Winter 2013

BEWARE OF NEW EXTENDED TIME LIMITATIONS ON PREVAILING WAGE MATTERS

For those who perform public works, or who perform private works that are subject to the prevailing wage laws, the recently enacted Assembly Bill 1336 is going to drastically change the way you do business. This statute amended provisions of the Labor Code pertaining to prevailing wage claims by the Labor Commissioner or Joint Labor-Management Committees that are authorized to bring an action, and also made some changes to the laws reflecting the privacy rights of employees when prevailing wage records are made public.

The changes in the Labor Code sections pertaining to the timing of bringing a Civil Wage and Penalty Assessment ("CWPA") will become effective on January 1, 2014. The statute does not specifically state it is retroactive, but we must assume that the Labor Commissioner may argue that it extends the statute of limitations even on ongoing projects. We will probably have to fight that battle at some point for some of our clients.

The current statute of limitations to bring a CWPA has been for a substantial period of time, six months from the recording of a Notice of Completion, but if retention is still being held, one could be liable under a CWPA up to the amount of retention being held after the six month expiration until one year following completion. Typically, after a Notice of Completion is actually issued (which on a public works project is often times long after actual completion has occurred), retention is paid in less than six months so the extension is rarely applicable.

Under the new law, the CWPA must be served not later than 18 months after the recording of a valid Notice of Completion in the office of the County Recorder of the County in which the public work was performed, or 18 months after the acceptance of the public work, whichever occurs last. Thus, contractors will have the worry of any potential wage violations of their subcontractors hanging over their heads for 18 months rather than six or 12 months. This change is monumental. Many contractors who have concerns over compliance by their subcontractors will hold portions of the retention until after the time to bring an action by the Labor Commissioner has run, and now that time is greatly extended.

Another change in the law made in the statutes is the obliteration of information on prevailing wage documents subject to public disclosure to prevent disclosure of an individual's name, address and social security number; an exception applies where the records are being made available for inspection to a multi-employer trust fund under Federal law, then the information should be left intact except the social security number would be obliterated up to the last four digits of the social security number to allow for the proper allocation of the employee benefits and pensions to the workers. There are other exceptions to the law and if you are subject to a Request for Information, you should seek the aid and advice of counsel. Typically, a private contractor is not required to turn over its payroll records directly for inspection to any third party other than the owner for whom they are contracting or the Division of Labor Standards Enforcement. However, those entities may have obligations to turn over the documents.

When dealing with prevailing wage projects, contractors have to be that much more diligent in policing the proper payment of certified payroll given this change in the law.

NEW LAWS for 2014

Chaptered bills are bills that have passed through the Legislature as well as the Governor and are now laws. Following are some new laws of interest to the industry:

AB 10 (Alejo) Minimum wage: annual adjustment

As stated earlier, this new law makes the minimum wage in the State of California nine dollars ($9.00) per hour as of July 1, 2014. It further goes on to state that effective January 1, 2016, the new minimum wage will be ten dollars ($10.00) per hour.

AB 44 (Buchanan) Subletting and Subcontracting Fair Practices Act: bidding practices

This new law adds to the requirements of information needed by the Subletting and Subcontracting Fair Practices Act by making it mandatory that the contractor include the contractor license number of each subcontractor, and to also be provided on any bid or offer effective July 1, 2014.

AB 127 (Skinner) Fire safety: fire retardants: building insulation

This new law introduces new standards regarding insulation flammability standards which may provide manufacturers with flexibility with respect to flammability standards with or without the use of chemical flame retardants but remain consistent with building fire safety.

AB 164 (Wieckowski) Infrastructure financing

This new law requires a lease agreement between a governmental agency undertaking an infrastructure project and a private entity to include performance bonds as security to ensure the completion of the construction of the facility and payment bonds to secure the payment of claims of laborers, mechanic's, and material suppliers employed on the work under contract.

AB 195 (Hall) Counties: construction projects: design-build

This new law extends provisions that authorize counties to utilize the alternative design-build procedures for bidding on specified types of construction projects in excess of $2.5 million to July 1, 2016.

AB 221 (Quirk-Silva) Recycled concrete

This new law redefines recycled concrete to also include the definition as per the California Green Building Standards Code.

AB 341 (Dickinson) Green building standards

This new law requires that the California Building Standards Commission and state agencies that propose green building standards obtain input by other state agencies that have expertise in green building subject areas. It also lists a specific process to submit those suggested changes among other items.

AB 401 (Daly) Transportation: design-build: highways

This new law authorizes the Department of Transportation to utilize design-build procurement for up to ten (10) projects on the state highway system, as well as other items.

AB 442 (Nazarian) Employee wages

This new law allows the Labor Commissioner to collect liquidated damages from an employer who pays an employee less than minimum wage.

AB 433 (Gordon) Contractors: fire protection systems: fire safety: State Fire Marshal

This new law adds that a plumbing contractor will now be able to install residential fire protection for a one or two-family dwelling in addition to a fire protection contractor until January 1, 2017. Additionally, the State Fire Marshall will now be able to propose, adopt and administer regulations that are deemed necessary in order to ensure fire safety in buildings and structures, as well as create and collect reasonable fees to implement these provisions.

AB 811 (Lowenthal) Excavations: regional notification center system: contractor certification

This new law requires statewide information about facility events to be compiled by operators and excavators and made available in an annual report. This report is to be posted on the Internet website of the regional notification centers.

AB 1057 (Medina) Professions and vocations: licenses: military service

This new law will require as of January 1, 2015, that all board's inquire on all applications for licensure if the individual applying for the license is serving in or served in the military.

AB 1092 (Levine) Building standards: electric vehicle charging infrastructure

This new law requires that the California Building Standards Commission adopt, approve, codify and publish mandatory building standards for installation of future electric vehicle charging for parking spaces in multifamily dwellings and other nonresidential development. This is to be in the next triennial edition of the California Building Standards Code so we should see some new construction projects in 2017 because of this law.

AB 1236 (Hagman) Contractors: limited liability companies

This new law adds an eligible surplus line insurer to the type of insurer that LLC's can use in order to meet their insurance requirements for licensure with the CSLB.

SB 7 (Steinberg) Public works: charter cities

This new law prohibits a charter city from utilizing state funding or financial assistance for a construction project if a charter provision or ordinance authorizes a contractor to not comply with the states prevailing wage provisions on any public works contract.

SB 54 (Hancock) Hazardous materials management: stationery sources: skilled and trained workforce

This new law will extend prevailing wage requirements to private refinery construction, and also give union tradesmen first rights on refinery jobs before the members of the refinery workers union.

SB 152 (Roth) Licensed professionals: engineers: geologists: geophysicists

This new law deletes provisions that allowed temporary authorization to practice as an engineer, geologist or geophysicist and require geologists and geophysicists to use a written contract with specified information in the contract.

SB 261 (Monning) Contractors: fraudulent use of license

This new law provides that any licensed or unlicensed contractor who commits any specified activities with respect to a contractor license is subject to the administrative remedies authorized by the Contractors' License Law.

SB 262 (Monning) Contractors

This new law relates to the Contractors' License Law. It requires a qualifying individual to meet specified requirements with respect to his or her employer's or principal's construction operations. It further provides that this person shall not act in the capacity of the qualifying person for an additional individual or firm except under certain circumstances, the qualifying person must submit detailed information on the qualifiers duties and responsibilities for supervision and control of the construction operations, and provides that violations constitute a cause for disciplinary action, a fine and imprisonment.

SB 308 (Lieu) Professions and vocations

This new law extends the statutes that authorize certified interior designers to obtain a stamp from an interior designer organization that identifies the designer and certifies that they have met certain qualifications and requires that stamp to be used on all drawings and documents submitted to any government agency to January 1, 2018, instead of 2014. It also requires that interior designers use a written contract with specific information included.

SB 328 (Knight) Counties: public works contracts

This new law authorizes, until January 1, 2018, counties to use a construction manager at-risk construction contract for projects in excess of $1,000,000 and be awarded to the lowest responsible bidder.

SB 377 (Lieu) Public works: project determinations: wage and penalty assessments

This new law gives the Director of Industrial Relations a quasi-legislative authority in determining coverage of projects or types of work under prevailing wage requirements and provides that final determination on any appeal is subject to judicial review.

SB 390 (Wright) Failure to Remit to Employee Wage Withholdings

This new law provides that it is illegal for an employer to willfully, or with the intent to defraud, fail to remit withholdings from an employee's wages pursuant to local, state or federal law to the proper agency, and also provides that if an employer fails to remit $500 or more in wage withholdings, the employer's violation is a misdemeanor and shall be punishable by imprisonment in a county jail for a period of not more than one year, by a fine of not more than $1,000, or both.

SB 435 (Padilla) Compensation: meal and rest or recovery periods

This new law clarifies existing law regarding the meal or rest periods and adds "recovery period" a cool down period afforded an employee to prevent heat illness, to the statutes and discusses compensation for the employee if those breaks are taken away from the employee.

SB 462 (Monning) Employment: compensation

This new law changes the statute from awarding attorney's fees and costs to the prevailing party if there is an action brought for nonpayment of wages, fringe benefits, health and welfare or pension fund contributions. Now, attorney's fees and costs will only be awarded to the employer as the prevailing party if the employee brought the action in bad faith.

SB 551 (Gaines) Renewal and execution of judgments: judgment debtor

This new law amends the rules governing renewals of monetary judgments. With the prior rules, the renewal for judgment had to include all judgment debtors, even if they no longer had liability. Now, it is required that the judgment creditor omit the name of the judgment debtor on the renewal if their liability ceased.

SB 652 (DeSaulnier) Real property disclosures: construction defect litigation

This new law revises the transfer disclosure form that is mandatory during the transfer of residential property to also have the transferor disclose to a potential transferee specified claims for damages by the seller.

SB 666 (Steinberg) Employment: compensation

This new law provides for a suspension or revocation of an employer's business license for retaliation against employees and others on the basis of citizenship and immigration status, and establishes a civil penalty up to $10,000 per violation.

SB 679 (Berryhill) Licensees: reporting requirements

This new law makes it a requirement for licensees of the Board for Professional Engineers and Land Surveyors to report any civil action settlement or administrative action resulting in a settlement against the licensee in any action alleging fraud, deceit, misrepresentation, breach or violation of contract, negligence, incompetence, or recklessness by the licensee in the practice of professional engineering or land surveying if the amount of the settlement is more than $50,000 to the Board. In addition, the amount of an award from a judgment or binding arbitration for reporting the same items is now $25,000 rather than the prior $50,000.

SB 770 (Jackson) Paid Family Leave

This new law expands the type of family members for whom an employee may seek wage replacement benefits under the Paid Family Leave and goes into effect July 1, 2014.

SB 776 (Corbett) Public works: prevailing wage rates: employer payment credits

This new law establishes additional restrictions on credit granted against the obligation to pay prevailing wages for employer payments made to monitor and enforce public works laws.

SB 822 (Committee on Business, Professions and Economic Development) Professions and vocations

This new law relates to delinquency fees regarding the renewal application under the Contractors' License Law and creates a retired registration category and fee for geologists or geophysicists. It also allows a fictitious business name statement to be signed by either party to a marriage as well as many other things outside of the construction industry.

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