Kern County Builders' Exchange News

Date ArticleType
3/15/2017 Legislation
Opinion: Assemblyman Kansen Chu prevailing wage bill would increase cost of housing

03/15/2017     BUSINESS UPDATES

OSHA Proposes Beryllium Rule Delay

Federal workplace-safety officials have proposed pushing back the effective date for a new rule on exposure to beryllium, citing a presidential memorandum calling for a temporary freeze on new regulations. The Occupational Safety and Health Administration announced Wednesday (March 1) that it hopes to postpone the effective date for its final rule entitled “Occupational Exposure to Beryllium,” to May 20. The proposal was published Thursday (March 2) in the Federal Register.

The rule points out that some abrasives used in blasting contain trace amounts of beryllium that, in blasting operations, could potentially exceed the action level.

The effective date was originally scheduled for March 10, but was delayed until March 21 shortly after President Donald J. Trump took office, in response to the “Regulatory Freeze Pending Review” memorandum issued by Trump’s chief of staff, Reince Priebus. In Wednesday’s press release, the agency said that during the initial review process, “OSHA has preliminarily determined that it is appropriate to further delay the effective date to May 20, 2017, for the purpose of additional review into questions of law and policy.”

Beryllium is a component of coal, certain rock materials, volcanic dust and soil used in several industrial applications. Breathing air containing beryllium can deposit beryllium particles in the lungs, presenting immune-system and respiratory risks. Beryllium is a known human carcinogen and can cause chronic lung disease.

New Limits

The new beryllium rule reduces the eight-hour permissible exposure limit for airborne beryllium from 2.0 micrograms per cubic meter to 0.2 micrograms per cubic meter, a limit that applies to all industries. It also establishes a short-term exposure limit or 2.0 micrograms per cubic meter over a 15-minute sampling period.

The effective date was delayed in response to the “Regulatory Freeze Pending Review” memorandum issued by President Trump’s chief of staff, Reince Priebus.

For the construction and maritime industries, the rule applies when materials being used contain greater than 0.1 percent beryllium by weight. Employers using materials with a lesser beryllium content are exempt, “if the employer has objective data demonstrating that employee exposure to beryllium will remain below the action level of 0.1 μg/m3, as an eight-hour time weighted average, under any foreseeable conditions.”

The rule points out that some abrasives used in blasting contain trace amounts of beryllium that, in blasting operations, could potentially exceed the action level. The OSHA website’s frequently-asked-questions section on the rule addresses materials with trace amounts of beryllium, offering some guidance on how employers can determine whether their operations might exceed the action level for beryllium.

Compliance Dates Remain the Same

The proposed delay does not, as it stands, affect compliance dates for the new rule. Compliance dates for most aspects of the rule remain at one year from the original effective date, in this case, March 12, 2018, according to OSHA. Parts of the rule that require changes like change rooms, showers and engineering controls have compliance dates up to three years after the original effective date.

The delay is not official yet, and is subject to public comment. The comment period extends until March 13. Comments can be submitted via Regulations.gov, the government’s electronic rulemaking portal, or via mail.

 

Opinion: Kansen Chu prevailing wage bill would increase cost of housing

California is experiencing a housing supply and affordability crisis with social and economic consequences for communities across the state. Hard working families are feeling the pain as they are forced to go to extraordinary lengths to keep a roof over their head.

That is why it is so hard to understand why Assemblyman Kansen Chu (D-San Jose) would believe that now is the time to inflate the cost of housing by as much as 37 percent. This is precisely what Assembly Bill 199 would do.

AB 199 mandates the payment of prevailing wages on new privately constructed residential housing. This will translate into crippling construction costs that will drive rental and housing prices even higher.

Prevailing wage mandates from the California Legislature have long been a goal of powerful construction unions and were one of the poison pill demands that killed Gov. Jerry Brown’s 2016 affordable housing proposal.

The author of the AB199 represents communities in Santa Clara County, which already has some of the highest housing costs in the country. Recently, a report by Zillow found that a buyer seeking to purchase a new median priced home in the San Jose region would need to plunk down $192,320 to make the 20 percent down payment.

While the effect of prevailing wage rates will vary by region, Los Angeles passed a ballot initiative in November that included a mandate to pay prevailing wage. Beacon Economics estimates this will increase a project’s total cost by 45.8 percent by increasing labor costs.

Beacon compared current market rate wages against prevailing wage rates in the Los Angeles area and found prevailing wage increases the labor costs of a project by an average of 95.3 percent, with many occupations’ mean hourly rate doubling.

The Business Council of San Joaquin County sent a letter to Chu stating that should AB 199 pass, the cost of a 1,500 square foot home would increase by $75,000. A recent study done for the National Association of Home Builders found that for every $1,000 increase in a California home, 15,000 buyers are priced out of the market.

For these reasons, AB 199 would make projects financially infeasible or exorbitantly expensive.

In California, housing costs are being driven by a severe shortage of housing. According to state reports, California is only adding 80,000 new housing units annually – 100,000 units short what is needed to meet demand and lower costs. Its average single family home costs $440,000 – two and a half times the national average. Rents are also 50 percent higher than the rest of the country, with monthly rents for a two-bedroom apartment in Los Angeles and San Francisco ranging from $2,600 to $4,550.

The effects felt throughout the state include increased homelessness, long commute times and multiple families crowding into single units. Families have to spend a disproportionate portion of their incomes on housing: One third of California households spend more than half their income on housing, forcing impossible choices between food, medicine and making their rent or mortgage.

In the last several years, policy makers have approved a $15 minimum wage, increased funding for individuals on social programs and other efforts to help Californians cope with the high cost of living. Should AB 199 pass, those recent efforts would be undermined by higher housing costs.

Lawmakers should oppose prevailing wage and AB 199 – an enormously bad idea designed to help one powerful special interest to the detriment of other Californians. They must support policies that add more housing while lowering, not raising, the costs.

Dave Cogdill, a former state senator, is president and CEO of the California Building Industry Association. He wrote this for The Mercury News.

 

 

 

EMPLOYMENT LAW     

 

 

 

California Court of Appeal Requires Separate Compensation for Time Spent During Rest Periods to Hourly Employees Paid on a Commission-Only Basis

On February 28, 2017, the California Court of Appeal issued its opinion in Vaquero v. Stoneledge Furniture, LLC. The opinion provides guidance to California employers who pay their hourly employees on a commission basis but do not pay separate compensation for time spent during rest periods.

In the case, the employer kept track of hours worked and paid hourly sales associates on a commission basis where, if an employee failed to earn a minimum amount in commissions – comprising of at least $12.01 per hour in commission pay in any pay period – then the employee was paid a “draw” against future advanced commissions. The commission agreement explained: “The amount of the draw will be deducted from future Advanced Commissions, but an employee will always receive at least $12.01 per hour for every hour worked.” In other words, for hourly sales associates whose commissions did not exceed the minimum rate in a given week, the employer clawed back (by deducting from future paychecks) wages advanced to compensate employees for hours worked, including rest periods. The commission agreement did not provide separate compensation for any non-selling time, such as time spent in meetings, on certain types of training, and during rest periods. Although employees clocked out for meal periods, they did not clock out for rest periods.

Two former employees brought suit, alleging, among other things, that the employer did not pay all wages earned during rest periods. The employer filed a motion for summary judgment, arguing that “the rest period claim failed as a matter of law because Stoneledge paid its sales associates a guaranteed minimum for all hours worked, including rest periods.” The trial court granted the employer’s motion, finding that, under the employer’s system, “there was no possibility that the employees’ rest period time would not be captured in the total amount paid each pay period.” The employees appealed.

The California Court of Appeal reversed the trial court’s decision, starting with the premise that the “plain language of Wage Order No. 7 requires employers to count ‘rest period time’ as ‘hours worked for which there shall be no deduction from wages.’” (Italics added by the Court.) The Vaquero Court relied on a 2013 decision in Bluford v. Safeway, Inc., where a sister court had held that this language in Wage Order 7 requires employers to “separately compensate[]” hourly employees for rest periods where the employer uses an “activity based compensation system” that does not directly compensate for rest periods.

Finding that “nothing about commission compensation plans justifies treating commissioned employees differently from other [hourly] employees,” the Vaquero Court agreed with the Bluford Court’s holding that “Wage Order No. 7 requires employers to separately compensate employees for rest periods if an employer’s compensation plan does not already include a minimum hourly wage for such time.” And because the Vaquero employer did not separately compensate its sales associates for rest periods, the Court of Appeal reversed summary judgment.

As had been the case for employers with piece-rate compensation plans, the Vaquero decision makes clear that commission-based compensation plans must separately account for – and pay for rest periods – to comply with California law.