Listed below are some of the important and recent California laws regarding the construction industry.
AB 2293 – Nonprofit Healthcare Joint Powers
• Authorizes one or more private nonprofit mutual benefit corporations to form for the purpose of providing healthcare services in order to create a joint powers authority and enter into such an agreement.
• Permits solicitation and evaluation of bids and awarding of contracts by public entities and requires use of a skilled and trained workforce to complete a contract or project.
• Must pay prevailing wage.
• Must certify under penalty of perjury that a skill and trained workforce was used as well as prevailing wage paid to all eligible construction workers.
AB 1957 – Selected Counties Permitted to Use Best Value Selection
• Alameda, Los Angeles, Monterey, Riverside, San Bernardino, San Diego, San Mateo, Santa Clara, Solano, and Yuba counties may select a bidder on the basis of best value, as defined, for projects in excess of $1 million.
• The Best Value program is extended to January 1, 2030. This is a five-year extension of existing law.
• Maintains current definitions of “Best Value”, “Best value contract,” “Best value contractor,” and other related definitions including “Qualifications.”
AB 1034 – Amends Labor Code 2699.6
• Amends multiple statutes of the Government Code (11 statutes).
• New law addresses expiration of an excavator ticket. Existing law requires an excavator to contact the regional notification center, cease all excavation, and wait a minimum of two working days before restarting excavation.
• This law revises the procedure an excavator must follow, should a ticket expire.
• Law also revises requirements for an excavator to use vacuum equipment.
• Law requires an operator response that an excavator must receive before beginning excavation and the emergency notification procedures when an excavator discovers or causes damage to a subsurface installation.
AB 2579 – Building Inspection Elevated Elements
• Existing law requires inspection by January 1, 2025, and every six years thereafter of all exterior elevated elements and associated waterproofing elements as defined, including decks and balconies, for buildings with three or more multifamily dwelling units.
• The new law extends the deadline for initial inspection until January 1, 2026. The law also provides that no new inspections are required until January 1, 2026, if the property was inspected within three years prior to January 1, 2019.
AB 2696 – Liability for Unpaid Wages and Benefits Labor Code to 218.8
• Amends the above reference code that requires a direct contractor to be liable for any debt owed to a wage claimant or third-party on the wage claimant’s behalf, incurred by a subcontractor of any tier acting under, by, or for the direct contractor for the wage claimant’s performance of labor.
• This bill authorizes a joint labor – management cooperative committee established under the law to bring an action in any court of competent jurisdiction against a direct contractor to enforce liability for any unpaid wages or benefits or contribution as well as liquidated damages and interest. This law adds additional parties that have standing to bring a claim.
SB 1303 – 1771.8 Labor Code – Labor Compliance Program
• Existing law requires the awarding body as part of a labor compliance program to withhold contract payments when, among other things, payroll records are delinquent or inadequate. Existing law requires an awarding body to write a notice of contract payments to the contractor or subcontractor. This notice must be in writing and describe the nature of the violation as well as the amount of wages, penalties, and forfeitures withheld.
• This new law would require a private labor compliance entity, prior to withholding funds for alleged violation, to confer with the negotiating parties to review relevant public works law and would prohibit the entity from withholding an amount that exceeds the alleged underpayments and penalty assessments.
• The new law requires the private labor compliance company seeking to withhold funds to provide a venue for public works contractors to review and respond to evidence of alleged violations as outlined in the statute.
SB 1162 – Employment Compliance Reports – Apprenticeship Programs
• Law requires monthly compliance reports to include the full name and to identify the apprenticeship program name, location, and graduation date, of all workers relied upon to satisfy the apprenticeship graduation percentage requirement.
• Law requires the creation and maintenance of a public online database to verify that a worker graduated from a California apprenticeship program. The database is required to be searchable by using the first name, last name, and graduation date of the worker.
AB 2705 –Labor Code 1743 – Collecting on Payment Bond
• Law limited claimants from commencing an action to enforce a liability on a payment bond at any time after the claimant ceases to provide work, but no later than six months after the period in which a stop payment notice may be given.
• This law provides a limitation period for any action on a payment bond filed by the Labor Commissioner to be governed by the same timing requirements for the Labor Commissioner to serve a civil wage and penalty assessment. In essence, this law extends the payment bond statute of limitations and a surety on a bond.
• The period of any action on a payment bond shall also be tolled pending a final order that is no longer subject to judicial review.
AB 3190 – Amends Section 1720 of the Labor Code Relating to Public Works – Expands Prevailing Wage
• Law expands the definition of what is considered to be a prevailing wage project to include projects paid using credits against a tax, including certain low – income housing tax credits.
• The law exempts from public works provisions, private residential projects built on private property when the public funds are less than $3 million for a project that is the acquisition or rehabilitation of a specified residential project.
• These tax breaks may trigger a prevailing wage requirement. The tax benefit may not be worth the benefit given the potential increase in costs to pay prevailing wages on what was traditionally not prevailing wage work.
AB 2192 – Uniform Public Construction Costs Accounting Act Amendment
• Public Contract Code provides for certain modifications regarding project management delivery if a public entity adopts the Uniform Public Constructs and Costs Accounting Act. This applies to public works.
• The law defines “public project,” which would be considered a public work, to additionally include installations involving any publicly owned, leased, or operated facility.
• There are multiple threshold dollar values which allow the entity to award certain work under the specified conditions, depending on the scope of work, to prequalified contractors properly classified in informal bidding.
• The public entity is to maintain a list and inform all contractors on the list of the category of work being bid and sufficient notice shall be provided per statute.
• The notice of inviting informal bid shall describe the project in general terms and how to obtain the detailed information about the project, and shall state the time and place for the submission of bids.
SB 1455 – Amends 12 Contractor License Law Statutes and Adds Two More
• This bill amends 14 statutes and contains 20+ pages of amendments and modifications to existing California Contractor’s License Law which is in the Business and Professions Code.
• For brevity purposes, this presentation will only deal with the highlights in brief matter, the statutes have been changed and need to be reviewed carefully given the draconian consequences of not being licensed at all times.
New License Law Highlights
• Deletes the requirement that an employment duty statement be included in a specified applicants or licensees information submitted.
• Deletes the provision that makes failure to provide the specified information a cause for discipline. Redefines “direct supervision or control.”
• Requires a corporation or limited liability company seeking licensure to provide its identification number issued by the secretary of state.
• Requires that a qualifying individual who is neither a proprietor, general partner, nor joint licensee to file a bond in the amount of $25,000 in addition to other bonds.
• Maintains existing provision providing for personal liability of $1 million in damages to third parties in certain cases if contractor fails to register and be in good standing with the Secretary of State.
• Licensee that is subject to a public complaint requiring a professional or expert investigation or inspection is required to pay reasonable fees to cover the expenses and costs of that investigation.
• Requires public works authorities to award and determine license classification based on applicable regulations.
• Requires CSL to establish a process and procedure for licensees to establish they are employers eligible for exemption from Worker’s Compensation insurance requirements.
• “Qualifying person,” “qualifying individual,” or “qualifier,” as used in the license law means a person who qualifies for a license pursuant to Section 7068.
• Section 7040 identifies who is exempt from license.
• Section 7059 establishes guidelines for additional classifications and may limit the field and scope of the operations of a licensed contractor to obtain additional classifications.
• Allows a specialty contractor to perform two or more crafts or trades, if the performance of the work in the crafts or trades, other than the one for which it is licensed, is incidental and supplemental to the performance of the work in the craft for which the specialty contractor is licensed.
• Prohibits specialty contractor to perform a prime contract if the specialty contractor work is less than a majority of the project. The specialty work must be the majority of the project in order to perform as a prime contractor.
• Section 7065 sets out the requirements as to who gets a license, who is required to be listed individually, requires all partners to be listed, and requires a corporation or LLC to provide Secretary of State identification numbers. Section 7065 also states who qualifies as an individual, who qualifies as a partnership qualifier, who qualifies as a corporation qualifier, and who qualifies as an LLC qualifier.
• Section 7065 additionally states when an examination is required and when an examination is not required to obtain a license.
• Section 7068.1 establishes what is required of the person qualifying on behalf of an individual or firm. The qualifying individual shall be responsible for exercising supervision and control of their employer’s or principal’s construction operations to secure the compliance with the license law.
• Section 7068.1 states the conditions that the qualifier must meet.
• The term “Firm” and “Person” is defined.
• “Supervision and control” is defined.
• “Direct supervision or control” is defined.
• Section 7071.9 is amended to require new and additional bond requirements for the qualifying individual.
• Section 7076 sets forth the requirements when a license is canceled under various circumstances and the obligations of the license contractor whether it is an individual, partnership license, joint venture license, corporate license, or LLC license.
• Section 7125 adds new requirements for exemptions.
• New requirements are added to establish criteria to meet the Worker’s Compensation exemption.
• Establishes license suspension if there is a failure to meet and comply with an auditor investigation, or if there is a material misrepresentation to the workers comp insured or there is a failure to pay insurance premiums.
• Requirement if Worker’s Compensation insurance is canceled to report the same.
• Requires establishment of procedure by January 1, 2027, for the Board to establish a process and procedure which may include audit, proof, or other means to verify that an applicant or license without an employee is eligible for exemption.
• Section 7137 establishes entirely new fee schedule, increasing fees across the board.
