Existing law, the California Public Records Act, requires state and local agencies, as defined, to make their records available for public inspection, unless an exemption from disclosure applies. Existing law declares that access to information concerning the conduct of the peoples business is a fundamental and necessary right of every person in this state. Existing law requires specified state and local bodies to establish written guidelines for accessibility of records. Existing law requires the state and local bodies to post a copy of these guidelines in a conspicuous public place at the offices of these bodies, and to make available a copy of the guidelines upon request, free of charge, to any person requesting that bodys records.

This bill would additionally require an owner, developer, or their agents who receives public funds or the equivalent of public funds from a public agency to perform a public works project, as defined, to be subject to the act in connection with records that it prepares, owns, uses, or retains relating to that public works project. The bill would require the owner, developer, or their agents to establish written guidelines for accessibility of records. The bill would also require the owner, developer, or their agents to post a copy of these guidelines in a conspicuous public place at the offices of these owners and developers, and to make available a copy of the guidelines upon request, free of charge, to any person requesting that owners or developers records.

The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect.

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Liz Ortega, Chair

ABPCA Bill Id:AB 2439 (

Author:Quirk-Silva) – As Amended Ver:April 1, 2024

SUBJECT: Public works: prevailing wages: access to records

SUMMARY: Requires an owner, developer, or the agent of an owner or developer, that, among other things, receives public funds from a public agency to perform specified public works projects, to make available specified records to joint labor-management committees, multiemployer Taft-Hartley trust funds, and nonprofits established to ensure compliance within the building and construction trades. Specifically, this bill:

1. Requires an owner, a developer, or the agent of an owner or developer, that, among other things, receives public funds from a public agency to perform specified public works projects, to make available upon written request from a joint labor-management committee, a multiemployer Taft-Hartley trust fund, or a nonprofit established to ensure compliance within the building and construction trades, specified public works records in their possession, including:
   1. Requests for bids and submitted bid documents, as specified;
   2. Final executed construction contracts, as specified;
   3. Inspection and work logs, as specified;
   4. Funding documentation, as specified;
   5. For any owner, developer, or agent of the owner or developer required to provide an enforceable commitment that a skilled and trained workforce will be used to complete a contract or project, the monthly reports required, as specified.
2. Provides that, for requests of contractors or subcontractors only, a joint labor-management committee, a multiemployer Taft-Hartley trust fund, or a nonprofit established to ensure compliance within the building and construction trades industry may request the records outlined in 1) above evidencing work performed by the contractor’s or subcontractor’s employees on a public works project and the statement of employer payments related to fringe benefits payments for the employees.
3. Provides that an owner, a developer, and the agent of an owner or developer is not responsible for the repercussions of a contractor or subcontractor failing to comply with 2) above.
4. Requires any records made available under these requirements to be redacted to prevent disclosure of social security numbers, but specifies that unredacted records may be made available to a joint labor-management committee or Taft-Hartley trust fund, as specified.
5. Requires an owner, a developer, the agent of an owner or developer, a contractor, and a subcontractor to comply with the provisions of the bill within 10 days after receipt of a written notice requesting the records.
6. Subjects an owner, a developer, the agent of an owner or developer, a contractor, and a subcontractor, for failing to comply with the provisions of this bill, to a penalty by the Labor Commissioner (LC), as specified, and would deposit the penalties into a specified fund.
7. Provides that the provisions above do not limit the public’s ability to request public records pertaining to public works projects as provided by existing law, including but not limited to, the California Public Records Act.

EXISTING STATE LAW:

1. Defines “public works,” for the purposes of regulating public works contracts, as, 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. Labor Code § 1720(a).
2. Specifies that, if the state or a political subdivision reimburses a private developer for costs that would normally be borne by the public, or provides directly or indirectly a public subsidy to a private development project that is de minimis in the context of the project, then the project is not subject to existing public works law. Labor Code § 1720(c)(3)(A).
3. Defines “de minimis” for purposes of 2) above to mean both less than $600,000 and less than 2 percent of the total project cost. Labor Code § 1720(c)(3)(B)(i).
4. 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.
5. Requires contractors and subcontractors, while performing public works, to furnish specified payroll records at least once a month directly to the LC, in an electronic format, in the manner prescribed by the LC, on the department’s internet website. Labor Code, § 1771.4 (a)(3).
6. Requires the Department of Industrial Relations (DIR), by July 1, 2024, to develop and implement an online database, accessible only to multiemployer Taft-Hartley trust funds and joint-labor management committees, of electronic certified payroll records submitted in compliance with public works requirements. Labor Code, §1771.4 (e).
7. Requires each contractor and subcontractor on a public works project to keep accurate payroll records, showing the name, address, social security number, work classification, straight time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker, or other employee employed by the contractor or subcontractor in connection with the public work. Labor Code § 1776(a).
8. Requires a certified copy of all payroll records enumerated in 7) above to be made available upon request by the public for inspection or for copies thereof, but requires that such a request be made through either the body awarding the contract or the Division of Labor Standards Enforcement (DLSE). Labor Code § 1776(b)(3).
9. Requires any copy of records made available for inspection as copies and furnished upon request to the public or any public agency to be marked or obliterated to prevent disclosure of an individual’s name, address, and social security number but specifies that any copy of records made available to a Taft-Hartley trust fund for the purposes of allocating contributions to participants be marked or obliterated only to prevent disclosure of an individual’s full social security number, as specified. Labor Code § 1776(e).

EXISTING FEDERAL LAW

Establishes Taft-Hartley trust funds, which are employee pension or welfare benefit trusts jointly administered by equal numbers of representatives of employees and employers, as specified. 29 U.S.C. § 186(c)(5) - (c)(8).

FISCAL EFFECT: Unknown

COMMENTS: Public works laws require that, among other things, prevailing wage is paid to workers on publicly-funded projects, as specified. In California, the prevailing wage rate is an hourly rate paid on public works projects that is often set in the terms of a collective bargaining agreement. According to the Department of Industrial Relations, the wage rate relies upon such factors as "the particular craft, classification or type of work within the locality and in the nearest labor market area (if majorities of such workers are paid at a single rate). If there is no single rate paid to a majority, then the single or modal rate being paid to the greater number of workers is prevailing."

Prevailing wage laws are intended to ensure that contractors are not awarded public works contracts by paying low wages and undercutting competitors who provide higher compensation. In this way, these laws create a level playing field by requiring an across-the-board rate for all bidders on publicly-subsidized projects.

To ensure compliance with various pay requirements under public works laws, contractors and subcontractors are required to submit their payroll records to the LC. In addition to the LC’s oversight, joint-labor management committees and multiemployer Taft-Hartley trust funds play a critical role in verifying the accuracy and thoroughness of payroll records, and filing complaints with the LC for suspected violations pertaining to the payment of prevailing wages on public works projects. These payroll records are also available to the public, but must be requested through DLSE or the entity awarding the contract.

Under existing law, certain projects overseen by private entities are subject to public works law if they meet specific criteria. However, private entities are not subject to the California Public Records Act. Because of this, joint labor-management committees, multiemployer Taft-Hartley Trust Funds, and non-profit organizations that seek to ensure compliance of public works laws have had record requests denied on public works projects administered by private entities.

This bill would require owners, developers and their agents that have received public funding to complete a public works project, as specified, to comply with specific record requests related to the project from joint labor-management committees, multiemployer Taft-Hartley trust funds, and nonprofits established to ensure compliance within the building and construction trades industry. It would also require contractors and subcontractors to provide the three entities access to certified payroll records on these projects, which they are already required to provide to DLSE and the awarding entity under existing law.

According to the author, “Transparency and accountability are essential pillars for every public works project financed by taxpayer dollars. By granting access to essential records for projects, such as certified payroll documents, contractor lists, project contracts, and inspection logs, AB 2439 ensures that the public can effectively oversee taxpayer funds, verify compliance with labor laws, and guarantee fair compensation for workers.”

The author added “AB 2439 does not have an impact - positive or negative - on the ability of underserved and marginalized communities.”

Committee Comments

This bill is substantially similar to AB 3186 (Petrie-Norris) of 2024. Committee staff would encourage the two authors to work together to determine a path forward.

Arguments in Support

None on file.

Arguments in Opposition

A coalition of organizations, including California Housing Consortium, Housing California, and the California Housing Partnership, are opposed and state, “We share the author’s interest in ensuring compliance with prevailing wage laws. When a private development is subject to prevailing wage requirements, the general contractor has a duty to ensure that both itself and all of the subcontractors comply with the applicable laws. These companies are responsible for submitting prevailing wage reports to the Department of Industrial Relations (DIR) to demonstrate compliance. The system is on-line, so no paper is produced, and these records can be requested by anyone. If there are problems with submittal of these records, we recommend that public entities retain some percentage of the contract amount until compliance is demonstrated. If there are problems with the public obtaining the records from DIR, we recommend focusing on improving DIR’s response capacity.

Since the records already submitted establish whether prevailing wages were paid or not, it is not clear that the additional documentation referenced in the bill is actually necessary to enforce compliance. According to our members and partners, the proposed list of documents in the bill is overly broad and the third-party compliance firms often employed rarely if ever have the breadth and scope of documents that are specified. As a result, the production of records becomes a burdensome and costly task that provides little to no benefit.”

Prior and Related Legislation

AB 3186 (Petrie-Norris) of 2024 is substantially similar to this bill and would require contractors and subcontractors on public works projects, as well as covered entities as specified, to make specified records available to DLSE, multi-employer Taft-Hartley trust funds, and to joint labor-management committees, as specified. This bill is set for hearing in this Committee.

AB 587 (Robert Rivas), Chapter 806, Statutes of 2023 required any copy of records requested by, and made available for inspection by or furnished to, a Taft-Hartley trust fund or joint labor-management committee to be on forms provided by the DLSE or contain the same information as the forms provided by DLSE. Additionally, AB 587 clarified that copies of electronic certified payroll records do not satisfy payroll records requests made by Taft-Hartley trust funds and joint labor-management committees.

SB 954 (Archuleta), Chapter 824, Statutes of 2022 required the Department of Industrial Relations (DIR) to develop and implement an online database of certified payroll records submitted to comply with Public Works requirements.

AB 1023 (Flora), Chapter 326, Statutes of 2021 allowed the Labor Commissioner to impose a penalty on a contractor or subcontractor on a public works project if they fail to furnish payroll records to the Labor Commissioner as required by public works standards.

AB 2744 (Committee on Labor and Employment), Chapter 297, Statutes of 2014 made conforming changes to reflect a merger of duties within the DLSE and more fully integrate enforcement of apprenticeship standards within the enforcement mechanisms already available to address other violations of the requirements for contractors and subcontractors on public works projects under existing law.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

Abundant Housing LA
Bay Area Council
California Coalition for Rural Housing
California Housing Consortium
California Housing Partnership Corporation
Circulate San Diego
Housing California
Housing Trust Silicon Valley
Midpen Housing
Non-profit Housing Association of Northern California 
San Diego Housing Federation
Southern California Association of Nonprofit Housing
Spur
The Two Hundred
Yimby Action

Other

California Building Industry Association

Analysis Prepared by: Erin Hickey / L. & E. /