Dem supermajority likely to pass pro-union SB 776

by CalWatchdog Staff | June 13, 2013 10:27 am

June 13, 2013

By Katy Grimes

[1]

SACRAMENTO — The Democratic supermajority promised to practice restraint [2]when it assumed control of the state Capitol after last year’s November election, effectively marginalizing Republicans. But at a June 5 SEIU rally here I overheard one union member explain to another why the unions instead are pushing harder than ever for more power. “Because we can,” he said.

That’s the union attitude behind SB 776, by Sen. Ellen Corbett, D-San Leandro. It was written and sponsored by the State Building and Construction Trades Council of California. SB 776 is an effort to eliminate the monitoring and enforcement of prevailing wage laws through independent compliance audits and enforcement of building contractors.

Fast tracked since it was introduced February 22, SB 776 was heard in the Senate Labor and Industrial Relations Committee April 24 and passed out of the Senate on May 9.

The bill was heard Wednesday in the Assembly Labor and Employment Committee[3]. Debate should have been heavy. But only one person testified in opposition to the bill on behalf of the Associated Building and Contractors, a national trade association founded on the merit shop philosophy. The ABC believes contractors should be invited to bid work based on their demonstrated ability to perform and deliver.

Corbett and a representative of the SBCTC presented SB 776. Corbet said her bill would “close a loophole in the prevailing wage act to pay for compliance audits, while calling it a fringe benefit.”

Jeremy Smith with the SBCTC said labor needs to be included in the compliance process in order to have a say in workers’ wages.

“Contractors on public works projects are obligated to pay their employees the prevailing wage for the craft and locality in which the work is performed,” the bill analysis[4] explains. “A portion of that obligation can be satisfied by paying fringe benefits, which include payments to ‘monitor and enforce’ worker protection laws. In the case of union contractors, those payments are made to joint labor management compliance committees in which workers have a voice, as defined in the federal Joint Labor Management Cooperation Act of 1978[5].”

Union message

“The California Senate today approved SBCTC-sponsored legislation to stop anti-union contractors and groups like Associated Builders and Contractors (ABC) to take earnings from workers’ paychecks to fund their sham labor compliance committees,” the SBCTC celebrated on its website[6]. “The truth is that the anti-union crowd doesn’t want to lose a loophole that enables them to cheat workers out of the legally required prevailing wage to which they are entitled.”

Actually, the “labor compliance committees” are not “shams.” They audit contractors and return thousands of dollars to employees.

According to the non-union California Construction Compliance Group[7], the audits usually find labor violations, and particularly those involving employee prevailing-wage requirements. It’s ironic that the prevailing wage is supported entirely by unions, but it’s usually union contractors which violate this rule and do not pay prevailing wages to construction workers.

A recent CCCG labor compliance audit of the Los Angeles Unified School District uncovered more than $91,000 in unpaid wages owed to construction workers on the Valley Region High School Number 5 project. The beneficiaries of the settlement included more than 70 workers of the now defunct Masonry Group California Inc, a company that is currently in Chapter 7 Bankruptcy.

Two recent audits of contractors — one union, one non-union — found $200,000 in unpaid wages, and returned money to 106 workers.

Once an audit is completed, employees receive substantial amounts of back wages they were cheated out of through fraudulent labor practices, or just sheer incompetence by the contractor employers.

If the wages were underpaid due to fraud, the State of California Labor Commissioner [8]assesses fines and penalties on the employer commensurate with the level of fraud or illegal activity. But if the underpayment to employees was oversight, chances are only back wages will be required as payment.

The CCCG hoped that, with the large amounts of money recovered for their members, the Legislature would come around to its point of view. But Senate Bill 776[9] was clearly written to get non-union contractors out of the audit business.

Bill analysis and background

According to the SBCTC website[6]:

“SBCTC Legislative Director Cesar Diaz states that SB 776[10] closes this unfair loophole by clarifying that contractor payments for monitoring and enforcing laws related to public works cannot count as a credit toward a contractor’s obligation to pay prevailing wages, if those payments are not made to a joint program or committee established by the federal Labor Management Cooperation Act of 1978…. This will guarantee that workers have a say in how their own money is used on their behalf, and will protect them from ABC-style phony labor compliance committees that actually work against all workers’ best interests.”

SB 776 could not get the votes needed to pass out of the Assembly Labor and Employment Committee on the first try, but was held on call until more members of the Assembly could place a vote. With Democrats in the majority, and increasing union pressure, expect the bill to be passed.

Source URL: https://calwatchdog.com/2013/06/13/dem-supermajority-likely-to-pass-pro-union-sb-776/

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