Government Affairs and Merit Shop Advocacy
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CFEC Plans Two Zoom PLA Meetings
On Tuesday, April 6th at 1:00pm CFEC will hold a Zoom meeting to discuss CFEC’s PLA strategy for the San Diego region.

On Wednesday, April 7th at 1:00pm they will hold a Zoom meeting to discuss CFEC’s PLA strategy for two major projects in Sacramento.

To participate send an email to cfec.ca@gmail.com

 
The American Jobs Plan Yesterday, President Joe Biden rolled out his $2 trillion infrastructure plan at a—surprise, surprise--carpenters’ training facility in Collier, Pennsylvania, a Pittsburgh suburb whose population is about 98 percent white. Biden made two specific mentions of PLAs in his outline that you can read here. In total – he mentioned unions 24 times in his summary.

Under the section entitled Build, Preserve, And Retrofit More Than Two Million Homes and Commercial Buildings; Modernize Our Nation’s Schools, Community Colleges, And Early Learning Facilities; And Upgrade Veterans’ Hospitals and Federal Buildings. “The President’s plan invests $213 billion to produce, preserve, and retrofit more than two million affordable and sustainable places to live. It pairs this investment with an innovative new approach to eliminate state and local exclusionary zoning laws, which drive up the cost of construction and keep families from moving to neighborhoods with more opportunities for them and their kids. The President’s plan will help address the growing cost of rent and create jobs that pay prevailing wages, including through project labor agreements with a free and fair choice to join a union and bargain collectively. (The President didn’t mention a worker’s right to not be forced to join a union).

Under Create Good-Quality Jobs That Pay Prevailing Wages in Safe and Healthy Workplaces While Ensuring Workers Have A Free and Fair Choice to Organize, Join A Union, and Bargain Collectively with Their Employers. “Create good jobs. The President’s plan demands that employers benefiting from these investments follow strong labor standards and remain neutral when their employees seek to organize a union and bargain collectively. He is asking Congress to tie federal investments in clean energy and infrastructure to prevailing wages and require transportation investments to meet existing transit labor protections. He also is calling for investments tied to Project Labor, Community Workforce, local hire, and registered apprenticeships and other labor or labor-management training programs so that federal investments support good jobs and pathways to the middle class. (Does his use of labor or labor-management training programs signal future challenges for employer training programs?). Finally, he is asking Congress to include a commitment to increasing American jobs through Buy America and Ship American provisions.
 
Additional Sick Pay One remaining piece of COVID-19 legislation was the enactment of SB 95 (Skinner). This bill mandates that employers expand supplemental paid sick leave for COVID-19-related absences. SB 95, which took effect on March 29, 2021, applies retroactively to applicable leave taken on or after January 1, 2021, and remains in effect until September 30, 2021. Thus, covered employers must provide Supplemental COVID-19 Paid Sick Leave beginning on March 29, 2021, and covered employees who took qualifying leave between January 1 and March 28 may request retroactive payment for leave taken during that period.

Lawmakers Propose Wealth Tax and PIT Increase From CalTax State lawmakers recently proposed two major tax increases: a wealth tax targeting Californians with a net worth above $50 million and a personal income tax increase on annual income over $2 million. The PIT increase was revealed in amendments to AB 65, by Democratic Assembly Member Evan Low. The bill would create the California Universal Basic Income Program, funded via a 1 percent surcharge on income above $2 million beginning January 1, 2022. The bill would bring California’s top PIT rate – already the highest in the United States – to 14.3 percent. The revenue generated by the tax hike would be used to provide monthly $1,000 payments to Californians who are at least 18 years old, are not incarcerated, have been residents of the state for the prior three consecutive taxable years and do not earn more than 200 percent of the per capita median income for the counties in which they reside. As a tax increase, the bill faces a two-thirds vote threshold in the Legislature.

The wealth tax proposal was unveiled March 15 in a virtual press conference hosted by the lead author, Assembly Member Alex Lee. The proponents said the legislation, which is not yet in print, would impose a 1 percent tax on wealth over $50 million and a 1.5 percent tax on wealth over $1 billion. Lee’s press conference also featured Assembly Members Luz Rivas, Miguel Santiago, and Lorena Gonzalez. The lawmakers were joined California Federation of Teachers President Jeff Freitas, entrepreneur Joe Sanberg, and University of California at Berkeley Economics Professor Emmanuel Saez. According to several participants in the press conference, their tax increase is intended to make California’s wealthiest residents “pay their fair share.” If approved by at least two-thirds of the Legislature, the wealth tax would be placed on a statewide ballot in a measure that would need a simple majority vote for passage. Saez, co-author of the book, “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay,” said the tax would raise approximately $22 billion per year – approximately half of which would be paid by 170 individuals. “The mere introduction of a similar proposal last year was enough to increase the exodus of businesses, individuals and investments fleeing California,” CalTax President Robert Gutierrez said. “This damaging proposal encourages more Californians to follow in the footsteps of others who already moved out of California. Most other states are not threatening to tax their residents’ savings and personal effects – items that were purchased with money left over after paying California’s highest-in-the-nation income tax.” Opponents of the two tax hikes noted that proponents’ revenue estimates do not appear to factor in the likelihood that some of the targeted individuals would move out of California and establish residence in a state with lower taxes. Gutierrez noted that the state government is collecting billions of dollars more than expected under the current tax rates and has a large reserve that got the state through a year of pandemic without having to cut funding for education or other important programs. Governor Gavin Newsom and one of his top advisors have said the governor will not approve wealth taxes or income tax increases this year.

Sales Tax Increases Take Effect April 1 in Many Areas of the State Voter-approved sale tax rate increases will take effect April 1 in many areas of the state, the California Department of Tax and Fee Administration notified retailers in a special notice. In 11 cities, the new tax rate will be 10.25 percent. Ten of the cities are in Los Angeles County (Bell Gardens, Bellflower, City of Commerce, Lancaster, Lomita, Palmdale, San Fernando, Signal Hill, South El Monte, and West Hollywood). The remaining 10.25 percent city is El Cerrito, in Contra Costa County. Consumers in Turlock will have a tough time estimating the cost of sales tax without a calculator, as the new rate is 8.625 percent. They may be used to dealing with non-round numbers, however, as the new rate replaces the current rate of 7.875 percent.

How the PRO Act could change the way contractors do business The construction industry’s use of independent contractors and subcontractors, even sub-subcontractors, is standard practice. The nature of the business requires a wide range of expertise and independent contractors can help with the short-term staffing that a company does not have in-house, or they can supplement a contractor's full-time workforce. Using independent contractors and subcontractors also saves the hiring contractor money because it doesn't have to pay employee benefits, provide workers' compensation coverage or withhold taxes on those entities. Story

Recall Watch March 22, 2021 From TargetBook March 17 was the deadline for proponents of the Gavin Newsom recall to submit their signatures to county elections offices. Proponents announced that they had submitted 2,117,730 signatures. Once the recall is determined to have enough valid signatures, voters will have 30 business days during which they may withdraw their signatures. Gavin Newsom's 'Stop the Republican Recall' committee announced it had raised over $538,000 from online donors in its first 48 hours. Independent expenditures have already begun for the recall and replacement candidates. Former GOP Rep. Doug Ose, who dropped out of the 2018 governor's race after 52 days citing poor fundraising and a crowded field of candidates, announced he would be a candidate in the recall election. With the GOP field becoming increasingly crowded, all eyes are on whether Newsom's campaign can hold back the dam for the next six months and prevent a credible Democratic candidate from running in the recall.

Speaker Nancy Pelosi spoke out recently in an attempt to pull the Democratic Party together around Newsom. She told reporters that the recall effort was “an unnecessary notion,” adding, “I don’t think it even rises to the level of an idea.”

But the public has another notion. A poll released this week by the nonpartisan firm Probolsky Research found that California voters were split on whether to recall Newsom. Forty percent supported recalling him, while 46 percent were opposed. That’s not overwhelming support — but it’s a clear sign that Newsom is in choppy waters and would need to work hard to head off a recall if a vote does get scheduled.

Biden May Be the Most Pro-Labor President Ever; That May Not Save Unions (Grab your box of WECA tissues) The New York Times reports “Labor leaders are effusive in praising the new president, but experts worry that he may be powerless to reverse unions’ long-term decline.” Story

Government Affairs and Merit Shop Advocacy
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Newsom Recall From Politico The deadline for submitting petitions for recall of Gov. Gavin Newsom passed last night at 5 p.m., when recall supporters announced they had submitted 2,117,730 signatures to 58 county registrars. It could take until April 29 to verify whether recall proponents have the 1.5 million valid voter signatures needed to qualify the election. According to veteran California political analyst and Sonoma State University professor David McCuan: “This is going to be the political story of 2021 — and it's going to be national in scope, because the vice president will not be able to take a pass. That means the White House will not be able to take a pass. It’s going to be a ‘proxy war for 2022,’ he added. “The ultimate exhibition game.”

Orange County Democrats Flip Key Supervisors’ Seat, Moorlach Concedes to Foley Surprising essentially no one, Democrats have flipped a Republican seat on the Orange County Board of Supervisors, as former county Supervisor John Moorlach conceded the race to Costa Mesa Mayor Katrina Foley. It will be the first time in decades that Democrats have two seats on the powerful board that impacts everything from homelessness to mental health services to the pandemic. Foley led the field with 44% of the ballots reported in the final election night update at 10 p.m., followed by Republican John Moorlach, a former supervisor, with 31%. Two other Republican challengers – Newport Beach Councilman Kevin Muldoon and Fountain Valley Mayor Michael Vo – each got about 10% of the vote as of the latest results, meaning Muldoon and Vo were spoilers for Moorlach. Story

PROAct moves The House of Representatives passed the Protecting the Right to Organize Act (PRO Act). The vote was 225-206, with five Republicans voting for and one Democrat (Rep. Cuellar) voting against. For comparison, when the bill passed the House last year, seven Democrats, not all of whom survived the 2020 election, voted no. Several Democrats seem to have converted to a “yes” due to an amendment that called for a GAO study to determine the impact of the bill on independent contractors and those businesses considered joint employers. Needless to say, that amendment has no practical value and was a cynical attempt to provide political cover. As most of you know, the PRO Act would essentially eliminate right to work laws, encourage “card check” certification, impose first contract arbitration, legalize secondary boycotts, mandate California’s ABC test for determining independent contractor status under the NLRA, re-establish the Browning Ferris standard for joint employer determinations, and massively increase penalties on employers, among other provisions. This year’s version of the bill is even worse than that from the previous Congress. For example, it adds “contract bar” language that would prevent decertification elections during the life of a contract and allow unions to request mail in ballots in any campaign. The US Chamber “key voted” the PRO Act, lobbied extensively, and worked with state and local chamber partners to generate communications to their delegations. 

Under current filibuster rules, Democrats do not have the votes to pass the bill. Currently there are 45 Senate Democrats supporting the PRO Act. Those who have NOT co-sponsored include Sen. Sinema (AZ), Sen. Kelly (AZ), Sen. Warner (VA), Sen. King (ME), and Sen. Manchin (WV). Arizona members encourage Kelly and Sinema to stay off the bill and to vote no if it ever comes to the floor. It is also critical to encourage senators to maintain the filibuster. At some point Democrats will make a serious move to eliminate the filibuster, likely around a vote on a sensitive issue such as civil rights or voting rights. Whatever that issue may be, it is important that the business community take the long view and understand that if the filibuster is eliminated for one issue, it is gone for the PRO Act as well.
 
CA teachers could spend more than 12 years on union organizing with new bill From SacBee. "California teachers could take an indefinite leave from the classroom to work on union business without suffering consequences to their pensions under Senate Bill 294, authored by Sen. Connie Leyva, D-Chino. It would remove a cap that compels teachers to return to schools after 12 years of union-related leave. Teachers, like other public employees, accrue service credit toward their pensions for each year they work. When they retire, their years of service are a key factor in how big their pension will be. Under current law, teachers may work full-time for their unions while continuing to accrue service credit, but not for more than 12 years. Leyva’s proposal would remove the cap."

San Diego Supervisors Vote to Require Contractor Disclosure Citing a need to “increase transparency within the County of San Diego”, the San Diego Board of Supervisors voted 5-0 to proceed with a proposal by board chair Nathan Fletcher to “require contractors for building permits and right-of-way permits, to disclose, at the time of subcontractor selection, the subcontractors working on a given project, including their contact information, subcontractor’s workers’ compensation insurance, State Contractor License Board license number and license category, and any other applicable disclosures.” The new county ordinance would “[i]dentify clearly that it is the responsibility of the lead contractor to ensure that, at the time of permit issuance and subcontractor selection, all subcontractors meet state and local labor regulations. Local AGC and BIA representatives cautioned the board that this requirement would be cumbersome and expensive. Worse is the prospect that projects with merit shop contractors and sub-contractors will see delay and objections by the local construction unions. The proposed ordinance is due back to the board within 180 days. No evidence was offered by Fletcher that his proposal would “fix” any problems the County was facing.

Ask Richard



?Richard Markuson
WECA Government Affairs Advocate, Pacific Advocacy Group

Have questions or concerns?

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