Govt Affairs Report by Richard Markuson, CAPHCC Lobbyist

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Senator Bob Hertzberg (D-Van Nuys) has received over one half million dollars from construction unions. His quid-pro-quo is Senate Bill 954.

SB 776 of 2013 (Corbett) altered the long-standing policy that prevailing wage law (specifically Labor Code §1773.1) treated signatory and non-signatory contractors equitably. As you all know, in general, a contractor must pay a “prevailing wage package” that is set by the state. Against this “total wage” the contractor is allowed credits for a range of cash wages and benefit payments.

Until SB 776, all contractors could take a credit for Industry advancement (sub-paragraph 8) and for similar purposes authorized by §1773.1 (sub-paragraph 9). SB 776 – which targeted a non-signatory contractor group – changed this by prohibiting “payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (Section 175a of Title 29 of the United States Code).” Only union sponsored programs qualify.

In the intervening period the target of SB 776 changed its focus and continued to accept these payments for other permissible purposes. Thus SB 954 which expands the disparate treatment of signatory and non-signatory contractors by limiting payments under §1773.1(8) to those required by collective bargaining agreements (CBA).

The merit-shop groups have a four-phase effort:

  • Persuade the author the bill is inequitable in its disparate treatment of contractors, failing that,
  • Persuade the policy committees to reject SB 954, failing that,
  • Persuade the full legislature to reject SB 954, failing that,
  • Persuade the administration the bill should be vetoed.

The worry is that if SB 954 passes – the sponsors of SB 954 State Building and Construction Trades Council will attack other elements of prevailing wages – such as benefits and pension credits – making them only available pursuant to a CBA!

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