Left to right: Richard Markuson (Lobbyist); Ian Vander Linden (KS Telecom CEO and WECA Board Member), and KS Telecom employees attend recent Senate Governmental Organization Committee and Labor, Public Employment and Retirement Committee hearings in Sacramento.
Let’s Study PLAs Democrats and quisling Republican Senator Scott Wilk joined Senator Aisha Wahab on her quest to impose PLA mandates on all state construction above $35 million. In back-to-back hearings in the Senate Governmental Organization Committee and Labor, Public Employment and Retirement Committee, Wilk joined his Democrat colleagues in advancing Wahab’s SB 984. Wilk’s own noteworthy legislation to help reduce overcrowding at animal shelters across the state by expanding access to low and no-cost spay and neuter services passed out of the Senate Business, Professions, and Economic Development Committee this week.
What was interesting about the hearing was the participation of new PLA opponents. WECA was joined by the Associated Builders and Contractors Northern California Chapter, Associated Builders and Contractors of California, Associated General Contractors of California, Associated General Contractors-San Diego Chapter, Associated Roofing Contractors, Burr Plumbing and Pumping Inc., California Chamber of Commerce, California Highway Construction Group, Inc., Carter/Kelly Incorporated, Casey Construction, Inc., Construction Employers' Association, Diede Construction, Inc., Don Celillo Electric, Electrical & Automation Solutions, LLC, Electrical Services Company, Haggerty Construction, Housing Contractors of California, Imp Electrical & Automation Solutions, LLC, J.I. Garcia Construction, Inc., Modesto Executive Electric, Inc., Robert Colburn Electric, Inc., Stephens Construction, Inc., and W.E. Lyons Construction.
More significantly, the Carpenters Union opposed SB 984. Danny Curtin, the director for the California Conference of Carpenters since 2001, was one of two lead witnesses in the Labor hearing. He noted that PLAs conflicted with their master labor agreements and lacked contractor participation in negotiating terms and conditions. Unfortunately, this didn’t dissuade any of the committee from voting to send the bill along to a hearing in Senate Appropriations and eventually to the floor.
WECA member KS Telecom showed up for the merit shop community in opposition. KS Telecom’s CEO (and WECA Board Member) Ian Vander Linden shared opposition to the bill with some apprentices and employees. While the morning started with a smile, being the only contractor with employees in the room and the bill getting out of committee was frustrating. Ian shared, “This devastating bill should have had a substantial number of merit shop contractors and their employees filling this room, with more overflowing. Getting involved in defending our businesses and employees politically may seem unnerving, but it is beyond necessary.” Thank you to the KS Telecom team for your leadership.
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California’s New Workplace Violence Prevention Plan and Training Requirements Take Effect on July 1, 2024; How to Get Ready Employers must implement a comprehensive workplace violence prevention plan (WVPP) and provide employee training on the WVPP by July 1, 2024. The WVPP requirement (under California Labor Code Section 6401.9), augments the existing obligation for California employers to create and maintain an injury and illness prevention plan and is intended to combat incidents of workplace violence, which is the second leading cause of fatal occupational injuries in the United States, according to OSHA. The new compliance requirements are described, along with steps employers can take to get ready. Story
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“Walkaround” Rules Coming On May 31st, Fed-OSHA’s rules regarding employee representation during OSHA inspections will go into effect for most of the country. The so-called “walkaround” rule will ultimately come to California. Fed-OSHA says a regulatory change is to ensure “necessary information about worksite conditions and hazards.”
One attorney representing employers calls it a “thank you” to labor unions. But, he says, that’s not what worries him. Eric Conn of Conn Maciel Carey opines that whether Fed-OSHA intends it to apply to purely safety and health issues, the unintended consequences could be troublesome.
The regulatory change clarifies that a representative could be either an employee of the employer or a third party and that a third-party representative may “have a variety of skills, knowledge, or experience that could aid the OSHA inspection.” However, representatives have not been limited to those with such skills.
Currently, OSHA rules state that during a physical inspection of a workplace, representatives of both the employer and employees shall have the opportunity to accompany the compliance safety and health officer on the walk-through. However, under the rule, the employee representative must be an employee, with an exception for a third party when the inspector deems it necessary. Examples are supposed to include safety engineers and industrial hygienists.
However, in 2017, a federal district court ruled that such third parties are not consistent with the regulation, 29 CFR 1903(8)(c). At the same time, the court said that OSHA’s interpretation that third parties could be third-party employee representatives was “persuasive and valid.”
OSHA says the revision retains the CSHO’s authority to determine whether such an individual is “reasonably necessary,” and they can deny the right of accompaniment to individuals “whose conduct interferes with a fair and orderly inspection.”
Helen Cleary, director of the Phylmar Regulatory Roundtable OSH Forum, says the organization has expressed concern that “allowing any person authorized by an employee to accompany the walkaround would have unintended security and safety implications. We believe the new language expands the scope, and walkaround inspections will be impacted in new ways.”
Others argue that an outsider gaining knowledge could compromise not only physical security but also the security of intellectual property, proprietary processes, and legal rights.
Will this be a big deal for California? “I think potentially yes, but perhaps not for the reasons people think,” Conn tells Cal-OSHA Reporter. The unintended consequences, he says, are twofold. “The one that has me up at night is the plaintiff’s attorney or expert,” Conn says. “You could very easily imagine a situation where there’s a serious incident, even a fatality, and family members reach out to a coworker who recommends an attorney.”
“They would seem to meet the criteria that OSHA has set up be an acceptable representative. Now you would have plaintiff’s attorneys and experts foregoing the rules of civil procedure and getting access to workplaces, witnesses, and records, and the accident site, and physical evidence, [with] access to information they would never get under the rules of procedure.”
“The other scenario is a disgruntled former employee who submits a complaint, legitimate or not, then reaches out to current employees to convince them to suggest him or her to represent them in the walkaround. The person could be trying to cause trouble,” Conn suggests, “steal proprietary information, convince former coworkers to lie, or even commit an act of [sabotage or] violence. Those are the kinds of things I am very concerned about,” Conn says.
The Department of Industrial Relations tells Cal-OSHA Reporter that the Division of Occupational Safety and Health intends to adopt the federal rule, although it does not have a timeline for adoption. “It will not be submitted” for a Horcher (verbatim) adoption, DIR says. “We can say that our proposal will be at least as effective as the federal rule.”
The fact that the state adoption will not be done under the Horcher process suggests there could be advisory talks with the regulated community. DIR says, “Cal/OSHA is currently reviewing and will make a determination on how to move forward.”
Conn urges DOSH to limit the state regulation to “individuals with a technical credential,” such as an IH or safety engineer.
He also predicts that “there will be challenges” to the federal regulation in court. “There are some serious defects with this rule.” He says it contradicts the National Labor Relations Act, which defines how elected representatives in a workplace are chosen. “It’s by majority vote,” Conn says.
“The real core issue here is property owners’ rights to exclude unwelcome third parties from their workplace. OSHA has a right to come in when they’ve made a proper showing under the Fourth Amendment,” but the regulatory change could “force us to accept these unwelcome visitors.” [Cal-OSHA Reporter]
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I hope you’re sitting down; Biden Scores Major Union Backing as Its Leaders Attack Trump Joe Biden landed a significant union endorsement from North America’s Building Trades Unions, whose leaders say the president has his infrastructure bill largely to thank for it. In making one of their earliest-ever presidential endorsements, NABTU leaders are kickstarting an eight-figure organizing program to try to deliver their 250,000 members in the battlegrounds of Pennsylvania, Michigan, and Wisconsin for Biden. The Teamsters, whose endorsement is being pursued by both Biden and Donald Trump, are members of NABTU but abstained from Tuesday’s board vote, according to people briefed on the proceedings. They will endorse after the Republican and Democratic conventions. Story
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How Biden’s Apprenticeship Push Could Affect Builders President Joe Biden’s recent executive action to bolster registered apprenticeships as a pathway to high-paying jobs—including union jobs—has many implications for contractors that perform federally funded work. The March executive action—which is not legislation—directs federal agencies to reduce barriers and create pathways into federal employment through registered apprenticeships and expands the use of registered apprenticeships through grants and contracts. It also re-establishes within the federal government labor-management forums tools used by union members and management to jointly improve their workplaces. In addition, the Department of Labor is considering a rule change that would revise regulations for registered apprenticeships by updating worker protections and better-establishing pipelines to registered apprenticeship programs. Although the Biden administration’s efforts could spell good news for a labor-strapped industry like construction, both fans and critics of these moves also see them as a push to support unions, a key part of Biden’s platform. Story
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High-Priced Work Construction is underway for expensive “affordable” housing in San Diego. Voice of San Diego reported that the estimated cost per unit for the Cuatro development in City Heights is $842,000! Story
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Have you ever been stopped by law enforcement and asked, “Do you know how fast you were driving?” Under amendments adopted this week, a bill to physically limit passenger vehicles from speeding would now only require a passive warning system. Sen. Scott Wiener's SB 961, introduced in January, would have mandated "speed limiters" on new passenger cars, trucks, and buses starting in 2027 that restricted them from going more than 10 miles per hour over the speed limit. The San Francisco Democrat amended it ahead of its first hearing Tuesday to require just visual and audio signals that alert drivers when they've exceeded the speed threshold. The mandate would only apply to half of new vehicles starting in 2029 and all new vehicles by 2032. "We heard feedback from colleagues that people were not comfortable with an active physical barrier to going above a certain speed," Wiener said in the hearing. "People might need to go at a higher speed. We listened, we heard, worked with the committee, and changed it." The bill passed the Senate Transportation Committee 8-4 along party lines. [Politico]
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Arizona Legislature Returns to Capitol with Big To-do List With regular committee hearings now wrapped up for the legislative session, the state Legislature returned to the Capitol under a one-day-a-week schedule. The House and Senate will conduct floor sessions to determine the fate of bills that have made their way through the committee process in both chambers, deciding whether to send them to the governor to be signed or vetoed. Story
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DOL Announces New FLSA Overtime Salary Threshold On Tuesday, April 23, the U.S. Department of Labor announced a rule to significantly increase the salary level needed to qualify for the FLSA's overtime exemptions applicable to executive, administrative and professional employees to $844 per week ($43,888 annualized). The rule will also increase the total compensation needed to qualify for exemption under the test for highly compensated employees to $132,964 per year. These figures will be effective on July 1, 2024 but will increase again, effective January 1, 2025. On that date, the rule will increase the salary basis threshold to $1,128 per week ($58,656 annualized), and the threshold for exemption for highly compensated employees to $151,164 per year. Under the rule, these salary levels will be subject to automatic increases every three years. While legal challenges to the new rule are expected, employers should not wait for those challenges to be resolved before assessing the rule's impact on their operations and considering potential changes. In this webinar, we will review the new rule, discuss the expected legal challenges and provide recommendations for employers who may be impacted. [Littler]
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Maybe Losing an Election Isn't So Bad Some readers may recall Mike Allen. Mike was a member of the Santa Rosa Planning Commission and District Director for then-State Senator Pat Wiggins. Allen was elected to succeed Noreen Evans as the representative of the 7th Assembly district, winning 63.8% of the vote in the general election. He served as Assistant Majority Floor Leader. The statewide redistricting in 2011 significantly changed the 7th District, and the redrawn district excluded Allen's residence. Allen moved to San Rafael in Marin County to run for election in the open 10th Assembly district in 2012 but lost to San Rafael City Councilman Marc Levine. Marc, an affable liberal Democrat, served 10 years in the Assembly before running unsuccessfully in the June 2021 Democratic Statewide Primary for California Insurance Commissioner, gaining just 18% of the votes and losing to the incumbent Ricardo Lara with 35.9% of the votes. Lara went on to win reelection in the November 8, 2022 General Election against Republican Candidate Robert Howell (who?).
But what happened to Mike? Former Speaker John Perez appointed him to the Unemployment Insurance Appeals Board in 2013. Governor Gavin Newsom just reappointed Mike to an additional term. The UIAB salary is $181,156. A state Legislator? $128,215 (plus per-diem of $214 per day).
The Board is a popular purgatory for former legislators; three of the current four members are Legislators with no apparent interest in doing anything other than feeding on your tax dollars.
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Win for Property Owners The U.S. Supreme Court unanimously agreed with Pacific Legal Foundation (PLF) client George Sheetz that the government couldn’t force property owners to pay exorbitant development fees as a condition for approving building permits. This win is PLF’s 18th out of the 20 cases they’ve litigated at the Supreme Court and their tenth since 2018. El Dorado County, where George built his home, passed a law requiring homebuilders to pay thousands of dollars in “traffic impact fees” if they wanted a building permit. George, who just wanted to install a manufactured home on his property, was stuck with a $23,420 bill. George sued the county, with the help of former PLF attorney Paul Beard. PLF joined Paul as co-counsel to litigate George’s case at the Supreme Court. They argued legislatures aren’t exempt from Supreme Court precedent protecting property rights—and in the decision, the Court agreed. “Nothing in constitutional text, history, or precedent supports exempting legislatures from ordinary takings rules,” Justice Amy Coney Barrett writes in the decision. “The Constitution’s text does not limit the Takings Clause to a particular branch of government.” This victory protects all property owners across the country. To get a sense of George’s spirit, check out his Fox News interview from January.
Prop 1 – Taxpayer Rip-off?
WECA opposed Proposition 1 on the March ballot, noting that the $6.38 billion general obligation bond followed $9.2 billion in relief payments—known as the Middle Class Tax Refund (MCTR)—to qualifying recipients. The MCTR was timed to coincide with Governor Gavin Newsom’s 2022 re-election campaign – even though he was running against a token Republican opponent, State Senator Brian Dahle from Bieber. Dahle received 40.8% of the November vote, considerably higher than the 24% Republican registration, suggesting many DTS and possibly registered Democrats were tired of Newsom.
Prop. 1 promises to fund behavioral health treatment, residential facilities, and supportive housing for veterans and individuals at risk of or experiencing homelessness with behavioral health challenges. These are laudable goals but also proverbial “drop in the bucket.” In early 2023, over 181,000 Californians were counted as experiencing homelessness. These funds are estimated to create only 4,350 housing units, with 2,350 set aside for veterans and 6,800 mental health and substance use treatment places for approximately 11,150 new behavioral health and supportive housing units statewide.
Prop. 1 will also shift dollars from counties to the state (from about 5% of total Mental Health Services Act (MHSA) funding to about 10%). This would result in about $140 million annually redirected to the state budget. However, this amount could be higher depending on the total revenue collected from the tax.
The MHSA restructuring will result in significantly less funding for core services, which could lead to counties:
· Canceling contracts with community-based organizations.
· Closing programs that are currently serving Californians.
· Reducing county staffing.
But back to the MCTR. Rather than have the state’s own financial system issue checks to taxpayers to facilitate these payments, the state hired Money Network Financial, LLC. This out-of-state vendor provides financial services. Under the agreement, Money Network produced and distributed debit cards and provided cardholders with customer service and fraud prevention services. Although MCTR issued payments relatively quickly, according to a recent audit, the provisions of the state’s agreement with Money Network created “certain difficulties related to the administration of the payments.”
The audit noted several critical deficiencies.
· FTB did not ensure that Money Network consistently provided the required level of customer service to cardholders. Although Money Network received more than 29 million calls—the vast majority of which were handled by its automated system—Money Network did not answer nearly 900,000 of the roughly two million phone calls from callers seeking to speak with an agent about the MCTR program or issues with their debit cards. Weaknesses in FTB’s agreement with Money Network made holding Money Network accountable for its lack of customer service difficult.
· Although Money Network reported a fraud rate to FTB of less than 1% of the amount distributed through debit cards, the state cannot determine the precise level of fraud in the MCTR program because Money Network did not answer a substantial portion of cardholder calls and has not specifically tracked fraud in the program.
· Because the agreement’s payment structure bundles most services into a single per-card rate, FTB paid to Money Network nearly 90% of the agreement’s total cost in the first 15 months of the 49-month agreement period. This front-loaded payment structure does not fully safeguard the best interests of the state. In addition, the agreement with Money Network does not include provisions that would allow FTB to assess agreed-upon liquidated damages if Money Network does not comply with agreement terms—provisions found in other state agreements for similar services.
Finally, many debit card recipients have yet to activate their cards. According to information that Money Network provided to FTB, more than one million debit cards worth approximately $611 million in payments had not yet been activated by their recipients as of January 2024.
Time will tell if Prop. 1 will improve homelessness or mental health services. Still, if the history of the MCTR or Governor Newsom’s secretive $1-billion mask deal with Chinese automaker BYD is any bellwether, I am not expecting great results.
Close Races
In CD-16 (San Mateo), former mayor Sam Licardo won the top slot for the November run-off. Assembly Member Evan Low and Supervisor (and former Assembly Member, former State Senator) Joe Simitian tied for number 2 and 3.
But here’s where, as Politico put it, “In a race that just keeps getting weirder, a Silicon Valley voter who called for a recount in [this] tied House primary election once worked for [Licardo]. The filing says it was made on behalf of candidate Evan Low, who, until this week, was heading to a three-way race in November. But Low vehemently opposes the recount, and the request came from a former staffer for ex-San Jose Mayor Sam Licardo, who advanced to the November general election weeks ago after finishing in first place. Voter Jonathan Padilla agreed to pay more than $300,000 for the recount. He worked for Licardo’s 2014 mayoral campaign and as a policy director for the City of San Jose in 2015 and 2016 while Licardo was mayor. He also donated $1,000 to Licardo’s campaign in December. A spokesperson for Licardo’s campaign denies working with Padilla or funding the recount. Low’s campaign isn’t convinced. ‘There’s zero doubt that Sam Licardo orchestrated this recount and Padilla’s declaration that the recount is on our campaign's behalf is simply disingenuous. Clearly, Sam Licardo doesn’t think he can win a three-way race because he’s showing he will do anything to avoid one,’ spokesperson Whitney Larsen told Politico recently on behalf of Low, bemoaning the ‘expensive and time-consuming’ recount.
A poll funded by the Licardo campaign shows Licardo still has a modest lead: 26%, followed by Low, 2%, Simitian, 20%, and 24% undecided.
In CD-45 (Fountain Valley), Michelle Steel (R) is in first place and will face Derek Tran in this D+5.2 district. Steel defeated Democrat Jay Chen by under 5% in 2022, and the DCCC placed CD-45 on its 2024 target list.
In AD-2, Republican Michael Greer came out on top with 27% of the vote. But in this D+28 district consisting of the counties of Trinity, Del Norte, Humboldt, and Mendocino and portions of Sonoma, he will have a tough election against second-place finisher Santa Rosa Council Member Chris Rogers.
In AD-6 (Sacramento), Democrat Maggy Krell will face Republican Nikki Ellis in this D+30 Assembly seat.
In AD-58 (San Bernardino and Riverside Counties), Democrat Clarissa Cervantes came in second to Republican Leticia Castillo in this D+18 district, meaning this race was decided in March.
In AD-75, former Republican San Diego Council Member Carl DeMaio received 42.9% of the vote and will face another Republican, Andrew Hayes. The result caused a bit of turmoil in San Diego. Story
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ABC Chapter Sues over Biden’s PLA Rule
ABC and its Florida First Coast chapter filed suit to stop the Biden administration’s scheme to mandate PLAs on construction contracts procured by federal agencies. ABC’s complaint asserts that President Joe Biden lacks the legal and constitutional authority to impose a new federal regulation, injuring the economy and efficiency in federal contracting and illegally steering construction contracts to certain unionized contractors, which employ roughly 10% of the U.S. construction workforce. Story
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California Supreme Court Clarifies the Scope of “Hours Worked” Under California Law
On March 25, 2024, the California Supreme Court issued a highly anticipated decision in Huerta v. CSI Electrical Contractors, Inc. The court responded to the request from the Ninth Circuit to answer three questions about Wage Order No. 16 and clarify the scope of the term “hours worked.” Although the case discusses the “hours worked” standard in the context of the construction industry, the decision is likely to impact every industry, especially businesses that require employees to go through security checks at the beginning and end of the workday and businesses that confine employees to specific areas of company property during meal breaks. More
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California Isn’t Coming for Your AC (Yet)
The California Energy Commission stopped short recently of pushing homeowners to install heat pumps to replace worn-out central air conditioners. The reason? Cost. “It was a difficult case to make, in terms of both the additional costs up front and then also potentially causing real energy costs overall to increase for some customers,” Commissioner Andrew McAllister told reporters. It was a blow for heat pumps, which are supposed to proliferate to 6 million in California by 2030 with support from federal tax incentives of up to $2,000 and additional state incentives.
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New Sacramento Parking Garage at SMF
Sacramento-based Otto Construction was awarded the $229 million Design/Build contract. This will be the firm’s second parking garage project at SMF as they also constructed the Terminal A garage in 2004. Otto said at the award they were comfortable with building under a PLA—which was mandated by a 3-2 vote by the Board of Supervisors earlier this year.
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California Legislature Sends Gavin Newsom Budget Deal to Slash Deficit
Legislation that will reduce California’s budget deficit by $17.3 billion through spending cuts, deferrals, and other measures is headed for Gov. Gavin Newsom’s desk. The state Assembly and Senate approved Assembly Bill 106 along party lines today, advancing part of a deal negotiated by Newsom and Democratic legislative leaders over the past few weeks. The governor is expected to sign the legislation. Assembly Budget Chair Jesse Gabriel said the package was a first step and that the Legislature has the right to revisit the cuts and delays depending on future revenue figures.
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Celebrating 13 Years of Serving Military-Connected Job Seekers
March officially marked 13 years of Hiring Our Heroes! They have been dedicated to driving positive change for transitioning service members, veterans, military spouses, and caregivers for over a decade. Here's to another 13 years of empowering the nation’s heroes and making a lasting difference together! Information
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Solar to Supreme Court
Politico writes the dispute over the value of rooftop solar is going to the California Supreme Court, which agreed Wednesday to hear a challenge from environmental groups to a 2022 California Public Utilities Commission decision.
The court agreed to hear the Center for Biological Diversity and two other groups' appeal of a lower appellate court's December ruling that upheld the CPUC's decision to slash rooftop solar reimbursements in its net energy metering program by about 75%. The development is a victory for the solar industry, and some environmental groups are pushing on multiple fronts for California to make small-scale solar power a central part of its transition to clean energy and utility-scale renewables. CBD senior attorney Roger Lin called it a "ray of hope" for the rooftop solar industry, which layoffs and bankruptcies have buffeted.
When the CPUC reduced the reimbursements, commissioners said the higher payments of the past had served their purpose of growing a mature rooftop market in the state. Since the programs are subsidized by people without panels (to the tune of $6.5 billion per year, according to a recent analysis), it was time to reduce them, commissioners said.
In their lawsuit, the CBD, Environmental Working Group, and the Protect Our Communities Foundation said that the CPUC had failed to fully account for rooftop solar’s social benefits, hadn't sufficiently promoted renewable energy, and had overlooked disadvantaged communities.
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Biden: ‘Union labor and American steel’ will rebuild Key Bridge
Standing in front of the crumbled wreckage of the Francis Scott Key Bridge, President Joe Biden re-upped his commitment to the federal government funding the span’s replacement, saying he would “move heaven and earth” to rebuild it quickly. During a windswept afternoon on the banks of the Patapsco River, the president said the top priority remains opening the channel for port traffic and emphasized the U.S. Army Corps of Engineers’ goal to clear a path for commercial vessels by the end of May. Biden said the new bridge would be built “with union labor and American steel,” as he stood on the grounds of the Maryland Transportation Authority Police headquarters, about a half mile east of the span. Story