Bill Text: CA AB2744 | 2013-2014 | Regular Session | Chaptered
Bill Title: Public works: apprenticeship program.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2014-08-25 - Chaptered by Secretary of State - Chapter 297, Statutes of 2014. [AB2744 Detail]
Download: California-2013-AB2744-Chaptered.html
BILL NUMBER: AB 2744 CHAPTERED
BILL TEXT
CHAPTER 297
FILED WITH SECRETARY OF STATE AUGUST 25, 2014
APPROVED BY GOVERNOR AUGUST 25, 2014
PASSED THE SENATE AUGUST 7, 2014
PASSED THE ASSEMBLY AUGUST 11, 2014
AMENDED IN SENATE JUNE 18, 2014
INTRODUCED BY Committee on Labor and Employment (Assembly Members
Roger Hernández (Chair), Alejo, Chau, and Holden)
FEBRUARY 27, 2014
An act to amend Section 1777.1 of, and to repeal and add Section
1777.7 of, the Labor Code, relating to public works.
LEGISLATIVE COUNSEL'S DIGEST
AB 2744, Committee on Labor and Employment. Public works:
apprenticeship program.
Existing law provides that when a contractor or subcontractor
performing a public works project is found by the Labor Commissioner
to be in violation of the requirements relating to public works
contracts, except with regard to the employment of apprentices, with
intent to defraud, or within a 3-year period of having committed 2 or
more separate willful violations of these provisions, the contractor
or subcontractor or a firm, corporation, partnership, or association
in which the contractor or subcontractor has any interest is
ineligible to bid on, be awarded, or perform work as a subcontractor
on a public works contract for specified periods of time.
This bill would make these provisions applicable to violations of
provisions related to the employment of apprentices.
Existing law, among other things, imposes a civil penalty on
contractors or subcontractors who are determined to have knowingly
violated specified provisions regulating the employment of
apprentices on public works projects, provides that a contractor or
subcontractor who is determined to have knowingly committed a serious
violation of the apprentice employment provisions may additionally
be denied the right to bid on or be awarded or perform work as a
subcontractor on any public works contract for a specified period of
time, provides for a review of the civil penalty or debarment by the
Labor Commissioner, and provides for a process to collect the civil
penalty.
This bill would revise and recast these provisions by, among other
things, making the civil penalty applicable to the contractor and
any subcontractor responsible for the violation, requiring the Labor
Commissioner or his or her designee to issue a civil wage and penalty
assessment in accordance with a specified provision, and providing
for notice by the Division of Labor Standards Enforcement to the
contractor within 15 days of receipt of a complaint that their
subcontractor knowingly violated the apprentice employment
provisions.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1777.1 of the Labor Code is amended to read:
1777.1. (a) Whenever a contractor or subcontractor performing a
public works project pursuant to this chapter is found by the Labor
Commissioner to be in violation of this chapter with intent to
defraud, the contractor or subcontractor or a firm, corporation,
partnership, or association in which the contractor or subcontractor
has any interest is ineligible for a period of not less than one year
or more than three years to do either of the following:
(1) Bid on or be awarded a contract for a public works project.
(2) Perform work as a subcontractor on a public works project.
(b) Whenever a contractor or subcontractor performing a public
works project pursuant to this chapter is found by the Labor
Commissioner to have committed two or more separate willful
violations of this chapter within a three-year period, the contractor
or subcontractor or a firm, corporation, partnership, or association
in which the contractor or subcontractor has any interest is
ineligible for a period up to three years to do either of the
following:
(1) Bid on or be awarded a contract for a public works project.
(2) Perform work as a subcontractor on a public works project.
(c) Whenever a contractor or subcontractor performing a public
works project has failed to provide a timely response to a request by
the Division of Labor Standards Enforcement, the Division of
Apprenticeship Standards, or the awarding body to produce certified
payroll records pursuant to Section 1776, the Labor Commissioner
shall notify the contractor or subcontractor that, in addition to any
other penalties provided by law, the contractor or subcontractor
will be subject to debarment under this section if the certified
payroll records are not produced within 30 days after receipt of the
written notice. If the commissioner finds that the contractor or
subcontractor has failed to comply with Section 1776 by that
deadline, unless the commissioner finds that the failure to comply
was due to circumstances outside the contractor's or subcontractor's
control, the contractor or subcontractor or a firm, corporation,
partnership, or association in which the contractor or subcontractor
has any interest is ineligible for a period of not less than one year
and not more than three years to do either of the following:
(1) Bid on or be awarded a contract for a public works project.
(2) Perform work as a subcontractor on a public works project.
(d) (1) In the event a contractor or subcontractor is determined
by the Labor Commissioner to have knowingly committed a serious
violation of any provision of Section 1777.5, the Labor Commissioner
may also deny to the contractor or subcontractor, and to its
responsible officers, the right to bid on or to be awarded or perform
work as a subcontractor on any public works contract for a period of
up to one year for the first violation and for a period of up to
three years for a second or subsequent violation. Each period of
debarment shall run from the date the determination of noncompliance
by the Labor Commissioner becomes a final order.
(2) The Labor Commissioner shall consider, in determining whether
a violation is serious, and in determining whether and for how long a
party should be debarred for violating Section 1777.5, all of the
following circumstances:
(A) Whether the violation was intentional.
(B) Whether the party has committed other violations of Section
1777.5.
(C) Whether, upon notice of the violation, the party took steps to
voluntarily remedy the violation.
(D) Whether, and to what extent, the violation resulted in lost
training opportunities for apprentices.
(E) Whether, and to what extent, the violation otherwise harmed
apprentices or apprenticeship programs.
(e) A willful violation occurs when the contractor or
subcontractor knew or reasonably should have known of his or her
obligations under the public works law and deliberately fails or
deliberately refuses to comply with its provisions.
(f) The Labor Commissioner shall publish on the commissioner's
Internet Web site a list of contractors who are ineligible to bid on
or be awarded a public works contract, or to perform work as a
subcontractor on a public works project pursuant to this chapter. The
list shall contain the name of the contractor, the Contractors'
State License Board license number of the contractor, and the
effective period of debarment of the contractor. Contractors shall be
added to the list upon issuance of a debarment order and the
commissioner shall also notify the Contractors' State License Board
when the list is updated. At least annually, the commissioner shall
notify awarding bodies of the availability of the list of debarred
contractors. The commissioner shall also place advertisements in
construction industry publications targeted to the contractors and
subcontractors, chosen by the commissioner, that state the effective
period of the debarment and the reason for debarment. The
advertisements shall appear one time for each debarment of a
contractor in each publication chosen by the commissioner. The
debarred contractor or subcontractor shall be liable to the
commissioner for the reasonable cost of the advertisements, not to
exceed five thousand dollars ($5,000). The amount paid to the
commissioner for the advertisements shall be credited against the
contractor's or subcontractor's obligation to pay civil fines or
penalties for the same willful violation of this chapter.
(g) For purposes of this section, "contractor or subcontractor"
means a firm, corporation, partnership, or association and its
responsible managing officer, as well as any supervisors, managers,
and officers found by the Labor Commissioner to be personally and
substantially responsible for the willful violation of this chapter.
(h) For the purposes of this section, the term "any interest"
means an interest in the entity bidding or performing work on the
public works project, whether as an owner, partner, officer, manager,
employee, agent, consultant, or representative. "Any interest"
includes, but is not limited to, all instances where the debarred
contractor or subcontractor receives payments, whether cash or any
other form of compensation, from any entity bidding or performing
work on the public works project, or enters into any contracts or
agreements with the entity bidding or performing work on the public
works project for services performed or to be performed for contracts
that have been or will be assigned or sublet, or for vehicles,
tools, equipment, or supplies that have been or will be sold, rented,
or leased during the period from the initiation of the debarment
proceedings until the end of the term of the debarment period. "Any
interest" does not include shares held in a publicly traded
corporation if the shares were not received as compensation after the
initiation of debarment from an entity bidding or performing work on
a public works project.
(i) For the purposes of this section, the term "entity" is defined
as a company, limited liability company, association, partnership,
sole proprietorship, limited liability partnership, corporation,
business trust, or organization.
(j) The Labor Commissioner shall adopt rules and regulations for
the administration and enforcement of this section.
SEC. 2. Section 1777.7 of the Labor Code is repealed.
SEC. 3. Section 1777.7 is added to the Labor Code, to read:
1777.7. (a) (1) If the Labor Commissioner or his or her designee
determines after an investigation that a contractor or subcontractor
knowingly violated Section 1777.5, the contractor and any
subcontractor responsible for the violation shall forfeit, as a civil
penalty to the state or political subdivision on whose behalf the
contract is made or awarded, not more than one hundred dollars ($100)
for each full calendar day of noncompliance. The amount of this
penalty may be reduced by the Labor Commissioner if the amount of the
penalty would be disproportionate to the severity of the violation.
A contractor or subcontractor that knowingly commits a second or
subsequent violation within a three-year period, if the noncompliance
results in apprenticeship training not being provided as required by
this chapter, shall forfeit as a civil penalty the sum of not more
than three hundred dollars ($300) for each full calendar day of
noncompliance.
(2) In lieu of the penalty provided for in this subdivision, the
Labor Commissioner may, for a first-time violation and with the
concurrence of an apprenticeship program described in subdivision (d)
of Section 1777.5, order the contractor or subcontractor to provide
apprentice employment equivalent to the work hours that would have
been provided for apprentices during the period of noncompliance.
(b) The Labor Commissioner shall consider, in setting the amount
of a monetary penalty, all of the following circumstances:
(1) Whether the violation was intentional.
(2) Whether the party has committed other violations of Section
1777.5.
(3) Whether, upon notice of the violation, the party took steps to
voluntarily remedy the violation.
(4) Whether, and to what extent, the violation resulted in lost
training opportunities for apprentices.
(5) Whether, and to what extent, the violation otherwise harmed
apprentices or apprenticeship programs.
(c) (1) The Labor Commissioner or his or her designee shall issue
a civil wage and penalty assessment, in accordance with the
provisions of Section 1741, upon determination of penalties assessed
under subdivisions (a) and (b). Review of a civil wage and penalty
assessment issued under this subdivision may be requested in
accordance with the provisions of Section 1742. The regulations of
the Director of Industrial Relations, which govern proceedings for
review of civil wage and penalty assessments and the withholding of
contract payments under Article 1 (commencing with Section 1720) and
Article 2 (commencing with Section 1770), shall apply.
(2) For purposes of this section, a determination issued pursuant
to subdivision (a) or (b) includes a determination that has been
approved by the Labor Commissioner and issued by an awarding body
that has been authorized to assist the director in the enforcement of
Section 1777.5 pursuant to subdivision (p) of that section. The
Labor Commissioner may intervene in any proceeding for review of a
determination issued by an awarding body. If the involvement of the
Labor Commissioner in a labor compliance program enforcement action
is limited to a review of the determination and the matter is
resolved without litigation by or against the Labor Commissioner or
the department, the awarding body shall enforce any applicable
penalties, as specified in this section, and shall deposit any
penalties and forfeitures collected in the General Fund.
(d) The determination of the Labor Commissioner as to the amount
of the penalty imposed under subdivisions (a) and (b) shall be
reviewable only for an abuse of discretion.
(e) If a subcontractor is found to have violated Section 1777.5,
the prime contractor of the project is not liable for any penalties
under subdivision (a) unless the prime contractor had knowledge of
the subcontractor's failure to comply with the provisions of Section
1777.5 or unless the prime contractor fails to comply with any of the
following requirements:
(1) The contract executed between the contractor and the
subcontractor for the performance of work on the public works project
shall include a copy of the provisions of Sections 1771, 1775, 1776,
1777.5, 1813, and 1815.
(2) The contractor shall continually monitor a subcontractor's use
of apprentices required to be employed on the public works project
pursuant to subdivision (d) of Section 1777.5, including, but not
limited to, periodic review of the certified payroll of the
subcontractor.
(3) Upon becoming aware of a failure of the subcontractor to
employ the required number of apprentices, the contractor shall take
corrective action, including, but not limited to, retaining funds due
to the subcontractor for work performed on the public works project
until the failure is corrected.
(4) Prior to making the final payment to the subcontractor for
work performed on the public works project, the contractor shall
obtain a declaration signed under penalty of perjury from the
subcontractor that the subcontractor has employed the required number
of apprentices on the public works project.
(f) The Division of Labor Standards Enforcement shall notify the
contractor on a public works project within 15 days of the receipt by
the division of a complaint that a subcontractor on that public
works project knowingly violated Section 1777.5.
(g) The interpretation of Section 1777.5 and the substantive
requirements of this section applicable to contractors or
subcontractors shall be in accordance with the regulations of the
California Apprenticeship Council.
(h) The Director of Industrial Relations may adopt regulations to
establish guidelines for the imposition of monetary penalties.
