Legislative Update by Richard Markuson, Lobbyist, CAPHCC


Update on State Public Works License

We previously reported that DIR would “incentivize” early signups for the new public works license by giving two years for the price of one. That policy has been abandoned.

According to Eric Rood at DLSE, “There are right now two critical trigger dates for this fiscal year.  All contractors must be registered with DIR to bid on public works project on or after March 1, 2015, and on April 1, 2015, contractors must be registered in order to work on a public works projects.  As the statute reads today, the fee covers a fiscal year period of July through June.  Right now, there is no benefit waiting on registering as all registrations expire 6/30/15.  My concern is that when the mandates kick in March, that there may be a flood of contractors trying to register all at one time, which could cause technical issues if DIR is reviewing 50,000 registrations all at once.  If I am a contractor who is going to work in the public works arena, I will be able to have peace of mind to be able to bid on projects when March arrives.” So, if you want to be in compliance, and who doesn’t, don’t wait until the last minute to sign up!

State Supreme Court: CEQA Doesn’t Apply to Local Initiative Adopted by Local Government (from CalChamber)

The California Supreme Court has held unanimously that the California Environmental Quality Act (CEQA) does not apply to a local voter initiative when the local government body directly adopts the initiative rather than placing it on the ballot for a special election. The August 7 decision is a significant victory for the local land use initiative process and will have a considerable impact on development projects throughout the state. Kevin Dayton wrote about this litigation here.

The case, Tuolumne Jobs & Small Business Alliance v. Superior Court (Wal-Mart), stemmed from a local initiative to adopt a specific plan for a Wal-Mart expansion project in Sonora, California. The initiative proponents gathered signatures from more than 20 percent of the city’s registered voters and subsequently presented the initiative to the city council. After reviewing the initiative and countervailing arguments, the city council adopted the initiative without conducting CEQA review.

The Tuolumne Jobs & Small Business Alliance (TJSBA) filed suit, asserting that the city council violated CEQA by adopting the initiative without conducting CEQA review.

The Supreme Court rejected TJSBA’s claim, however, noting that the Election Code precludes application of CEQA in part because the tight timeframes mandated by the Election Code cannot be reconciled with the typical lengthy environmental review process. Moreover, the court noted that when the Legislature enacted CEQA in 1970, the statutory procedures for enacting voter initiatives were firmly in place, having been codified 60 years earlier. According to the court, “[I]f the Legislature had intended to require CEQA review before direct adoption . . . it could have easily said so. It did not.”


The Legislature is back from their summer recess and into the home stretch. At the front of the line are two proposed bond measures – one for water and one for schools. And while the Legislature convened in January of this year – they still needed two more days to reach agreement on the water bond – passing special legislation to delay sending the ballot pamphlets out so they could continue to meet with the Governor. Few think the odds for a State school bond are good however. Brown has signaled he doesn’t want a school bond on the same ballot as his reelection drive.

Labor Law Update

Another New Executive Order: Requires Federal contractors to report labor violations

President Obama’s latest Executive Order is entitled “Fair Pay and Safe Workplaces,” but its requirements on contractors go well beyond compensation and safety. Implementation of these new requirements is not expected to begin until 2016.

Disclosure of Labor and Employment Violations

Section 2 of the new EO, entitled “Compliance with Labor Laws,” will require companies that bid on federal contracts worth at least $500,000 to report to violations of labor and employment laws over the previous three years. This includes a variety of Federal laws, as well as “equivalent state laws” (as defined by DOL guidance). Reporting will be through a General Services Administration website to be developed later. Contracting agencies will be required to consider this information when awarding federal contracts and will focus on only the “most egregious violations.” According to a White House Fact Sheet, this portion of the EO will allow the government to “crack down on federal contractors who break the law” and ensure that the “worst actors” are not awarded federal contracts.

Reporting Information About Employee Paychecks

Section 5 of the new EO is entitled “Paycheck Transparency.” This section will require companies that are awarded federal contracts of at least $500,000 to furnish employees who perform work under the contract with specific information about their paychecks for each pay period. This information includes: the individual’s hours worked (unless the employee is exempt from overtime under FLSA), overtime hours, pay and any additions made to or deductions from pay. The impact of this requirement may be less significant as most companies already provide this information pursuant to state or local requirements or their existing payroll policies and procedures.

Prohibition Against Arbitration Clauses

Finally, Section 6 of the EO is entitled “Complaint and Dispute Transparency.” This section will prohibit companies that are awarded federal contracts worth at least $1 million from requiring employees or independent contractors to enter into pre-dispute arbitration of Title VII claims or tort claims arising out of or related to sexual assault or harassment. Exceptions will be granted with respect to employees covered by a collective bargaining agreement and employees or independent contractors who have entered into valid arbitration agreements that pre-date the company’s bid on the applicable federal contract.

NLRB Asserts Right to Protect Pot (workers)

After admitting that pot dispensaries are operating in violation of the federal Controlled Substances Act, the NLRB concluded that marijuana processors working for companies that grow and cultivate the herb are employees under the National Labor Relations Act instead of agricultural laborers who fall outside the Act’s protection. (Wouldn’t they be criminal co-conspirators?)

Marijuana remains illegal under federal law despite states like California, Washington, and Colorado legalizing the growth, cultivation, possession, and/or consumption of the drug. That didn’t stop the NLRB’s Division of Advice, which provides guidance to the Board’s Regional Offices, from concluding the Wellness Connection of Maine, which processes medical marijuana products at an indoor facility and operates four retail dispensaries in the state that Wellness is a statutory employer and not an agricultural entity. The NLRA excludes “agricultural laborer” from its definition of a statutory employee. According to the NLRB’s Division of Advice, “the processing operation that transforms the cannabis plants from their raw and natural state is more akin to manufacturing than agriculture.