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State Labor Laws, 2003

Consumer Price Index for urban wage earn- ers and clerical workers for the San Fran- cisco-Oakland-San Jose, California, metro- politan statistical area. The wage require- ment will not apply to businesses with fewer than 10 employees or non-profits until Janu- ary 1, 2005. Starting on that date, those small businesses and non-profits would pay a minimum wage of $7.75 per hour. Effec- tive January 1, 2006, all small businesses and non-profits would pay the minimum wage of $8.50 per hour as adjusted based on the indexed increases. Employees who as- sert their rights to receive the minimum wage will be protected from retaliation.

The prevailing wage law was amended to permit contractors to bring court action to recover increased labor costs, penalties, and legal fees from an awarding body if 1) the awarding body has told the contractor in writing that the work to be covered by the bid was not a “public work,” or 2) the award- ing body received actual written notice from the Department of Industrial Relations that the work to be covered by the bid or contract is a “public work” and failed to disclose that information to the contractor before the bid opening or awarding of the contract. Addi- tionally, the law now permits the contractor to recover increased costs from an awarding body that result from the classification of the work as a “public work” after the job has begun, or the awarding body accepted the contractor’s bid, or the contractor was awarded the contract in circumstances where no bid was solicited. “Awarding body” for purposes of applicability excludes the De- partment of General Services, the Depart- ment of Transportation, and the Department of Water Resources.

The prevailing wage law was amended so that required per diem wages now include employer payments for worker protection and assistance programs or committees es- tablished under the Federal Labor Manage- ment Cooperation Act of 1978, to the extent that the activities of the programs or com- mittees are directed to the monitoring and enforcement of laws related to public works. Additionally, per diem wages also include industry advancement and collective bargain- ing agreement administrative fees, provided that these payments are required under a col- lective bargaining agreement pertaining to the particular craft, classification, or type of work within the locality or the nearest labor market area at issue.

If the State or a political subdivision thereof agrees by contract with a private en- tity that the private entity’s employees re- ceive, in performing that contract, the gen- eral prevailing rate of per diem wages and the

general prevailing rate for holiday and over- time work, the Director of Industrial Rela- tions, upon a request by the State or the political subdivision, is to determine the wage rates for each craft, classification, or type of worker that is needed to execute the contract, and provide these wage rates to the entity requesting them.

The prevailing wage law was amended to provide that employers may take credit for employer payments to pension plans or other contributions against their prevailing wage obligation, even if the payments are not made during the same pay period for which credit is claimed, as long as the em- ployer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.

The information that the Contractor’s State License Board is required to post on the Internet concerning the status of licens- ees is now to include information regarding a licensee’s willful or deliberate violation of the Labor Code. The Labor Commissioner is to maintain a quarterly updated list of con- tractors and subcontractors who were found to have willfully violated the prevailing wage law or to whom a final order has been issued. Interest will accrue, from the date the wages were due and payable, on all due and unpaid wages. Additionally, the violator will pay a penalty of not less than $10 per day for each employee paid less than the prevailing wage—unless the failure to pay the prevail- ing wage was a good-faith mistake that was promptly and voluntarily corrected. The penalty will not be less than $20 per day if the violator was assessed penalties within the 3 previous years for prevailing wage vio- lations, and it will not be less than $30 per day if the Labor Commissioner determines that the violation was willful. The maximum penalty remains at $50 per worker for each day of violations. Back wage claims against the contractor must be satisfied before funds surrendered by the contractor may be ap- plied to imposed penalties.

A resolution was adopted reaffirming the intent of the legislature for the State prevail- ing wage law to apply broadly to all projects subsidized with public funds, including the projects of chartered cities.

A Labor Code Private Attorneys General Act of 2004 was enacted. Under this law, any provision of the Labor Code that pro- vides for a civil penalty to be assessed and collected by the Labor and Workforce De- velopment Agency or any of its depart- ments, divisions, commissions, boards, agen- cies, or employees, for a violation of the code, may as an alternative, be recovered through a civil action brought by an aggrieved

8

Monthly Labor Review

January 2004

employee on behalf of himself or herself and other current or former employees. Any employee who prevails in any action will be entitled to an award of reasonable attorney’s fees and costs. A civil penalty is established where one is not specifically provided under the Labor Code. An action may not be main- tained if the agency or any of its depart- ments, divisions, commissions, boards, agen- cies, or employees has cited a person for the same violation that the aggrieved employee is attempting to recover a civil penalty. A civil penalty will not be awarded if the al- leged violation is a failure to act by the Labor and Workplace Development agency.

Civil penalties were increased for various labor law violations. If an employer fails to pay wages or unlawfully withholds wages, the penalty for a first violation was increased from $50 to $100, and the penalty for subse- quent or willful or intentional violations was increased from $100 to $200 plus 25-per- cent of the amount unlawfully withheld. Twelve and one-half percent of the penalty recovered will be placed in a fund within the Labor and Workforce Development Agency to educate employers about State labor laws. The penalty for an employer who pays less than the minimum wage rose from $50 to $100 per underpaid employee for each pay period. The minimum penalty for a railroad corporation that violates laws regulating work hours was increased from $200 to $500, and the maximum penalty rose from $1,000 to $5,000. The penalty for violating the laws regulating work hours of employ- ees in underground mines, smelters, or plants for the reduction or refining of ores or metals was increased from $50 to $100 for the first intentional violation and from $100 to $200 for each subsequent violation. The penalty for any person who does not hold a State contractor’s license and who employs work- ers to perform services for which a license is required was increased from $100 to $200 per employee for each day of employment.

Legislation was enacted to regulate the employment of workers in the car washing and polishing industry. Car wash employ- ers must register annually, after meeting lo- cal licensing, bonding and other criteria, with the Labor Commissioner and pay a registra- tion fee of $250 for each branch location. A separate annual fee of $50 for each branch location is to be deposited into a Car Wash Worker Restitution Fund to ensure the pay- ment of wages, penalties, and other damages. Employers are also to post a surety bond of $15,000 for the protection of employees. Failure to register may result in a civil fine of $100 being assessed for each day of viola- tion up to a total of $10,000. Each employer

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