BILL ANALYSIS
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Date of Hearing: April 17, 2008
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 2364 (Walters) - As Amended: April 2, 2008
SUBJECT : Public works: exemption: volunteers.
SUMMARY : Eliminates the sunset date on a public works
exemption for specified "volunteers" and other related
individuals.
EXISTING LAW :
1) Requires the prevailing wage rate to be paid to all workers
on public works projects over $1,000.
2) Defines "public work" to include, among other things,
construction, alteration, demolition, installation or repair
work done under contract and paid for in whole or in part out
of public funds.
3) Provides that the provisions of existing law dealing with the
payment of prevailing wages on public works projects do not
apply to work performed by a volunteer or volunteer
coordinator, as defined.
4) Defines a "volunteer" as an individual who performs work for
civic, charitable, or humanitarian reasons for a public
agency or 501 (c)(3) tax-exempt organization without promise,
expectation, or receipt of any compensation for work
performed.
5) Defines a "volunteer coordinator" as an individual paid by a
corporation or 501(c)(3) tax-exempt organization to oversee
or supervise volunteers.
6) Clarifies that an individual may be considered a "volunteer
coordinator" even if the individual performs some
non-supervisory work on a project alongside the volunteers,
so long as the individual's primary responsibility is to
supervise.
7) Specifies that an individual shall be considered a volunteer
only when his or her services are offered freely and without
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pressure and coercion, direct or implied, from an employer.
8) Authorizes a volunteer to receive reasonable meals, lodging,
transportation, and incidental expenses or nominal
non-monetary awards if those benefits and payments are not a
substitute form of compensation.
9) Excludes from the definition of volunteer an individual if
that person is otherwise employed for compensation at any
time (a) in the construction, alteration, demolition,
installation, repair, or maintenance work on the same
project, or (2) by a contractor, other than a 501(c)(3)
tax-exempt organization, that is receiving payment to perform
construction, alteration, demolition, installation, repair or
maintenance work on the same project.
10)Provides that the provisions of existing law dealing with the
payment of prevailing wages on public works projects do not
apply to work performed by members of the California
Conservation Corps or a certified Community Conservation
Corps.
11)Provides a January 1, 2009 sunset date to these provisions.
FISCAL EFFECT : Unknown
COMMENTS : This bill revisits an issue that arose in 2004
concerning the use of volunteer labor on certain public works
projects. Much of the attention that arose at that time was a
result of an enforcement action taken by the Department of
Industrial Relations (DIR) in July 2003 in relation to a stream
restoration project in Shasta County.
Brief Background on California Prevailing Wage Law
A feature of California law since the 1930s, existing law
generally requires that prevailing wages be paid to all workers
employed on public works projects. (Labor Code Section 1771).
Current law defines a "public work" as construction, alteration,
demolition, installation, or repair work done under contract and
paid for in whole or in part out of public funds. (Labor Code
Section 1720).
Advocates of prevailing wage laws generally argue that such
protections serve two important functions. First, such laws
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ensure that skilled workers employed in public works projects
are paid at least the wages and benefits that "prevail" in their
local communities. Second, proponents of prevailing wages argue
that such laws make sure that unscrupulous contractors do not
import unskilled or low skilled workers from other parts of the
country who would undercut the local workforce by working for
lower pay.
SB 975 (Alarcon), Chapter 1048, Statutes of 2002, among other
things, established a definition of "paid for in whole or in
part out of public funds" that conformed to several precedential
coverage decisions made by DIR. These coverage decisions
defined payment by land, reimbursement plans, installation,
grants, waiver of fees, and other types of public subsidy as
"public funds" for purposes of prevailing wage law.
The Labor Code also sets forth a statutory methodology for
determining the prevailing wage rate. (Labor Code Section
1773.9). This methodology defines the prevailing rate as the
single rate being paid to a majority of workers engaged in a
particular craft, classification, or type of work within the
locality and in the nearest labor market area. Where no single
rate is being paid to a majority of workers the prevailing rate
is the single rate being paid to the greatest number of workers
(also referred to as the "modal rate").
The Prior Labor Code Public Works "Volunteer" Exemption
Prior to 2004, Section 1720.4 of the Labor Code, originally
enacted in 1989, provided that "public works" shall not include
any otherwise covered work that meets all of the following
conditions:
(a)The work is performed entirely by volunteer labor.
(a)The work involves facilities or structures which are, or
will be, used exclusively by, or primarily for or on
behalf of, private nonprofit community organizations
including, but not limited to, charitable, youth,
service, veterans, and sports groups or associations.
(b)The work will not have an adverse impact on employment.
(c)The work is approved by the Director of Industrial
Relations as meeting the requirements of this section.
The previous section 1720.4 also required the Director of DIR to
request information on whether or not the work will have an
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adverse impact on employment from the appropriate local or state
organization of duly authorized employee representatives of
workers employed on public works.
The July 2003 DIR Enforcement Action
Significant media attention and controversy over this issue
following a July 2003 enforcement action by DIR stemming from a
stream restoration project in Shasta County.
In fiscal year 20010-01, the Department of Water Resources
provided grant funding to the Sacramento Watersheds Action Group
for a stream restoration project on Sulphur Creek in the City of
Redding. According to media reports, students from nearby
Shasta College were used for various activities including
planting seeds, clearing brush, repairing culverts, installing
rock beds to prevent erosion, and trash removal. The students
reportedly earned course credit for classes in watershed
restoration.
Responding to a complaint from a local labor organization, DIR
investigated and determined that, based on the submitted job
descriptions of the work performed by students and volunteers,
prevailing wages were required for the following work: willow
staking, spreading seeds and mulch, planting shrubs, operating
heavy equipment, site cleanup, off-hauling garbage, and planting
vegetation. The subsequent DIR enforcement action assessed back
wages and civil penalties.
In September 2003, the Department of Water Resources (DWR)
issued a memorandum that stated, "Due to the serious
implications to our programs that would arise from being unable
to support volunteerism, DWR is taking a conservative approach
until these issues can be clarified?We will not enter into any
new contracts possibly affected by these issues until we have a
clearer picture of the obligations of DWR and the grantees under
the Labor Code."
The 2004 Legislative Amendments to Labor Code Section 1720.4
Following the July 2003 enforcement action, there was an outcry
among many in the environmental community that the prior Labor
Code Section 1720.4, as interpreted by DIR, effectively
prohibited the mixed use of volunteer and paid labor on public
works projects.
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After lengthy negotiations between the environmental community
and representatives of organized labor, the Legislature enacted
AB 2690 (Hancock), Chapter #330, Statutes of 2004. AB 2690
amended Labor Code Section 1720.4 into its current form.
In order to address concerns that there may be abuses of any
"volunteer" exemption to California's prevailing wage laws, AB
2690 contained a January 1, 2009 sunset date.
ARGUMENTS IN SUPPORT :
Supporters argue that volunteer efforts are critical to a number
of projects, providing needed assistance and relief from the
burden of the costs associated with cleanup and beautification
efforts. They argue that California counts on hundreds of
thousands of volunteers to help preserve its environmental
legacy. They contend that this legislation would allow the
continued involvement of volunteers supporting local efforts,
saving state and local governments valuable resources.
ARGUMENTS IN OPPOSITION :
Opponents argue that, in the past, labor negotiated the previous
language to create the temporary exemption for volunteer
participation on public works projects. They argue that the
idea behind establishing a sunset of the volunteer exemption was
to provide all parties with the opportunity to reevaluate the
exemption as it is being applied by public agencies and
non-profit organizations.
The California Labor Federation, AFL-CIO states that a rush to
judgment in dealing with this sensitive issue is certainly
premature. They express support for the existing sunset to
provide for a complete review of potential abuse by unscrupulous
contractors, businesses or organizations that may seek to
benefit from the prevailing wage exemption.
RELATED LEGISLATION :
SB 1345 (Ashburn) is identical to this bill. During hearing
before the Senate Committee on Labor and Industrial Relations,
some representatives of organized labor expressed concern about
liability issues and health and safety issues, including
workers' compensation, surrounding the use of volunteers on
public works projects. Some Members of the Committee expressed
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a preference for an extension, rather than the elimination, of
the sunset date. However, the author was not willing to take
such an amendment, and the bill failed passage.
AB 2537 (Furutani) would extend the sunset date on the volunteer
exemption until 2012. AB 2537 is pending before this Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
American River Parkway Foundation
California State Association of Counties
City of Roseville
Heal the Bay
Keep California Beautiful, Inc.
Sacramento County Board of Supervisors
Volunteer Centers of California
Opposition
American Federation of State, County and Municipal Employees
California Labor Federation, AFL-CIO
California Teamsters Public Affairs Council
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091