to the Legislature to March 1, 2024, and adds Santa Clara and Monterey counties to the existing pilot program.
 
The Assembly Appropriations Committee approved SB 524 (Stern - D - Canoga Park) Sponsored by California State Association of Electrical Workers, California State Pipe Trades Council, Western States Council Sheet Metal Workers, this bill requires the CPUC to ensure that work is performed by a skilled and trained workforce for projects receiving at least $50,000 in ratepayer-funded initiatives within a single facility. Undoubtedly because of her affection for anything union, Lorena Gonzalez is now a co-author. Stern claims "achievement of the state's energy and environmental goals through energy efficiency projects is jeopardized by use of unqualified workers to install these projects" but because he is a Democrat and the sponsors are construction unions - no proof is required.
 
Also on the Assembly floor is SB 530 (Galgiani- D - Stockton) that will require DLSE to develop recommendations for industry-specific harassment and discrimination prevention policy and training standard for use by employers in the construction industry. The bill will also require DIR to convene an advisory committee by March 1, 2020, consisting of specified representatives from the construction industry and state agencies to assist the division in developing the policy. Late amendments allow unionized construction industry employers to satisfy sexual harassment training and education requirements by verifying completion of specified training provided by a state-approved apprenticeship program, labor management training trust, or labor management cooperation committee.