Bills Move on, While Others Are Set
As Budget Deadline Nears
Friday, June 12, 2015
Also In This Update
- Warning! Paid Sick Leave Provisions Start July 1, 2015
- What Happened To Bills Set This Week?
- Bills Set For Next Week
- Fact or Fiction: “Independent Contractor” Has the Same Meaning for All Government Agencies?
Budget Deadline Draws Near
The next legislative deadline is fast approaching. Next Monday, June 15th is the deadline for the Legislature to send their approved budget for the 2015-2016 year to the governor who, in-turn, must have the budget signed by June 30th in order for the 2015-2016 fiscal year to begin.
There is little doubt that lawmakers will pass a budget bill by Monday’s constitutional deadline but, unlike last year, it won’t be something that will win the support of Gov. Jerry Brown. As a result talks between Democratic legislative leaders and Brown will continue after Monday’s scheduled vote, with a final deal emerging by the July 1 start of the 2015-16 fiscal year.
In particular, the Governor’s Office objects to the Legislature’s acceptance of higher revenue estimates by the Legislative Analyst’s Office. The governor’s revised budget assumes $115 billion in general fund revenue through June 2016 compared to $117.3 billion in the Legislature’s plan.
The Legislature’s plan includes an estimated $749 million in general fund spending above the governor’s revised budget proposal. More than a third of that reflects $261 million more in general fund money for child care and preschool slots, along with $147 million for additional state preschool already covered by Proposition 98, the state’s constitutional school-funding guarantee.
In the end, the governor will win out. He may relent a bit, but not by much. He has repeatedly warned that more spending would put the state back into the red if and when revenue falls. Earlier this week he was quoted as saying that another recession will happen. The only unknown is when it. Furthermore, despite the significant increase in tax revenues to the state, the recovery has been uneven. Consequently, he will most likely err on the side of caution, which is the correct approach to take. Stay tuned.
Warning! Paid Sick Leave Provisions Start July 1, 2015
As pretty much every employer in California knows, the effective date of the Healthy Workplaces, Healthy Families Act of 2014, which mandates paid sick leave (PSL) for California employees, is only a couple of weeks away.
Employers must begin providing the paid sick leave benefit starting July 1, 2015. Other requirements, such as posting and notice obligations, took effect on January 1, 2015.
Key provisions of the law can be found on the Department of Industrial Relations’ website at:
What Happened To Bills Set This Week?
I reported on several bills last week that were set to be heard this week. Following is a status report on their outcome.
AB 251 (Levine) – Senate Labor and Industrial Relations - Public works: public subsidies – Passed 4-1 Now on to Senate Appropriations
This measure pertains to when a public works project is subject to prevailing wage requirements. It would provide that a public subsidy is de minimis if it is both less than $75,000 and 1%of the total project cost. The provisions do not apply to a project that was advertised for bid,
or a contract that was awarded, before January 1, 2016.
AB 552 (O’Donnell) - Senate Governmental Organization- Passed 13-0 Now on to Senate Judiciary
Current law prescribes requirements for contracts between private parties and public entities, as defined. This bill would provide that a public works contract entered into on or after January 1, 2016, that contains a clause requiring a contractor to be responsible for consequential damages is not enforceable unless the consequential damages have been liquidated to a set amount and identified in the public works contract.
AB 566 (O’Donnell) – Senate Education – Skilled and Trained Workforce –Passed 6-2 with 1 abstention – Now on to Senate Appropriations
Would apply to schools utilizing lease/lease-back arrangements for projects from $1 million and over. Prohibits a school district governing board from entering into a lease-leaseback or lease-to-own contract with any entity unless the entity provides to the governing board of the school district an enforceable commitment that the entity and its subcontractors at every tier will use a skilled and trained workforce to perform all work on the project or contract that falls within an apprenticeable occupation in the building and construction trades.
AB 970 (Nazarian ) Senate Labor and Industrial Relations Labor Commissioner: enforcement of employee claims- Passed 3-1 – Now on to Senate Appropriations
Would authorize the Labor Commissioner to enforce local laws regarding overtime hours or minimum wage provisions and to issue citations and penalties for violations, except when the local entity with jurisdiction in the matter has already issued a citation or has initiated an investigation against an employer for the same violation. This bill also would make related conforming changes. By expanding the definition of a crime, this bill would create a state-mandated local program. This bill contains other related provisions and other existing laws.
AB 1245 (Cooley) Senate Labor and Industrial Relations Unemployment insurance: electronic reporting and funds transfers – Passed 5-0 - Now on to Senate Appropriations
This bill, beginning on January 1, 2017, would require an employer with 10 or more employees to file all reports and returns electronically and remit all contributions for unemployment insurance premiums by electronic funds transfer, except as provided.
AB 1308 (Perea) Senate Labor and Industrial Relations Apprenticeship programs: approval – Passed 4-1 – Now on to Senate Appropriations
Would revise specified conditions for when the apprentice training needs in the building and construction trades justify a new apprentice program. This bill would also remove the authority of the California Apprenticeship Council to approve a new apprenticeship program justified by special circumstances by regulation.
Bills Set For Next Week
Following are bills set to be heard next week. For those of you interested in bills containing “skilled and trained workforce” provisions, pay particular attention to AB 1185. AB 1431 would require a project labor agreement in its provisions. Both bills are set to be heard in Senate Education Committee:
AB 514 (Williams) Senate Com. on Governance & Finance -Ordinances: violations: fines.
Would eliminate fine amounts for violations of local building and safety code ordinances determined to be an infraction and instead authorize the fine amounts for violations of specified county ordinances, including local building and safety ordinances, determined to be an infraction to be established by an ordinance that is subject to specified maximum amount requirements for the first, 2nd, 3rd, and subsequent violations of the same ordinance. If one of these specified ordinances is not subject to a fine ordinance, this bill would specify the amount of the fine.
AB 1171 (Linder) Senate Transportation - Construction Manager/General Contractor method: regional transportation agencies: projects on expressways.
Would authorize regional transportation agencies to use the Construction Manager/General Contractor project delivery method, as specified, to design and construct certain expressways that are not on the state highway system if the expressways are developed in accordance with an expenditure plan approved by voters as of January 1, 2014. The bill would require specified information provided to a regional transportation agency to be verified under oath.
AB 1185 (Ridley-Thomas) Senate Education - Los Angeles Unified School District: best value procurement: pilot program.
Would establish a pilot program to authorize the Los Angeles Unified School District to use, before December 31, 2020, a best value procurement method for bid evaluation and selection for public projects that exceed $1,000,000. The bill would establish various requirements applicable to the use of the best value procurement method under this authorization.
AB 1431 (Gomez) Senate Education - Local Agency Public Construction Act: job order contracting.
The Local Agency Public Construction Act authorizes job order contracting, as provided, by the Los Angeles Unified School District (LAUSD), until December 1, 2020. This bill would authorize job order contracting in a similar manner for school districts other than LAUSD until January 1, 2022. The bill would restrict job order contracting pursuant to the bill to school districts that have entered into a project labor agreement or agreements, as defined, that will apply to all public works in excess of $25,000 undertaken by the school district through at least December 31, 2021, regardless of what contracting procedure is used to award that work.
SB 560 (Monning) Senate Business and Professions - Contractors
This bill would authorize the Contractors License Board to additionally enforce the obligation to secure the payment of valid and current workers' compensation insurance.
Fact or Fiction: “Independent Contractor” Has the Same Meaning for All Government Agencies
Fiction: If one government agency determines an employee is an independent contractor for one purpose, it does not mean a different government agency will reach the same conclusion. Generally, the right to control the manner and means by which the individual performs his or her services is the most important factor, but you have to look at the interpretations that various enforcement agencies use to determine if an individual will be considered an employee or an independent contractor in any given situation.
From the Division of Labor Standards Enforcement:
“The state agencies most involved with the determination of independent contractor status are the Employment Development Department (EDD), which is concerned with employment-related taxes, and the Division of Labor Standards Enforcement (DLSE), which is concerned with whether the wage, hour and workers’ compensation insurance laws apply. There are other agencies, such as the Franchise Tax Board (FTB), Division of Workers’ Compensation (DWC), and the Contractors State Licensing Board (CSLB), that also have regulations or requirements concerning independent contractors.
Since different laws may be involved in a particular situation such as a termination of employment, it is possible that the same individual may be considered an employee for purposes of one law and an independent contractor under another law. Because the potential liabilities and penalties are significant if an individual is treated as an independent contractor and later found to be an employee, each working relationship should be thoroughly researched and analyzed before it is established.”