Existing law defines the term public works for the purposes of requirements regarding the payment of prevailing wages, the regulation of working hours, and the securing of workers compensation for public works projects. Existing law requires an entity awarding a public works contract, as specified, to provide notice to the Department of Industrial Relations. Existing law requires civil penalties to be imposed on an entity that fails to provide that required notice and authorizes the Labor Commissioner to issue a citation for civil penalties to an entity that fails to provide the required notice.

This bill would additionally require the awarding body to provide notice to the department, within 30 days, if there is a change in the identity of a contractor or subcontractor performing the project or, if the total amount of the contract change exceeds specified thresholds. The bill would exempt projects of awarding bodies operating labor compliance programs that are approved and monitored by the department and covered by a valid project labor agreement. By creating new notification requirements for public agencies, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law defines the term public works for the purposes of requirements regarding the payment of prevailing wages, the regulation of working hours, and the securing of workers compensation for public works projects. Existing law requires an entity awarding a public works contract, as specified, to provide notice to the Department of Industrial Relations. Existing law requires civil penalties to be imposed on an entity that fails to provide that required notice and authorizes the Labor Commissioner to issue a citation for civil penalties to an entity that fails to provide the required notice.

This bill would additionally require the awarding body to provide notice to the department department, within 30 days, if there is a change in the identity of a contractor or subcontractor performing the project or, within 30 days, if the total amount of the contract change exceeds $10,000. specified thresholds. The bill would exempt projects of awarding bodies operating labor compliance programs that are approved and monitored by the department and covered by a valid project labor agreement. By creating new notification requirements for public agencies, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Existing law defines the term public works for the purposes of requirements regarding the payment of prevailing wages, the regulation of working hours, and the securing of workers compensation for public works projects. Existing law requires an entity awarding a public works contract, as specified, to provide notice to the Department of Industrial Relations. Existing law requires civil penalties to be imposed on an entity that fails to provide that required notice and authorizes the Labor Commissioner to issue a citation for civil penalties to an entity that fails to provide the required notice.

This bill would additionally require the awarding body to provide notice to the department if there is a change in the identity of a contractor or subcontractor performing the project or, within 30 days, if the total amount of the contract change exceeds $10,000. By creating new notification requirements for public agencies, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

GOVERNOR'S VETO

GV Bill Id:AB 1890

Author:(Joe Patterson)

As Enrolled Ver:August 26, 2024

2/3 vote

SUMMARY

Requires an awarding body of public works projects to provide notice to the Department of Industrial Relations (DIR) of any changes or additions regarding the project registration within 30 days, as specified.

Senate Amendments

1. Require the awarding body to provide notice to the DIR if the total amount of the contract change exceeds specified thresholds.
2. Exempt projects of awarding bodies operating labor compliance programs that are approved and monitored by the DIR and covered by a valid project labor agreement.

Governor's Veto Message

This bill requires an awarding body of public works projects to provide notice to the Department of Industrial Relations (DIR) of any changes or additions regarding the project registration within 30 days.

While I appreciate the author's efforts to provide transparency to public works contracts, this bill is unnecessary. Local agencies are already required to electronically notify DIR with a contractor's name and contract value prior to the first day that work is performed on a public works project. Additionally, existing law prohibits a general contractor from replacing or substituting a subcontractor without written consent and permission from the contracting agency. The additional notification requirements proposed by this bill would create unnecessary administrative burdens and penalties on awarding agencies, without any clear benefits or added transparency.

COMMENTS

This measure will help promote equity and benefit underserved and marginalized communities by providing enhanced transparency for public works projects that encounter significant changes after they have begun. Providing this additional transparency will assist in ensuring that contractors with a history of egregious labor violations are not utilizing taxpayer dollars, which in return will aid in ensuring employees on public works projects receive just compensation for the wages and benefits earned while employed on the project. This added transparency will additionally help in ensuring that apprentices from state approved apprenticeship programs are being dispatched in accordance with public works law, which will assist in providing a path to middle class for those seeking a career in the construction industry.

According to the Author

The author points out that "while the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the DIR.

This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change."

Also according to the author, "It is important that there is an open transparent process in public works projects when it comes to spending our precious tax dollars. Assembly Bill 1890 helps ensure that changes to public works projects are transparent and made available to the public."

Arguments in Support

The International Union of Operating Engineers, Cal-Nevada Conference, sponsor of this measure, states "In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.

Specifically, the bill would require awarding agencies of public works projects to update their project registration with the Department of Industrial Relations in situations when a contractor or subcontractor performing work on an existing public works project is changed, or the total cost of the public works contract changes by specified amounts."

Arguments in Opposition

The California Special Districts Association and the California State Association of Counties are opposed unless amended, stating, "While we appreciate the intent, to ensure that these public projects continue to be transparent and accountable, AB 1890 proposes new notification requirements and imposes new penalties for non-compliance that will result in extended timelines and increased costs to public projects by creating new administrative burdens to local agencies."

FISCAL COMMENTS

According to the Senate Appropriations Committee pursuant to Senate Rule 28.8 negligible costs.

VOTES

ASM LABOR AND EMPLOYMENT: 7-0-0

YES: Ortega, Flora, Alanis, Wendy Carrillo, Lee, Ward, Zbur

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ABS, ABST OR NV: Wendy Carrillo

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Arambula, Boerner, Bonta, Bryan, Cervantes, Megan Dahle, Essayli, Mathis

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ASSEMBLY FLOOR: 62-0-17

YES: Alanis, Alvarez, Arambula, Bains, Bennett, Berman, Boerner, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Hart, Hoover, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Lowenthal, Maienschein, Mathis, Muratsuchi, Stephanie Nguyen, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Addis, Aguiar-Curry, Bauer-Kahan, Bonta, Cervantes, Mike Fong, Haney, Holden, Irwin, Low, McCarty, McKinnor, Ortega, Petrie-Norris, Weber, Wicks, Wilson

UPDATED

VERSION: August 26, 2024

CONSULTANT: Lorie Alvarez / L. & E. / (916) 319-2091 FN: 0005157

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1890

Author:(Joe Patterson)

As Amended Ver:August 5, 2024

Majority vote

SUMMARY

Requires an awarding body of public works projects to provide notice to the Department of Industrial Relations (DIR) of any changes or additions regarding the project registration within 30 days, as specified.

Senate Amendments

1. Require the awarding body to provide notice to the DIR if the total amount of the contract change exceeds specified thresholds.
2. Exempt projects of awarding bodies operating labor compliance programs that are approved and monitored by the DIR and covered by a valid project labor agreement.

COMMENTS

This measure will help promote equity and benefit underserved and marginalized communities by providing enhanced transparency for public works projects that encounter significant changes after they have begun. Providing this additional transparency will assist in ensuring that contractors with a history of egregious labor violations are not utilizing taxpayer dollars, which in return will aid in ensuring employees on public works projects receive just compensation for the wages and benefits earned while employed on the project. This added transparency will additionally help in ensuring that apprentices from state approved apprenticeship programs are being dispatched in accordance with public works law, which will assist in providing a path to middle class for those seeking a career in the construction industry.

According to the Author

The author points out that "while the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the DIR.

This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change."

Also according to the author, "It is important that there is an open transparent process in public works projects when it comes to spending our precious tax dollars. Assembly Bill 1890 helps ensure that changes to public works projects are transparent and made available to the public."

Arguments in Support

The International Union of Operating Engineers, Cal-Nevada Conference, sponsor of this measure, states "In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.

Specifically, the bill would require awarding agencies of public works projects to update their project registration with the Department of Industrial Relations in situations when a contractor or subcontractor performing work on an existing public works project is changed, or the total cost of the public works contract changes by specified amounts."

Arguments in Opposition

The City of Thousand Oaks has taken an oppose unless amended position to this measure. They argue this bill, "would burden local agencies with new notification requirements for public works contracts and impose new penalties."

Other

The California Special Districts Association and the California State Association of Counties removes it opposition following the amendments of August 05, 2024. They appreciate the efforts of the author and the stakeholders in working to improve this measure

FISCAL COMMENTS

According to the Senate Appropriations Committee pursuant to Senate Rule 28.8 negligible costs.

VOTES:

ASM LABOR AND EMPLOYMENT: 7-0-0

YES: Ortega, Flora, Alanis, Wendy Carrillo, Lee, Ward, Zbur

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ABS, ABST OR NV: Wendy Carrillo

ASSEMBLY FLOOR: 72-0-8

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Arambula, Boerner, Bonta, Bryan, Cervantes, Megan Dahle, Essayli, Mathis

SENATE FLOOR: 40-0-0

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

UPDATED

VERSION: August 5, 2024

CONSULTANT: Lorie Alvarez / L. & E. / (916) 319-2091 FN: 0003748

 THIRD READING  

Bill No: AB 1890

Author: Joe Patterson (R), et al.

Amended: 8/5/24 in Senate

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/5/24

AYES: Smallwood-Cuevas, Wilk, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 72-0, 4/18/24 (Consent) - See last page for vote

SUBJECT: Public works: prevailing wage

SOURCE: California-Nevada Conference of Operating Engineers

DIGEST:

This bill requires a body awarding a public works contract to notify the Department of Industrial Relations (DIR), within 30 days, of any changes or additions regarding the project registration that involve either a change in the identity of a contractor or subcontractor performing the work or a change in the total amount of the contract, pursuant to specified cost thresholds. This bill exempts projects of awarding bodies operating labor compliance programs.

Senate Floor Amendments of 8/5/24 1) create a threshold to determine when or if awarding bodies need to notify DIR of a change in the total amount of a public works contract; 2) exempt projects of awarding bodies operating labor compliance programs approved by DIR and covered by a valid project labor agreement.

ANALYSIS:

Existing law:

1. Establishes DIR, within the Labor and Workforce Development Agency (LWDA), to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. (Labor Code §50-50.9)
2. Requires that not less than the general prevailing rate of per diem wages be paid to all workers employed on a “public works” project costing over $1,000 dollars and imposes misdemeanor penalties for violation of this requirement. (Labor Code §1771)
3. Defines “public work” to include, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by a public utility company pursuant to order of the Public Utilities Commission or other public authority. (Labor Code §1720(a))
4. Requires contractors and subcontractors to register with DIR, as specified, to be qualified to bid on, be listed in a bid proposal, or engage in the performance for any public work contract. (Labor Code §1725.5)
5. Requires an awarding body to provide notice to DIR of any public works contract, within 30 days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. (Labor Code §1773.3(a))
6. Provides that the awarding body’s notice of a public works contract be transmitted electronically in a format specified by DIR and shall include the name and registration number issued by DIR of the contractor and any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, jobsite location, and any additional information the department specifies. (Labor Code §1773.3(a))
7. Requires that DIR make the contract award information provided by awarding bodies available for public review on the department’s website. (Labor Code §1773.3(b))
8. Provides that an awarding body that fails to notify DIR of a public works project or that enters into a contract with or permits an unregistered contractor or subcontractor to engage in the performance of any public work shall, in addition to any other sanction or penalty authorized by law, be subject to a civil penalty of $100 for each day in violation, not to exceed an aggregate penalty of 10,000 for each project. (Labor Code §1773.3(c)(1))
9. Specifies the Labor Commissioner (LC) when determining the severity of a violation of the requirements stated above, under 9), may waive the penalty for a first time violation that was unintentional and did not hinder the LC’s ability to monitor and enforce compliance or that was made in good faith. (Labor Code §§1773.3(c), §1775)
10. Provides that whenever the LC determines that an awarding body has willfully violated public works law with respect to two or more public works contracts or projects in any 12-month period, the awarding body shall be ineligible to receive state funding or financial assistance for any construction project it undertakes for one year. (Labor Code §1773.3(g))

This bill:

1. Requires an awarding body, within 30 days, to provide notice to DIR of any changes or additions regarding the project registration that involve any of the following:
2. A change in the identity of a contractor or subcontractor performing work on the project.
3. For projects under $30,000, a change in the total amount of the contract if the change results in the total contract value exceeding $30,000.
4. For projects over $30,000, a change in the total amount of the contract that exceeds the lesser of either 25 percent of the original contract price or $200,000.
5. Exempts projects of awarding bodies operating labor compliance programs approved and monitored by DIR, that are covered by a valid project labor agreement from the project updates required by 1) above.

Background

1. Public Works Registration Requirements. All awarding bodies and contractors working on “public works” projects are required to abide by a set of laws that ensure public funds are used responsibly. Among other things, these laws require awarding bodies to notify DIR of public works contracts, as specified, and require contractors and subcontractors to register with DIR before they can bid or work on a public works project. Failure to register a project with DIR can result in civil penalties and potential debarment. Before contractors and subcontractors can register with DIR online, they must have workers’ compensation insurance, not have any delinquent unpaid wage or penalty assessments, and not be under federal investigation or state debarment. Bidding or working on a public works project without being registered will result in a $2,000 penalty. Additionally, awarding bodies caught using unregistered contractors are subject to civil penalties.

The registration requirements above help prevent unlicensed contractors with a history of labor violations from participating in public works projects and receiving public funds. The LC’s Office also uses the information to track and monitor projects.

1. Public Works Contract Thresholds. Awarding bodies and contractors have different obligations depending on the value of the public works project. For example, the registration requirements described above only apply to construction, alteration, demolition, installation, or repair work valued at $25,000 or more. Public works law mandates the use of apprentices on projects that cost upwards of $30,000. Occasionally, the prevailing wage rates paid to workers change depending on the value of the project. This variation in law can make it difficult for the LC’s office to identify all applicable public works requirements when reviewing outdated information.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/5/24)

California-Nevada Conference of Operating Engineers (Source)

Air Conditioning Sheet Metal Association
California Association of Sheet Metal & Air Conditioning Contractors National Association
California Construction & Industrial Materials Association
California Labor Federation
California Legislative Conference of Plumbing, Heating & Piping Industry
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California Teamsters Public Affairs Council
Construction Employers' Association
Construction Industry Force Account Council
District Council of Iron Workers of The State of California and Vicinity
Finishing Contractors Association of Southern California
National Electrical Contractors Association
Northern California Allied Trades
Northern California Floor Covering Association
Southern California Contractors Association
Southern California Glass Management Association
State Building and Construction Trades Council
United Contractors
Wall and Ceiling Alliance
Western Line Constructors Chapter, Inc., NECA, INC.
Western Painting and Coating Contractors Association
Western States Council Sheet Metal, Air, Rail and Transportation
Western Wall and Ceiling Contractors Association

OPPOSITION: (Verified 8/5/24)

City of Colton

City of Oceanside

City of Rancho Cucamonga

City of Santa Barbara
City of Thousand Oaks
League of California Cities

ARGUMENTS IN SUPPORT: According to the sponsors of the measure, the California-Nevada Conference of Operating Engineers, “While the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the Department of Industrial Relations.

“This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change.

“In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.”

ARGUMENTS IN OPPOSITION: The City of Rancho Cucamonga is opposed to the bill, stating:

“Under AB 1890, we would be required to provide a new notification to reflect any changes of subcontractors. Local agencies are already required to complete and submit a Public Works and Prevailing Wage Projects Registration (PWC-100) to the Department of Industrial Relations (DIR) with a list of the selected project general contractor/prime contractor (GC). GCs maintain complete responsibility for a project’s execution and duration, which includes hiring and managing multiple subcontractors for the myriad of project components. Therefore, it appears more appropriate for the GC to notify the DIR, not the local agency.”

ASSEMBLY FLOOR: 72-0, 4/18/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Arambula, Boerner, Bonta, Bryan, Cervantes, Megan Dahle, Essayli, Mathis

Prepared by: Emma Bruce / L., P.E. & R. / (916) 651-1556

8/16/24 17:03:18

**** END ****

 THIRD READING  

Bill No: AB 1890

Author: Joe Patterson (R), et al.

Amended: 8/5/24 in Senate

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/5/24

AYES: Smallwood-Cuevas, Wilk, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 72-0, 4/18/24 (Consent) - See last page for vote

SUBJECT: Public works: prevailing wage

SOURCE: California-Nevada Conference of Operating Engineers

DIGEST:

This bill requires a body awarding a public works contract to notify the Department of Industrial Relations (DIR), within 30 days, of any changes or additions regarding the project registration that involve either a change in the identity of a contractor or subcontractor performing the work or a change in the total amount of the contract, pursuant to specified cost thresholds. This bill exempts projects of awarding bodies operating labor compliance programs.

Senate Floor Amendments of 8/5/24 1) create a threshold to determine when or if awarding bodies need to notify DIR of a change in the total amount of a public works contract; 2) exempt projects of awarding bodies operating labor compliance programs approved by DIR and covered by a valid project labor agreement.

ANALYSIS:

Existing law:

1. Establishes DIR, within the Labor and Workforce Development Agency (LWDA), to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. (Labor Code §50-50.9)
2. Requires that not less than the general prevailing rate of per diem wages be paid to all workers employed on a “public works” project costing over $1,000 dollars and imposes misdemeanor penalties for violation of this requirement. (Labor Code §1771)
3. Defines “public work” to include, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by a public utility company pursuant to order of the Public Utilities Commission or other public authority. (Labor Code §1720(a))
4. Requires contractors and subcontractors to register with DIR, as specified, to be qualified to bid on, be listed in a bid proposal, or engage in the performance for any public work contract. (Labor Code §1725.5)
5. Requires an awarding body to provide notice to DIR of any public works contract, within 30 days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. (Labor Code §1773.3(a))
6. Provides that the awarding body’s notice of a public works contract be transmitted electronically in a format specified by DIR and shall include the name and registration number issued by DIR of the contractor and any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, jobsite location, and any additional information the department specifies. (Labor Code §1773.3(a))
7. Requires that DIR make the contract award information provided by awarding bodies available for public review on the department’s website. (Labor Code §1773.3(b))
8. Provides that an awarding body that fails to notify DIR of a public works project or that enters into a contract with or permits an unregistered contractor or subcontractor to engage in the performance of any public work shall, in addition to any other sanction or penalty authorized by law, be subject to a civil penalty of $100 for each day in violation, not to exceed an aggregate penalty of 10,000 for each project. (Labor Code §1773.3(c)(1))
9. Specifies the Labor Commissioner (LC) when determining the severity of a violation of the requirements stated above, under 9), may waive the penalty for a first time violation that was unintentional and did not hinder the LC’s ability to monitor and enforce compliance or that was made in good faith. (Labor Code §§1773.3(c), §1775)
10. Provides that whenever the LC determines that an awarding body has willfully violated public works law with respect to two or more public works contracts or projects in any 12-month period, the awarding body shall be ineligible to receive state funding or financial assistance for any construction project it undertakes for one year. (Labor Code §1773.3(g))

This bill:

1. Requires an awarding body, within 30 days, to provide notice to DIR of any changes or additions regarding the project registration that involve any of the following:
2. A change in the identity of a contractor or subcontractor performing work on the project.
3. For projects under $30,000, a change in the total amount of the contract if the change results in the total contract value exceeding $30,000.
4. For projects over $30,000, a change in the total amount of the contract that exceeds the lesser of either 25 percent of the original contract price or $200,000.
5. Exempts projects of awarding bodies operating labor compliance programs approved and monitored by DIR, that are covered by a valid project labor agreement from the project updates required by 1) above.

Background

1. Public Works Registration Requirements. All awarding bodies and contractors working on “public works” projects are required to abide by a set of laws that ensure public funds are used responsibly. Among other things, these laws require awarding bodies to notify DIR of public works contracts, as specified, and require contractors and subcontractors to register with DIR before they can bid or work on a public works project. Failure to register a project with DIR can result in civil penalties and potential debarment. Before contractors and subcontractors can register with DIR online, they must have workers’ compensation insurance, not have any delinquent unpaid wage or penalty assessments, and not be under federal investigation or state debarment. Bidding or working on a public works project without being registered will result in a $2,000 penalty. Additionally, awarding bodies caught using unregistered contractors are subject to civil penalties.

The registration requirements above help prevent unlicensed contractors with a history of labor violations from participating in public works projects and receiving public funds. The LC’s Office also uses the information to track and monitor projects.

1. Public Works Contract Thresholds. Awarding bodies and contractors have different obligations depending on the value of the public works project. For example, the registration requirements described above only apply to construction, alteration, demolition, installation, or repair work valued at $25,000 or more. Public works law mandates the use of apprentices on projects that cost upwards of $30,000. Occasionally, the prevailing wage rates paid to workers change depending on the value of the project. This variation in law can make it difficult for the LC’s office to identify all applicable public works requirements when reviewing outdated information.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/5/24)

California-Nevada Conference of Operating Engineers (Source)

Air Conditioning Sheet Metal Association
California Association of Sheet Metal & Air Conditioning Contractors National Association
California Construction & Industrial Materials Association
California Labor Federation
California Legislative Conference of Plumbing, Heating & Piping Industry
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California Teamsters Public Affairs Council
Construction Employers' Association
Construction Industry Force Account Council
District Council of Iron Workers of The State of California and Vicinity
Finishing Contractors Association of Southern California
National Electrical Contractors Association
Northern California Allied Trades
Northern California Floor Covering Association
Southern California Contractors Association
Southern California Glass Management Association
State Building and Construction Trades Council
United Contractors
Wall and Ceiling Alliance
Western Line Constructors Chapter, Inc., NECA, INC.
Western Painting and Coating Contractors Association
Western States Council Sheet Metal, Air, Rail and Transportation
Western Wall and Ceiling Contractors Association

OPPOSITION: (Verified 8/5/24)

California Special Districts Association
California State Association of Counties
City of Colton

City of Oceanside

City of Rancho Cucamonga

City of Santa Barbara
City of Thousand Oaks
League of California Cities

ARGUMENTS IN SUPPORT: According to the sponsors of the measure, the California-Nevada Conference of Operating Engineers, “While the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the Department of Industrial Relations.

“This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change.

“In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.”

ARGUMENTS IN OPPOSITION: The California Special Districts Association and the California State Association of Counties are opposed unless amended to the measure arguing, “Under AB 1890, local agencies would be required to provide a new notification to the state to reflect any changes of subcontractors. The awarding body may not be the appropriate reporting party for this type of notification as it does not contract directly with these entities. We suggest that this be removed from the measure and short of that, that the current process of reporting on subcontractor changes be re-evaluated to achieve the aims of the measure without burdening local agencies and subjecting them to liability.

“Additionally, AB 1890 would require a local agency to notify the DIR if there is a change order resulting in $10,000 or more in the project. This threshold amount is low enough to generate scores or hundreds of new reports for local agency staff to log the already public records that are generated for eventualities often beyond the control of the awarding agency. We remain committed to working with the sponsors and author to address ways to continue to provide transparency and essential services without adding additional burdens or costs.”

ASSEMBLY FLOOR: 72-0, 4/18/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Arambula, Boerner, Bonta, Bryan, Cervantes, Megan Dahle, Essayli, Mathis

Prepared by: Emma Bruce / L., P.E. & R. / (916) 651-1556

8/7/24 17:51:12

**** END ****

 THIRD READING  

Bill No: AB 1890

Author: Joe Patterson (R), et al.

Introduced: 1/22/24

Vote: 21

SENATE LABOR, PUB. EMP. & RET. COMMITTEE: 5-0, 6/5/24

AYES: Smallwood-Cuevas, Wilk, Cortese, Durazo, Laird

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 72-0, 4/18/24 (Consent) - See last page for vote

SUBJECT: Public works: prevailing wage

SOURCE: California-Nevada Conference of Operating Engineers

DIGEST:

This bill requires a body awarding a public works contract to notify the Department of Industrial Relations (DIR), within 30 days, of any changes or additions regarding the project registration that involve either a change in the identity of a contractor or subcontractor performing the work or a change in the total amount of the contract if the change exceeds ten thousand dollars ($10,000).

ANALYSIS:

Existing law:

1. Establishes DIR, within the Labor and Workforce Development Agency (LWDA), to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. (Labor Code §50-50.9)
2. Requires that not less than the general prevailing rate of per diem wages be paid to all workers employed on a “public works” project costing over $1,000 dollars and imposes misdemeanor penalties for violation of this requirement. (Labor Code §1771)
3. Defines “public work” to include, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by a public utility company pursuant to order of the Public Utilities Commission or other public authority. (Labor Code §1720(a))
4. Requires contractors and subcontractors to register with DIR, as specified, to be qualified to bid on, be listed in a bid proposal, or engage in the performance for any public work contract. (Labor Code §1725.5)
5. Requires an awarding body to provide notice to DIR of any public works contract, within 30 days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. (Labor Code §1773.3(a))
6. Specifies that awarding bodies for public works contracts awarded pursuant to Section 10122, 20113, 22050, or 22050 of the Public Contract Code can notify DIR within 30 days after the award, but in no event later than the last day in which a contractor has workers employed upon the public work. (Labor Code §1773.3(a))
7. Provides that the awarding body’s notice of a public works contract be transmitted electronically in a format specified by DIR and shall include the name and registration number issued by DIR of the contractor and any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, jobsite location, and any additional information the department specifies. (Labor Code §1773.3(a)).
8. Requires that DIR make the contract award information provided by awarding bodies available for public review on the department’s website. (Labor Code §1773.3(b))
9. Provides that an awarding body that fails to notify DIR of a public works project or that enters into a contract with or permits an unregistered contractor or subcontractor to engage in the performance of any public work shall, in addition to any other sanction or penalty authorized by law, be subject to a civil penalty of $100 for each day in violation, not to exceed an aggregate penalty of 10,000 for each project. (Labor Code §1773.3(c)(1))
10. Specifies the Labor Commissioner (LC) when determining the severity of a violation of the requirements stated above, under 9), may waive the penalty for a first time violation that was unintentional and did not hinder the LC’s ability to monitor and enforce compliance or that was made in good faith. (Labor Code §§1773.3(c), 1775)
11. Provides that whenever the LC determines that an awarding body has willfully violated public works law with respect to two or more public works contracts or projects in any 12-month period, the awarding body shall be ineligible to receive state funding or financial assistance for any construction project it undertakes for one year. (Labor Code §1773.3(g))

This bill:

1. Requires an awarding body to provide notice to DIR of any changes or additions regarding the project registration that involve either of the following:
2. A change in the identity of a contractor or subcontractor performing work on the project.
3. A change in the total amount of the contract if the change exceeds ten thousand dollars ($10,000).
4. Requires the updated notification be provided to DIR within 30 days of the change.

Background

Public Works Registration Requirements. All awarding bodies and contractors working on “public works” projects are required to abide by a set of laws that ensure public funds are used responsibly. Among other things, these laws require awarding bodies to notify DIR of public works contracts, as specified, and require contractors and subcontractors to register with DIR before they can bid or work on a public works project. Awarding bodies use the PWC-100 form on DIR’s website to fulfill this notification requirement. The form contains the name and registration number issued by DIR of the contractor and any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, and the jobsite location. Once a PWC-100 form is on file, awarding bodies are able to submit their monthly electronic certified payroll records online, another requirement of public works law. Failure to register a project with DIR can result in civil penalties and potential debarment.

Before contractors and subcontractors can register with DIR online, they must have workers’ compensation insurance, not have any delinquent unpaid wage or penalty assessments, and not be under federal investigation or state debarment. Bidding or working on a public works project without being registered will result in a $2,000 penalty. Contractors and subcontractors who repeatedly violate this requirement may be disqualified from working in public works for up to 12 months at a time. Additionally, awarding bodies caught using unregistered contractors are subject to civil penalties.

The registration requirements above help prevent unlicensed contractors with a history of labor violations from participating in public works projects and receiving public funds. The LC’s Office also uses the information to track and monitor projects. AB 1890 would build on existing law by requiring awarding bodies to update their registration when there are significant project changes.

Public Works Contract Thresholds. Awarding bodies and contractors have different obligations depending on the value of the public works project. For example, the registration requirements described above only apply to construction, alteration, demolition, installation, or repair work valued at $25,000 or more. For maintenance work, registration is required for projects valued at $15,000 or more. Public works law mandates the use of apprentices on projects that cost upwards of $30,000. Occasionally, the prevailing wage rates paid to workers change depending on the value of the project. This variation in law can make it difficult for the LC’s office to identify all applicable public works requirements when reviewing an outdated project PWC-100 registration form.

Related/Prior Legislation

SB 96 (Committee on Budget and Fiscal Review, Chapter 28, Statutes of 2017), among other things, required registration for new public works projects valued at $25,000 or more and for maintenance projects valued at $15,000 more.

SB 854 (Committee on Budget and Fiscal Review, Chapter 28, Statutes of 2014), among other things, established the requirement for contractors and subcontractors to register with DIR before becoming eligible to bid or work on public works projects.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 6/17/24)

California-Nevada Conference of Operating Engineers (source)

Air Conditioning Sheet Metal Association
California Association of Sheet Metal & Air Conditioning Contractors National Association
California Construction & Industrial Materials Association
California Labor Federation
California Legislative Conference of Plumbing, Heating & Piping Industry
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California Teamsters Public Affairs Council
Construction Employers' Association
Construction Industry Force Account Council
District Council of Iron Workers of The State of California and Vicinity
Finishing Contractors Association of Southern California
National Electrical Contractors Association (NECA)
Northern California Allied Trades
Northern California Floor Covering Association
Southern California Contractors Association
Southern California Glass Management Association (SCGMA)
State Building and Construction Trades Council
United Contractors (UCON)
Wall and Ceiling Alliance
Western Line Constructors Chapter, Inc., NECA, INC.
Western Painting and Coating Contractors Association
Western States Council Sheet Metal, Air, Rail and Transportation
Western Wall and Ceiling Contractors Association (WWCCA)

OPPOSITION: (Verified 6/17/24)

California Special Districts Association
California State Association of Counties

City of Oceanside
League of California Cities

ARGUMENTS IN SUPPORT:

According to the sponsors of the measure, the California-Nevada Conference of Operating Engineers:

“While the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the Department of Industrial Relations.

“This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change.

“In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.”

ARGUMENTS IN OPPOSITION:

The California Special Districts Association and the California State Association of Counties are opposed unless amended to the measure arguing:

“Under AB 1890, local agencies would be required to provide a new notification to the state to reflect any changes of subcontractors. The awarding body may not be the appropriate reporting party for this type of notification as it does not contract directly with these entities. We suggest that this be removed from the measure and short of that, that the current process of reporting on subcontractor changes be re-evaluated to achieve the aims of the measure without burdening local agencies and subjecting them to liability.

“Additionally, AB 1890 would require a local agency to notify the DIR if there is a change order resulting in $10,000 or more in the project. This threshold amount is low enough to generate scores or hundreds of new reports for local agency staff to log the already public records that are generated for eventualities often beyond the control of the awarding agency. We remain committed to working with the sponsors and author to address ways to continue to provide transparency and essential services without adding additional burdens or costs.”

ASSEMBLY FLOOR: 72-0, 4/18/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Arambula, Boerner, Bonta, Bryan, Cervantes, Megan Dahle, Essayli, Mathis

Prepared by: Emma Bruce / L., P.E. & R. / (916) 651-1556

6/18/24 10:49:49

**** END ****

SENATE COMMITTEE ON LABOR, PUBLIC EMPLOYMENT AND RETIREMENT

Senator Lola Smallwood-Cuevas, Chair

2023 - 2024 Regular

Bill No: AB 1890 Hearing Date: June 5, 2024

SUBJECT: Public works: prevailing wage

KEY ISSUE

This bill requires a body awarding a public works contract to notify the Department of Industrial Relations (DIR), within 30 days, of any changes or additions regarding the project registration that involve either a change in the identity of a contractor or subcontractor performing the work or a change in the total amount of the contract if the change exceeds ten thousand dollars ($10,000).

ANALYSIS

Existing law:

1. Establishes DIR, within the Labor and Workforce Development Agency (LWDA), to foster, promote, and develop the welfare of the wage earners of California, to improve their working conditions, and to advance their opportunities for profitable employment. (Labor Code §50-50.9)
2. Requires that not less than the general prevailing rate of per diem wages be paid to all workers employed on a “public works” project costing over $1,000 dollars and imposes misdemeanor penalties for violation of this requirement. (Labor Code §1771)
3. Defines “public work” to include, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by a public utility company pursuant to order of the Public Utilities Commission or other public authority. (Labor Code §1720(a))
4. Requires contractors and subcontractors to register with DIR, as specified, to be qualified to bid on, be listed in a bid proposal, or engage in the performance for any public work contract. (Labor Code §1725.5)
5. Requires an awarding body to provide notice to DIR of any public works contract, within 30 days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. (Labor Code §1773.3(a))
6. Specifies that awarding bodies for public works contracts awarded pursuant to Section 10122, 20113, 22050, or 22050 of the Public Contract Code can notify DIR within 30 days after the award, but in no event later than the last day in which a contractor has workers employed upon the public work. (Labor Code §1773.3(a))
7. Provides that the awarding body’s notice of a public works contract be transmitted electronically in a format specified by DIR and shall include the name and registration number issued by DIR of the contractor and any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, jobsite location, and any additional information the department specifies. (Labor Code §1773.3(a)).
8. Requires that DIR make the contract award information provided by awarding bodies available for public review on the department’s website. (Labor Code §1773.3(b))
9. Provides that an awarding body that fails to notify DIR of a public works project or that enters into a contract with or permits an unregistered contractor or subcontractor to engage in the performance of any public work shall, in addition to any other sanction or penalty authorized by law, be subject to a civil penalty of $100 for each day in violation, not to exceed an aggregate penalty of 10,000 for each project. (Labor Code §1773.3(c)(1))
10. Specifies the Labor Commissioner (LC) when determining the severity of a violation of the requirements stated above, under 9), may waive the penalty for a first time violation that was unintentional and did not hinder the LC’s ability to monitor and enforce compliance or that was made in good faith. (Labor Code §§1773.3(c), 1775)
11. Provides that whenever the LC determines that an awarding body has willfully violated public works law with respect to two or more public works contracts or projects in any 12-month period, the awarding body shall be ineligible to receive state funding or financial assistance for any construction project it undertakes for one year. (Labor Code §1773.3(g))

This bill:

1. Requires an awarding body to provide notice to DIR of any changes or additions regarding the project registration that involve either of the following:
2. A change in the identity of a contractor or subcontractor performing work on the project.
3. A change in the total amount of the contract if the change exceeds ten thousand dollars ($10,000).
4. Requires the updated notification be provided to DIR within 30 days of the change.

COMMENTS

1. Background:

Public Works Registration Requirements

All awarding bodies and contractors working on “public works” projects are required to abide by a set of laws that ensure public funds are used responsibly. Among other things, these laws require awarding bodies to notify DIR of public works contracts, as specified, and require contractors and subcontractors to register with DIR before they can bid or work on a public works project. Awarding bodies use the PWC-100 form on DIR’s website to fulfill this notification requirement. The form contains the name and registration number issued by DIR of the contractor and any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, and the jobsite location. Once a PWC-100 form is on file, awarding bodies are able to submit their monthly electronic certified payroll records online, another requirement of public works law. Failure to register a project with DIR can result in civil penalties and potential debarment.

Before contractors and subcontractors can register with DIR online, they must have workers’ compensation insurance, not have any delinquent unpaid wage or penalty assessments, and not be under federal investigation or state debarment. Bidding or working on a public works project without being registered will result in a $2,000 penalty. Contractors and subcontractors who repeatedly violate this requirement may be disqualified from working in public works for up to 12 months at a time. Additionally, awarding bodies caught using unregistered contractors are subject to civil penalties.

The registration requirements above help prevent unlicensed contractors with a history of labor violations from participating in public works projects and receiving public funds. The LC’s Office also uses the information to track and monitor projects. AB 1890 would build on existing law by requiring awarding bodies to update their registration when there are significant project changes.

Public Works Contract Thresholds

Awarding bodies and contractors have different obligations depending on the value of the public works project. For example, the registration requirements described above only apply to construction, alteration, demolition, installation, or repair work valued at $25,000 or more. For maintenance work, registration is required for projects valued at $15,000 or more. Public works law mandates the use of apprentices on projects that cost upwards of $30,000. Occasionally, the prevailing wage rates paid to workers change depending on the value of the project. This variation in law can make it difficult for the LC’s office to identify all applicable public works requirements when reviewing an outdated project PWC-100 registration form.

2. Need for this bill?

According to the author:

“[AB 1890] is trying to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects. It would require [the] State’s Public Works Project Registration requirements to mandate that awarding agencies update their project registration when there are significant changes to their projects.

The lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement.”

3. Proponent Arguments:

According to the sponsors of the measure, the California-Nevada Conference of Operating Engineers:

“While the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the Department of Industrial Relations.

This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change.

In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.”

4. Opponent Arguments:

The California Special Districts Association and the California State Association of Counties are opposed unless amended to the measure arguing:

“Under AB 1890, local agencies would be required to provide a new notification to the state to reflect any changes of subcontractors. The awarding body may not be the appropriate reporting party for this type of notification as it does not contract directly with these entities. We suggest that this be removed from the measure and short of that, that the current process of reporting on subcontractor changes be re-evaluated to achieve the aims of the measure without burdening local agencies and subjecting them to liability.

Additionally, AB 1890 would require a local agency to notify the DIR if there is a change order resulting in $10,000 or more in the project. This threshold amount is low enough to generate scores or hundreds of new reports for local agency staff to log the already public records that are generated for eventualities often beyond the control of the awarding agency. We remain committed to working with the sponsors and author to address ways to continue to provide transparency and essential services without adding additional burdens or costs.”

5. Prior Legislation:

SB 1162 (Cortese, 2024) would require contractors and subcontractors to include a worker’s date of birth in existing public works payroll records and in existing monthly compliance reports made to the public entity or other awarding body for projects with a skilled and trained workforce requirement. SB 1162 is pending referral in the Assembly.

SB 96 (Committee on Budget and Fiscal Review, Chapter 28, Statutes of 2017), among other things, required registration for new public works projects valued at $25,000 or more and for maintenance projects valued at $15,000 more.

SB 854 (Committee on Budget and Fiscal Review, Chapter 28, Statutes of 2014), among other things, established the requirement for contractors and subcontractors to register with DIR before becoming eligible to bid or work on public works projects.

SUPPORT

California-Nevada Conference of Operating Engineers (Sponsor)

Air Conditioning Sheet Metal Association

California Association of Sheet Metal & Air Conditioning Contractors National Association

California Construction & Industrial Materials Association

California Labor Federation

California Legislative Conference of Plumbing, Heating & Piping Industry

California State Association of Electrical Workers

California State Council of Laborers

California State Pipe Trades Council

California Teamsters Public Affairs Council

Construction Employers' Association

Construction Industry Force Account Council

District Council of Iron Workers of the State of California and Vicinity

Finishing Contractors Association of Southern California

National Electrical Contractors Association (NECA)

Northern California Allied Trades

Northern California Floor Covering Association

Southern California Contractors Association

Southern California Glass Management Association (SCGMA)

State Building & Construction Trades Council of California

United Contractors (UCON)

Wall and Ceiling Alliance

Western Line Constructors Chapter, Inc., Neca, INC.

Western Painting and Coating Contractors Association

Western States Council Sheet Metal, Air, Rail and Transportation

Western Wall and Ceiling Contractors Association (WWCCA)

OPPOSITION

California Special Districts Association

California State Association of Counties

League of California Cities

-- END --

Date of Hearing: April 10, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 1890

Author:(Joe Patterson) – As Introduced Ver:January 22, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill requires a body awarding a public works contract to provide notice to the Department of Industrial Relations (DIR) when there is (1) a change in identity of a contractor or subcontractor performing work on the project, or (2) a change in the contract amount, if the change is in excess of $10,000, within 30 days of the change in amount.

FISCAL EFFECT:

1. Minor and absorbable costs to DIR to receive additional notifications from awarding bodies.
2. Likely minor and absorbable costs across state and local agencies awarding public works contracts to provide additional notifications to DIR when certain contract changes occur, as the public agency overseeing the project should already be attentive to such changes.

By requiring a local agency to notify DIR of certain contract changes, this bill may create a state-mandated local program. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, the local agency could claim reimbursement from the state.

COMMENTS:

1. Purpose. According to the author, “existing law is silent on situations in which details of an existing public works project change while the project is occurring.” The author contends such “lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects” and hampers the ability of labor compliance entities and the public to monitor projects.
2. Support and Opposition. This bill is sponsored by the International Union of Operating Engineers, Cal-Nevada Conference, which argues that clarifying “awarding agencies are expected to update their project registration when there are significant changes” will “protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects.” This bill is also supported by various labor organizations.

This bill has no registered opposition, but the California Special Districts Association (CSDA) expresses concerns that “AB 1890 risks adding to the administrative burden and costs in the public works contracting process, potentially subjecting public entities to increased fines and costs, without clear benefits to the communities that special districts serve.” CSDA argues a “project may generate dozens, if not hundreds, of change orders” with details already subject to disclosure via the public records process.

1. DIR Oversight of Public Works Projects. Existing law requires a contractor to register with DIR as a qualification to bid on and execute a public works contract. The contractor must pay an application fee, make disclosures regarding unpaid wages, and provide evidence of workers’ compensation coverage, amongst other qualifications, so DIR can maintain an online list of registered contractors.

Similarly, a body awarding a public works contract must notify DIR of any such contract within 30 days of the award, but no later than the first day in which a contractor employs workers on the project. The Labor Commissioner may issue a citation for civil penalties against an awarding body that fails to provide this notice or enters into a contract with an unregistered contractor or subcontractor.

This bill requires an awarding body to additionally notify DIR if there are subsequent changes to a contractor’s or subcontractor’s identity, or if the contract amount changes by more than $10,000. The sponsor notes DIR’s public works project registration website already includes an “Update A Project” link and that the value of a project can subject the project to different rules, such as apprenticeship program requirements and wage determinations. Thus, the sponsor contends requiring updates can help related DIR compliance efforts. Although committee staff could not quantify how many additional notifications may result due to this bill, the type of information subject to disclosure should be readily apparent to a public agency overseeing a project.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: March 13, 2024

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Liz Ortega, Chair

ABPCA Bill Id:AB 1890 (

Author:Joe Patterson) – As Introduced Ver:January 22, 2024

SUBJECT: Public works: prevailing wage

SUMMARY: Requires an awarding body of public works projects to provide notice to the Department of Industrial Relations (DIR) of any changes or additions regarding the project registration that involve either of the following:

1. A change in the identity of a contractor or subcontractor performing work on the project.
2. A change in the total amount of the contract if the change exceeds ten thousand dollars ($10,000). The updated notification must be provided to the DIR within 30 days of the change.

EXISTING LAW:

1. Requires an awarding body to provide notice to the DIR of any public works contract subject to the requirements of this chapter, within 30 days of the award, but in no event later than the first day in which a contractor has workers employed upon the public work. (Labor Code section 1773.3)
2. States notwithstanding paragraph (1) and subject to the discretion of the Labor Commissioner, an awarding body shall provide notice to the DIR of any public works contract awarded pursuant to Section 10122, 20113, 20654, or 22050 of the Public Contract Code that is subject to the requirements of this chapter within 30 days after the award of the contract, but in no event later than the last day in which a contractor has workers employed upon the public work. (Labor Code section 1773.3)
3. Requires the notice to be transmitted electronically in a format specified by the DIR and shall include the name and registration number issued by the DIR pursuant to Section 1725.5 of the contractor, the name and registration number issued by the DIR pursuant to Section 1725.5 of any subcontractor listed on the successful bid, the bid and contract award dates, the contract amount, the estimated start and completion dates, jobsite location, and any additional information the department specifies that aids in the administration and enforcement. (Labor Code section 1773.3)

FISCAL EFFECT: Unknown

COMMENTS: The author points out that “while the State has strong public works notification requirements for projects that are set to begin, existing law is silent on situations in which details of an existing public works project change while the project is occurring. In situations in which a contractor or subcontractor is changed during a project, or in situations in which the total cost of public works contract changes, existing law provides no requirement to update the project registration with the DIR.

This lack of transparency opens the door for unlicensed contractors who could have a history of egregious labor violations to participate in public works projects while hampering the ability of the Division of Labor Standards Enforcement, labor compliance entities, and the public to monitor these projects as they have no knowledge of there being a change.”

Also according to the author, “It is important that there is an open transparent process in public works projects when it comes to spending our precious tax dollars. Assembly Bill 1890 helps ensure that changes to public works projects are transparent and made available to the public.”

AB 1890 (Patterson) will help promote equity and benefit underserved and marginalized communities by providing enhanced transparency for public works projects that encounter significant changes after they have begun. Providing this additional transparency will assist in ensuring that contractors with a history of egregious labor violations are not utilizing taxpayer dollars, which in return will aid in ensuring employees on public works projects receive just compensation for the wages and benefits earned while employed on the project. This added transparency will additionally help in ensuring that apprentices from state approved apprenticeship programs are being dispatched in accordance with public works law, which will assist in providing a path to middle class for those seeking a career in the construction industry.

Arguments in Support

The International Union of Operating Engineers, Cal-Nevada Conference, sponsor of this measure, states “In an effort to protect taxpayer dollars and ensure that law abiding contractors are participating in public works projects, AB 1890 (Patterson) would update the States Public Works Project Registration requirements to clarify that awarding agencies are expected to update their project registration when there are significant changes to their projects.

Specifically, the bill would require awarding agencies of public works projects to update their project registration with the Department of Industrial Relations in situations when a contractor or subcontractor performing work on an existing public works project is changed, or the total cost of the public works contract changes by $10,000 or more.”

No known opposition.

The California Special Districts Association expresses concern stating, “AB 1890 risks adding to the administrative burden and costs in the public works contracting process, potentially subjecting public entities to increased fines and costs, without clear benefits to the communities that special districts serve.”

REGISTERED SUPPORT / OPPOSITION:

Support

International Union of Operating Engineers, Cal-Nevada Conference (Sponsor)
California Labor Federation
California State Association of Electrical Workers
California State Council of Laborers
California State Pipe Trades Council
California Teamsters Public Affairs Council
District Council of Iron Workers of The State of California and Vicinity
State Building & Construction Trades Council of California
Western States Council Sheet Metal, Air, Rail and Transportation

Opposition

None on file.

Analysis Prepared by: Lorie Alvarez / L. & E. /