BILL NUMBER: SB 1352 CHAPTERED
BILL TEXT
CHAPTER 402
FILED WITH SECRETARY OF STATE SEPTEMBER 27, 2008
APPROVED BY GOVERNOR SEPTEMBER 27, 2008
PASSED THE SENATE AUGUST 28, 2008
PASSED THE ASSEMBLY AUGUST 25, 2008
AMENDED IN ASSEMBLY AUGUST 22, 2008
AMENDED IN ASSEMBLY AUGUST 18, 2008
AMENDED IN ASSEMBLY JULY 1, 2008
AMENDED IN SENATE APRIL 15, 2008
AMENDED IN SENATE MARCH 24, 2008
INTRODUCED BY Senator Wyland
FEBRUARY 20, 2008
An act to amend Section 1742.1 of, and to amend and repeal Section
1742 of, the Labor Code, relating to public works.
LEGISLATIVE COUNSEL'S DIGEST
SB 1352, Wyland. Public works: prevailing wage rates: wage and
penalty assessments.
Existing law requires the Labor Commissioner to issue a civil wage
and penalty assessment to a contractor or subcontractor, or both, if
the Labor Commissioner determines, after investigation, that the
contractor or subcontractor, or both, violated the laws regulating
public works contracts, including the payment of prevailing wages.
Existing law permits the affected contractor or subcontractor to
obtain review of a civil wage and penalty assessment or a notice of
withholding, as defined, by transmitting a written request for a
hearing to the office of the Labor Commissioner within 60 days after
service of the assessment or notice and requires a hearing officer,
as specified, or, after January 1, 2009, an administrative law judge
appointed by the Director of Industrial Relations, to commence a
hearing within 90 days of receipt of the request. Existing law
provides that, after 60 days following the service of the assessment
or notice, the affected contractor, subcontractor, and surety on a
bond issued to secure the payment of wages, as provided, become
liable for liquidated damages in an amount equal to the amount of
unpaid wages, as specified. Existing law authorizes the hearing
officer, as specified, or, after January 1, 2009, an administrative
judge, to waive payment of the liquidated damages if the affected
contractor or subcontractor demonstrates, as provided, that he or she
had substantial grounds for believing the assessment or notice to be
in error, and also permits the affected contractor or subcontractor
to obtain review of the administrative decision by filing a petition
for a writ of mandate to the superior court within 45 days after
service of the decision.
This bill would continue to require a hearing officer, as
specified, to hold the hearings, as provided, and would not require
that an administrative law judge hold these hearings after January 1,
2009.
This bill would allow a contractor, subcontractor, or surety to
deposit the full amount of the assessment for the Department of
Industrial Relations to hold in escrow pending review, as specified,
and to be distributed, as specified. If so deposited, there would be
no liability for liquidated damages. This bill would authorize the
Director of Industrial Relations to waive payment of liquidated
damages, or a portion thereof, if the contractor or subcontractor
demonstrates that there were substantial grounds for its appeal, as
specified.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1742 of the Labor Code, as amended by Section 1
of Chapter 828 of the Statutes of 2006, is amended to read:
1742. (a) An affected contractor or subcontractor may obtain
review of a civil wage and penalty assessment under this chapter by
transmitting a written request to the office of the Labor
Commissioner that appears on the assessment within 60 days after
service of the assessment. If no hearing is requested within 60 days
after service of the assessment, the assessment shall become final.
(b) Upon receipt of a timely request, a hearing shall be commenced
within 90 days before the director, who shall appoint an impartial
hearing officer possessing the qualifications of an administrative
law judge pursuant to subdivision (b) of Section 11502 of the
Government Code. The appointed hearing officer shall be an employee
of the department, but shall not be an employee of the Division of
Labor Standards Enforcement. The contractor or subcontractor shall be
provided an opportunity to review evidence to be utilized by the
Labor Commissioner at the hearing within 20 days of the receipt of
the written request for a hearing. Any evidence obtained by the Labor
Commissioner subsequent to the 20-day cutoff shall be promptly
disclosed to the contractor or subcontractor.
The contractor or subcontractor shall have the burden of proving
that the basis for the civil wage and penalty assessment is
incorrect. The assessment shall be sufficiently detailed to provide
fair notice to the contractor or subcontractor of the issues at the
hearing.
Within 45 days of the conclusion of the hearing, the director
shall issue a written decision affirming, modifying, or dismissing
the assessment. The decision of the director shall consist of a
notice of findings, findings, and an order. This decision shall be
served on all parties and the awarding body pursuant to Section 1013
of the Code of Civil Procedure by first-class mail at the last known
address of the party on file with the Labor Commissioner. Within 15
days of the issuance of the decision, the director may reconsider or
modify the decision to correct an error, except that a clerical error
may be corrected at any time.
The director shall adopt regulations setting forth procedures for
hearings under this subdivision.
(c) An affected contractor or subcontractor may obtain review of
the decision of the director by filing a petition for a writ of
mandate to the appropriate superior court pursuant to Section 1094.5
of the Code of Civil Procedure within 45 days after service of the
decision. If no petition for writ of mandate is filed within 45 days
after service of the decision, the order shall become final. If it is
claimed in a petition for writ of mandate that the findings are not
supported by the evidence, abuse of discretion is established if the
court determines that the findings are not supported by substantial
evidence in the light of the whole record.
(d) A certified copy of a final order may be filed by the Labor
Commissioner in the office of the clerk of the superior court in any
county in which the affected contractor or subcontractor has property
or has or had a place of business. The clerk, immediately upon the
filing, shall enter judgment for the state against the person
assessed in the amount shown on the certified order.
(e) A judgment entered pursuant to this section shall bear the
same rate of interest and shall have the same effect as other
judgments and shall be given the same preference allowed by law on
other judgments rendered for claims for taxes. The clerk shall not
charge for the service performed by him or her pursuant to this
section.
(f) An awarding body that has withheld funds in response to a
civil wage and penalty assessment under this chapter shall, upon
receipt of a certified copy of a final order that is no longer
subject to judicial review, promptly transmit the withheld funds, up
to the amount of the certified order, to the Labor Commissioner.
(g) This section shall provide the exclusive method for review of
a civil wage and penalty assessment by the Labor Commissioner under
this chapter or the decision of an awarding body to withhold contract
payments pursuant to Section 1771.5.
SEC. 2. Section 1742 of the Labor Code, as amended by Section 2 of
Chapter 828 of the Statutes of 2006, is repealed.
SEC. 3. Section 1742.1 of the Labor Code is amended to read:
1742.1. (a) After 60 days following the service of a civil wage
and penalty assessment under Section 1741 or a notice of withholding
under subdivision (a) of Section 1771.6, the affected contractor,
subcontractor, and surety on a bond or bonds issued to secure the
payment of wages covered by the assessment or notice shall be liable
for liquidated damages in an amount equal to the wages, or portion
thereof, that still remain unpaid. If the assessment or notice
subsequently is overturned or modified after administrative or
judicial review, liquidated damages shall be payable only on the
wages found to be due and unpaid.
Additionally, if the contractor or subcontractor demonstrates to
the satisfaction of the director that he or she had substantial
grounds for appealing the assessment or notice with respect to a
portion of the unpaid wages covered by the assessment or notice, the
director may exercise his or her discretion to waive payment of the
liquidated damages with respect to that portion of the unpaid wages.
Any liquidated damages shall be distributed to the employee along
with the unpaid wages. Section 203.5 shall not apply to claims for
prevailing wages under this chapter.
(b) Notwithstanding subdivision (a), there shall be no liability
for liquidated damages if the full amount of the assessment or
notice, including penalties, has been deposited with the Department
of Industrial Relations, within 60 days following service of the
assessment or notice, for the department to hold in escrow pending
administrative and judicial review. The department shall release such
funds, plus any interest earned, at the conclusion of all
administrative and judicial review to the persons and entities who
are found to be entitled to such funds.
(c) The Labor Commissioner shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a civil wage and penalty assessment under Section 1741,
afford the contractor or subcontractor the opportunity to meet with
the Labor Commissioner or his or her designee to attempt to settle a
dispute regarding the assessment without the need for formal
proceedings. The awarding body shall, upon receipt of a request from
the affected contractor or subcontractor within 30 days following the
service of a notice of withholding under subdivision (a) of Section
1771.6, afford the contractor or subcontractor the opportunity to
meet with the designee of the awarding body to attempt to settle a
dispute regarding the notice without the need for formal proceedings.
The settlement meeting may be held in person or by telephone and
shall take place before the expiration of the 60-day period for
seeking administrative review. No evidence of anything said or any
admission made for the purpose of, in the course of, or pursuant to,
the settlement meeting is admissible or subject to discovery in any
administrative or civil proceeding. No writing prepared for the
purpose of, in the course of, or pursuant to, the settlement meeting,
other than a final settlement agreement, is admissible or subject to
discovery in any administrative or civil proceeding. The assessment
or notice shall advise the contractor or subcontractor of the
opportunity to request a settlement meeting.
(d) This section shall become operative on January 1, 2007.