Western Electrical Contractors Association, Inc.

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WECA Political Update August 20, 2020

Thursday, August 20, 2020

CFEC is holding their annual Sacramento event to raise funds to fight Project Labor Agreements next Thursday, August 27th at 4:30pm. At the event attendees have chance to win a Harley Davidson motorcycle that has been donated to help raise funds! Check out the video about the event and then fill out the response form if you wish to attend.

State Senator Scott Wiener loses Legislation due to State Building and Construction Trades Council Sen. Scott Wiener lost his fight with the State Building and Construction Trades Council over his Senate Bill 899. Wiener refused demands of the trades to mandate a Skilled and Trained Workforce. The bill was killed in Assembly Appropriations – chaired by Assembly Member Lorena Gonzalez (D-San Diego).

EV Charger Installation Update AB 841 (Ting D-San Francisco) was approved by the Senate Appropriations Committee this week. The most notable provision requires EV charging equipment funded by the CPUC, CEC, or CARB to be installed by at least one electrician (but not less than 25% of the work crew) who has passed the EV Infrastructure Training Program (EVITP). EVITP is an IBEW and NECA collaboration. IBEW is establishing a statutory monopoly for NECA contractors. The vote today was party-line with Senators Bates and Jones voting NO.

UC Board of Regents – Aiding and Abetting Tax Fraud? The UC Board of Regents was involved in a complicated transaction in which a taxpayer reported the sale of his term income interest in a charitable remainder trust to the UC Board of Regents for zero gain, resulting in the UC system receiving a $150,000 contribution and the taxpayer not paying tax on a realized gain of more than $2.1 million. The Office of Tax Appeals unanimously upheld a noneconomic substance transaction (NEST) penalty of $86,174, an interest-based penalty of $58,523, and applicable interest. Additionally, the OTA upheld the Franchise Tax Board’s decision to disallow the deduction for a charitable contribution of $150,000 to the University of California. The OTA concluded the $150,000 was “an accommodation fee for engaging in the transaction so that appellant could obtain tax benefits,” and thus was not a charitable contribution. I wonder if the Regents will consider if they should be engaging in this type of behavior – or take the $150 and run?

San Jose, San Diego Mayors Urge Reprieve for Uber and Lyft Two California mayors, San Jose Mayor Sam Liccardo and San Diego Mayor Kevin Faulconer, are urging courts to delay an order forcing Uber and Lyft to reclassify their drivers. A judge ordered Uber and Lyft last week to stop treating their drivers as independent contractors, siding with California Attorney General Xavier Becerra, who has sued the companies for violating California’s new worker classification law. The companies have said that if the order stands, they will need to suspend their operations in California once a 10-day stay of the injunction expires at the end of Thursday. Liccardo and San Faulconer sided with the firms in urging an appeals court to grant the companies' requests for a last-minute stay, advocating for an end to a “political standoff” that the mayors warned would “impose irreparable harm upon hundreds of thousands of residents whose lives and livelihoods daily depend on these services.” A 2018 California Supreme Court decision that was codified in state law and expanded via AB 5 (Gonzalez D- San Diego) likely means Uber and Lyft would need to reclassify their independent contractor drivers as employees. The companies could lose their legal challenge to AB 5, so they are turning to voters by funding Proposition 22, which would allow them to continue treating drivers as contractors while offering them some benefits. What’s next: A stay on appeal would have to happen by the end of Thursday, at which point the reclassification injunction takes effect. Update: Lyft announced today they would suspend service in California. Up-update: California's 1st Circuit Court of Appeal has stayed an order that would have forced Uber and Lyft to reclassify their drivers, giving the companies a reprieve just hours before they planned to halt operations in California rather than comply. [Politico]
Presidential Memorandum on Temporary Deferral of Employee Payroll Tax Obligations Raises More Questions Than Answers On August 8, 2020, President Donald Trump issued a “Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster” (the “Presidential Memo”) that directs the Secretary of Treasury to use his authority to defer the withholding, deposit, and payment of the employee share of Social Security taxes (the 6.2% tax on wages paid—not earned—up to $137,700 for 2020) on certain wages paid during the period of September 1, 2020, through December 31, 2020. The Presidential Memo proposes temporary deferral, not forgiveness, of Social Security tax obligations for some employees. Story

NLRB Division of Advice Dishes Some Guidance with Respect to COVID-Related ULP Charges The pandemic has thrown a number of obstacles at employers and employees as everyone attempts to navigate a novel situation. On August 13, 2020, the National Labor Relations Board (“NLRB”) Division of Advice (“Advice”), the agency’s internal think-tank, published five Advice Memoranda dismissing unfair labor practice charges against employers in connection with issues concerning the COVID-19 pandemic. The Memoranda were all drafted by Advice within the past two months, expanding upon the guidance previously released on July 15. Story

No Pay Cut for Me! According to the Sacramento BEE, Gov. Gavin Newsom said “he and the rest of the state government’s workforce would take 10% pay cuts" when he announced broad cuts to state spending in May because of the coronavirus outbreak. Those cuts for most state employees took effect last month, but Newsom did not reduce his own wages, according to pay data the State Controller’s Office provided in response to an information request from The Sacramento Bee. State Controller Betty Yee was the only one of the state’s eight elected constitutional officers — such as the treasurer, secretary of state and attorney general — to take a pay cut last month, according to the data.” Story (subscription may be required)