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WECA Political Update June 20, 2024

Thursday, June 20, 2024

PAGA Deal California’s crowded November ballot will have one fewer question after business and employee groups resolved a dispute over a law workers commonly use to sue their employers. Newsom’s office announced Tuesday's agreement to rework the Private Attorneys General Act or PAGA, which lets workers sue employers on the state’s behalf. The California Chamber of Commerce has argued that the law leads to frivolous and expensive lawsuits, while the California Labor Federation counters that it’s an important tool for maintaining respect for workers’ rights. The agreement makes changes intended to reduce the number and scope of suits brought under the law, gives employers more chances to fix problems outside court, and caps some penalties. At the same time, it increases penalties for the worst offenders and awards a greater share of the payout to wronged employees — 35 percent of the total instead of 25 percent. The deal comes after weeks of behind-the-scenes conversations involving Newsom’s team and Democratic lawmakers. They are expected to pass legislation codifying the deal before next week’s deadline to remove qualified measures from the ballot.

Biden Rule Weaponizes IRS to Steer Clean Energy Construction Projects to Union Donors Associated Builders and Contractors issued a statement regarding the Internal Revenue Service’s final rule released for public inspection on June 18, which requires private developers to follow onerous project labor agreement, prevailing wage and apprenticeship policies when building clean energy projects funded by more than $270 billion in tax credits via the ABC-opposed Inflation Reduction Act. According to the final rule, developers must certify that their contractors pay all construction workers prevailing wages and benefits determined by the U.S. Department of Labor following the federal Davis-Bacon Act. Developers must also ensure that contractors utilize apprentices enrolled in government-registered apprenticeship programs for 15% of all construction labor hours performed on a project, among other requirements. Project developers that satisfy these new provisions are eligible for a 500% increase in various clean energy construction project tax credits compared to baseline tax credits offered to developers under prior regulations widely used by industry. In addition, developers that require contractors to execute PLAs with labor unions are immune from new monetary penalties if the developer and its contractors fail to meet cumbersome prevailing wage and apprenticeship rules. Story

Workplace Safety Reshuffle The Occupational Safety and Health Standards Board bucked the Newsom administration in March, criticizing how it handled long-delayed indoor heat rules. Now, the administration is pushing back. Four months ago, the Board was expected to approve the rules for employers to protect workers from extreme indoor heat. The night before the meeting, the Newsom administration withdrew its support, citing cost concerns. Two board members who were among the most outspoken critics of the administration’s move have been reshuffled. Chairperson Dave Thomas has been demoted (replaced by antitrust attorney Joseph Alioto). Laura Stock has been removed, which she said she learned in a phone call last Friday. Stock has served on the board since 2012 and is a researcher and director of the UC Berkeley Labor and Occupational Health Program. In March, she called the administration’s action “completely outrageous.”

Pension Bailout In its third pension bailout, the Pension Benefit Guaranty Corporation (PBGC) announced recently that it had approved $10.6 million in taxpayer funds for the Arizona Bricklayers' Pension Trust Fund. The fund, based in Phoenix, Arizona, covers 666 participants in the construction industry and was expected to run out of money in 2041. Thursday's announcement follows two other recent bailout announcements by the PBGC. The PBGC announced it approved approximately $545.6 million in special financial assistance (SFA) to the CWA/ITU Negotiated Pension Plan (CWA/ITU Plan), based in Mount Laurel, New Jersey. The plan, which covers 24,288 participants in the printing industry, was projected to become insolvent and run out of money in 2029. The PBGC also announced Tuesday that it approved special financial assistance for another failing Teamsters pension plan. The Teamsters Local 102 Plan, based in Cherry Hill, New Jersey, and covering 508 transportation industry participants, will receive approximately $12.4 million. "As of June 13, 2024, PBGC has announced approval of about $54.6 billion in SFA to plans that cover about 818,000 workers, retirees, and beneficiaries," the PBGC noted. "Special financial assistance for financially troubled multiemployer plans is financed by general taxpayer monies." Just this week, the PBGC announced it would be providing $568.6 million in taxpayer money to only three underfunded union pension plans. Go here for prior posts about the PBGC's taxpayer-funded pension bailouts.

EEOC Releases Anti-Harassment Guide for Contractors The Equal Employment Opportunity Commission released a guide to help construction leaders prevent and address harassment on the job. “Promising Practices for Preventing Harassment in the Construction Industry” is part of the EEOC’s ongoing focus to address bias within the building sector. More

Lawmaker Spent $75K In Campaign Cash On 49ers, Giants, Warriors Tix Assemblyman Matt Haney had one hell of a weekend in late January. The state assemblymember and avid sports fan partied Saturday evening at Cavana, a beautiful rooftop bar in Mission Bay specializing in Colombian cuisine and fruity cocktails. Haney dropped a few hundred bucks on food and drinks and watched LeBron James and Steph Curry duel it out at Chase Center in a double-overtime thriller. The next morning, Haney got $158 of booze at Tenderloin Liquor and headed down to Santa Clara to watch the San Francisco 49ers battle the Detroit Lions for a trip to the Super Bowl. He pregamed at a tailgate party outside of Levi’s Stadium, smoking a stogie as he took a picture with Supervisor Shamann Walton. Story

Labor Board May Impose Union on Mercedes Workers Despite Employee Vote against UAW On May 17, workers at the Mercedes Benz plant in Vance, Alabama, voted against joining the United Auto Workers, with 56% of the voters choosing not to unionize and 90% voter turnout. Despite this decisive vote, the UAW may still be forced on the Mercedes workers. Story

Legislature Wraps Session, Closes Budget Gap, Continues ACA The second regular session of the Arizona 56th Legislature ended on Saturday night, finally adjourning sine die. Here’s the session and the business community’s perspective on the last six months. Story

Mistake No. 4 of the Top 10 Horrible, No-Good Mistakes Construction Lawyers Make: Not Knowing When to Fold ‘Em The following is mistake No. 4 of the top 10 mistakes lawyers make in construction disputes. Story

A Battle Looms Over Fair Funding for School Construction In the coming days, Gov. Gavin Newsom is expected to confirm his commitment to place a state school construction bond on the November ballot. He hasn’t committed to anything yet, but he must decide in the next ten days whether to reform a method of sharing state-matching money that has long favored property-rich districts over their property-poor neighbors. Story

Thirty seats are up for grabs in the Arizona Senate in 2024. Here's what to know about the incumbents and who's running ahead of the July 30 primary.

Utah Climate Skeptic Lee Closes in On Top Senate Energy Role Politico reports that “Congressional Republicans who have sought to soften their party’s opposition to climate change action in recent years may be poised to elevate one of their most outspoken skeptics to lead a prominent Senate panel. Sen. Mike Lee (R-Utah) has been a fierce conservative and perennial thorn in the side of leadership of both parties since arriving in the Senate in 2011. And despite some prominent GOP members’ efforts to craft a Republican-style policy on climate change, Lee looks likely to lead the party on the powerful Energy and Natural Resources Committee — and wield the gavel if Republicans win control of the chamber in November’s election.”


AB 107 (Gabriel) Budget bill was approved by the Legislature on 6/15. Included two “pork barrel” projects with PLAs. WECA Position: Oppose

AB 1957 (Wilson - D) Authorizes any county of the state to use the “best value” method for construction projects over $1 million and job order contracts up to $3 million until January 1, 2030. Devoid of State Building and Construction Trades Council language. Approved by Legislature on 6/13 WECA Position: Support

AB 1976 (Haney - D) Requires, on or before July 1, 2027, the Occupational Safety and Health Standards Board to draft and adopt a rulemaking proposal to revise a standard on first aid materials to require all workplace first aid materials to include naloxone hydrochloride or another opioid antagonist, as specified, to reverse opioid overdose with instructions for using the opioid antagonist. Passed by Senate Labor on 6/12. WECA Position: Oppose Unless Amended

AB 2135 (Schiavo - D) Extends the statute of limitations on complaints submitted to the Labor Commissioner from 18 to 24 months. Allows the Labor Commissioner to continue ongoing investigations beyond the statute of limitation for good cause. Prohibits an open investigation from being closed solely due to the statute of limitations being reached. Passed by Senate Labor on 6/12. WECA Position: Oppose

AB 2179 (Davies - R) Requires a school district, county office of education, or charter school to, at the beginning of the first semester or quarter of each school year, provide information on local apprenticeship programs to pupils in grades 11 and 12. Passed by Legislature on 6/13. WECA Position: Support

AB 2182 (Haney - D) Allows the prevailing wage applicable to a public works project to be adjusted when an updated wage rate is determined by the Department of Industrial Relations (DIR) director, recasts the method for annualizing benefit computations, and repeals any previously issued determinations. Passed by Senate Labor on 6/12. WECA Position: Oppose

AB 2499 (Schiavo - D) Entitles an employee with a family member who is a victim of crime to job-protected leave to attend to the family member’s needs and ensure their safety. Additionally, it permits both the employee victim and the employee who has a family member who is a victim to use sick leave for time off to obtain victim services. AB 2499 creates new, uncapped leave for scenarios already covered under existing law. And it applies to small businesses with just five employees. Passed by Senate Judiciary on 6/18. WECA Position: Oppose

AB 2696 (Rendon - D) Authorizes a joint labor-management cooperation committee (JLMCC), as specified, to bring an action in court against a direct contractor or subcontractor at any tier for any unpaid wage, fringe or other benefit payment or contribution, penalties or liquidated damages, and interest owed to a wage claimant by the direct contractor for the performance of private work. This proposed expansion of Section 218.8 is unnecessary from an enforcement perspective. Employees of general contractors know the identity of their direct employer. They can file wage claims with the Labor Commissioner, mechanics liens on the property, stop notices with the funding entity, civil lawsuits for non-payment of wages, and claims against payment bonds. AB 2696 encourages needless lawsuits that serve no legitimate enforcement purpose. Passed by Senate Labor on 6/19. WECA Position: Oppose

AB 2705 (Ortega - D) Provides that, for a violation of public works law, the statute of limitations (SOL) for the Labor Commissioner (LC) to sue a bonding company shall be the same as the 18-month SOL for the LC to issue a civil wage and penalty assessment to the contractor or subcontractor on that project or both. Passed by Senate Labor on 6/12. WECA Position: Oppose

AB 3265 (Bryan - D) Establishes procedures for an environmental leadership media campus in the County of Los Angeles. The project must pay prevailing wages unless covered by a PLA.  Passed by Senate EQ on 6/19. WECA Position: Oppose

SB 739 (Ashby - D) If the City of Elk Grove council approves, this new bill would expand this authorization to the City to use CMaR. It requires using a Skilled and Trained Workforce unless covered by a PLA. Passed by Assembly Local Gov on 6/5. WECA Position: Oppose Unless Amended

SB 984 (Wahab - D) Requires the courts and CSU to identify and select at least three major construction projects by January 1, 2027, governed by a project labor agreement (PLA). DTSC was removed after they reported that "utilizing a PLA for a project increased the cost of the cleanup by approximately 25 percent." Passed by Assembly Labor on 6/19. WECA Position: Oppose

SB 1022 (Skinner - D) Significantly expands existing statute limitations for any complaint brought by the Civil Rights Department or its “authorized representative” to ten years. It also gives a court discretion to extend that statute of limitations even further if it is “reasonable” to do so. Passed by Assembly Judiciary on 6/11. WECA Position: Oppose

SB 1162 (Cortese - D) Expands existing law, which requires contractors and bidders on public projects to use a skilled and trained workforce, by also requiring them to report the date of birth of each worker every month. Passed by Assembly Labor on 6/19. WECA Position: Support If Amended

SB 1321 (Wahab - D) Changes standards on ETP grants. A coalition of opponents states, “This bill poses a significant threat to the vital interests of manufacturers and small, diverse businesses throughout California. SB 1321 proposes fundamental changes to the Employment Training Panel (ETP) that would render the very businesses that fund the program ineligible to participate. Such a change would undermine the essence of the ETP, jeopardizing the development and sustainability of California's workforce." Passed by Assembly Labor on 6/19. WECA Position: Oppose