ECA Legislative File

Employers Must Post Job-Related Injuries Summary by February 1st, 2012

A BIG reminder to you!!  Employers must post a summary of job-related injuries and illnesses from 2011 at their place of business by February 1.

The California Department of Industrial Relations (DIR) requires the Cal/OSHA Log 300 summary (Form 300A) to be displayed from February 1 to April 30 for employee review.

A free Log 300 wizard is available at the CalChamber Store  at (www.calchamberstore.com/log300wizard) to help a business determine whether it is subject to recordkeeping requirements.

Companies that had 10 or fewer employees at all times during the last calendar year do not need to keep Cal/OSHA injury and illness records. Employers with 11 or more employees, except those covered in the California low-hazard establishments in the retail, service, finance and real estate sectors, must display the totals from the Summary of Work-Related Injuries and Illnesses (Cal/OSHA Form 300A) wherever employee notices are usually posted. If there is more than one business establishment, a separate summary must be posted in each physical location that is expected to be in operation for one year or longer.

Form 300: Not Posted

The Form 300 is used to record, or log, all injuries and illnesses, except those that have been determined to be first aid only. Typically, the Form 300 is not posted because there may be employee privacy issues involved.

Employers are not to include the employee’s name for specific injuries or illnesses such as needle sticks, HIV infection, hepatitis, sexual assault and others. In addition, an employee suffering from an injury or illness not listed as a privacy issue may request that his/her name not be entered on the log.

Post Form 300A

Another form, the 300A, must be completed and posted beginning February 1. This form contains a summary of the total number of job-related injuries and illnesses that occurred during the previous year. Employers are required to post only the summary (Form 300A)—not the Form 300 (Log)—from February 1 to April 30.

The summary must list the total number of job-related injuries and illnesses that occurred in the previous year and were logged on the Form 300 (Log). Employment information about the annual average number of employees and total hours worked during the calendar year also is required to assist in calculating incidence rates. Companies with no recordable injuries or illnesses in the previous year must post the summary with zeros on the “total” line. A company executive must certify all establishment summaries.

The form is to be displayed in a common area where notices to employees usually are posted. Employers must make a copy of the summary available to employees who move from worksite to worksite, such as construction workers, and employees who do not report to any fixed establishment on a regular basis.

Temporary Workplaces

For establishments in existence for less than one year, one OSHA log/summary may incorporate all recordable injuries and illnesses that may occur at any and all of the “temporary” establishments. That log/summary for the “temporary” establishments may be included with the central location’s Log 300 and summary.

If a company has developed or has available a system to receive all the required accident/illness information to develop and update a site-specific log, a centralized record keeping system can be maintained. The company must have the ability to return the specific information to the affected location within seven days, however.

More Information/Forms

A free wizard to help determine whether a business is subject to Form 300 filing and posting requirements is available at www.calchamberstore.com/log300wizard.

For more information on Form 300 filing and posting requirements, or copies of the OSHA Forms 300, 300A and 301, visit hrcalifornia.com.

Follow Up On Excavation Legislation of Last Week

In last week’s update, I included copies of two new bills that have been introduced which should be of interest to most contractors.  One in particular, AB 1514 (Bonnie Lowenthal), is a bill pertaining to excavation that would expand the entities that can bring an action of enforcement against a violator of the existing Government Code Section 4216 et seq, to also include the Public Utilities Commission (PUC).  I want to stress, while expanding the law to include the PUC is certainly something that would only serve to ‘pile on,’ the remainder of the language within the legislation cites existing law.  To refresh your memory, current Government Code Section 4216.2 states,

4216.2.  (a) (1) Except in an emergency, any person planning to conductany excavation shall contact the appropriate regional notification center, at least two working days, but not more than 14calendar days, prior to commencing that excavation, if the excavation will be conducted in an area that is known, or reasonably should be known, to contain subsurface installations other than the underground facilities owned or operated by the excavator and, if practical, the

excavator shall delineate with white paint or other suitable markings the area to be excavated.

(2) When the excavation is proposed within 10 feet of a high priority subsurface installation, the operator of the high priority subsurface installation shall notify the excavator of the existence

of the high priority subsurface installation prior to the legal excavation start date and time, as such date and time are authorized pursuant to paragraph (1) of subdivision (a) of Section 4216.2. The excavator and operator or its representative shall conduct an onsite meeting at a mutually-agreed-on time to determine actions or activities required to verify the location of the high priority subsurface installations prior to start time.

(b) Except in an emergency, every excavator covered by Section 4216.8 planning to conduct an excavation on private property may contact the appropriate regional notification center if the private property is known, or reasonably should be known, to contain a subsurface installation other than the underground facility owned or operated by the excavator and, if practical, the excavator shall delineate with white paint or other suitable markings the area to be excavated.

So how is excavation defined in the law?

(b) “Excavation” means any operation in which earth, rock, or other material in the ground is moved, removed, or otherwise displaced by means of tools, equipment, or explosives in any of the following ways: grading, trenching, digging, ditching, drilling, augering, tunneling, scraping, cable or pipe plowing and driving, or any other way.

Under current law, Government Code Section 4216 authorizes the Attorney General, a district attorney, or the state or a local agency that issued a permit to excavate to bring an action for the enforcement of a civil penalty against an operator (utility) or excavator who negligently or knowingly and willfully violates these and related provisions.  Current law (Government Code 4216.6 prescribes the fines as:

(a) (1) Any operator or excavator who negligently violates this article is subject to a civil penalty in an amount not to exceed ten thousand dollars ($10,000).

(2) Any operator or excavator who knowingly and willfully violates any of the provisions of this article is subject to a civil penalty in an amount not to exceed fifty thousand dollars ($50,000).

Oh, and besides these aforementioned penalties, a violator can also be cited by the Contractors’ State License Board for a violation of Government Code 4216 as well!

One other thing you should know is the definition of excavator according to the law:

4216 (c) Except as provided in Section 4216.8, “excavator” means any person, firm, contractor or subcontractor, owner, operator, utility, association, corporation, partnership, business trust, public agency, or other entity that, with their, or his or her, own employees or equipment performs any excavation.

Here Come the Feds

Expect to see a lot more legislative activity in this area of the law in the years ahead.  Certainly, last year’s San Bruno disaster has played a role in this increased activity, even though the cause of the explosion had nothing to do with excavation!  Even more importantly is the fact that the Federal Pipeline and Hazardous Materials Safety Administration (PHMSA) published in the Congressional Record back in October, 2009 comments about perceived problems around the country with states not enforcing better excavation enforcement standards which, in-turn, has resulted in damage to utility lines (and to other providers’ facilities) as well as injuries or death in some instances.  PHMSA believes that much of these problems could be resolved if all excavators (which includes contractors and utilities) notified the Regional Notification Centers (One Call Centers) to have locations properly marked prior to excavating.

To this end, PHMSA is seeking to encourage states to strengthen their excavation damage prevention laws and to adequately enforce their respective laws.  Toward this goal and in response to language included in the Pipeline Inspection, Protection, Enforcement, and Safety (PIPES) Act of 2006 (Pub. L. 109-468), PHMSA intends to issue criteria and procedures, through a rulemaking proceeding, for determining whether states are adequately enforcing their damage prevention laws, and for conducting federal enforcements if necessary.

Finally, in response to the introduction of AB 1514 and the anticipation of possible federal action, I hosted a meeting at the Capitol last Thursday with all of the utilities, contractor associations, legislative staff members and other interested stakeholders (about 37 in all) to sit down and discuss this issue in its entirety.  I also invited Assemblywoman Bonnie Lowenthal’s staff to come and give a presentation to the group about her bill.

After it was all said and done, the group decided to leave ‘well enough alone’ and wait for the feds to propose something instead of moving forward with legislation this session.  It was felt that anticipating what the feds might expect in state legislation would be premature at best.  Oh, and almost everyone in the meeting “hated” the idea of the PUC becoming involved.  Stay tuned!

Hopeful Solution To New Hire Law Forthcoming

Also In This Update

• New Bill Start to Trickle In

Update On New Hire Law Problem

In last week’s update, I wrote about the new hire law (which took effect on January 1st) and the problems it is causing employers.  I just received confirmation of a conference call next Thursday morning between the Labor Commissioner’s office, myself, and all of my colleagues (including Bob Roginson) who have been working to resolve the problems.  Keep your fingers crossed that next week’s call will find the solutions.    As always, you’ll be the first to know and have the latest information at your finger tips.  Stay tuned!

New Bills Begin To Trickle In

The commencement of the second year of the two-year session means that new bills are being introduced daily.  Following are a couple that should get your attention!  Remember, the introduction of a new bill only notes the ‘start of the fun!’   While the first one, AB 1514 is intended to ‘go after’ excavators that don’t call before excavating, the second one,  AB 1508 is trying to go after metal thefts.  Unfortunately, while well-intentioned, this could become a royal pain, too!  Your thoughts and suggestions would be appreciated.

   AB 1514, as introduced, Bonnie Lowenthal. Public works:

excavations: violations.

Summary Digest

Existing law generally requires any person planning to conduct an

excavation to contact a regional notification center prior to

excavation, and, if practical, to delineate the areas to be

excavated. Existing law authorizes the Attorney General, a district

attorney, or the state or a local agency that issued a permit to

excavate to bring an action for the enforcement of a civil penalty

against an operator or excavator who negligently or knowingly and

willfully violates these and related provisions.

This bill would also authorize the Public Utilities Commission to

bring an action for enforcement pursuant to the provisions described

above.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 4216.6 of the Government Code is amended to read:

4216.6.

(a) (1) Any operator or excavator who negligently violates this article is subject to a civil penalty in an amount not to exceed ten thousand dollars ($10,000).

(2) Any operator or excavator who knowingly and willfully violates any of the provisions of this article is subject to a civil penalty in an amount not to exceed fifty thousand dollars ($50,000).

(3) Except as otherwise specifically provided in this article, this section is not intended to affect any civil remedies otherwise provided by law for personal injury or for property damage, including any damage to subsurface installations, nor is this section intended to create any new civil remedies for those injuries or that damage.

(4) This article shall not be construed to limit any other provision of law granting governmental immunity to state or local agencies or to impose any liability or duty of care not otherwise imposed by law upon any state or local agency.

(b) An action may be brought by the Attorney General, the district attorney, the Public Utilities Commission, or the local or state agency which issued the permit to excavate, for the enforcement of the civil penalty pursuant to this section. If penalties are collected as a result of a civil suit brought by a state or local agency for collection of those civil penalties, the penalties imposed shall be paid to the general fund of the agency. If more than one agency is involved in enforcement, the penalties imposed shall be apportioned among them by the court in a manner that will fairly offset the relative costs incurred by the state or local agencies, or both, in collecting these fees.

AB 1508, as introduced, Carter. Vehicles: inspection of loads.

Summary Digest

(1) Existing law authorizes the Department of the California

Highway Patrol to stop a vehicle transporting timber products,

livestock, poultry, farm produce, crude oil, petroleum products, or

inedible kitchen grease and inspect certain documents to determine

whether the driver is in legal possession of the load, and, upon

reasonable belief that the driver of the vehicle is not in legal

possession, to take custody of the vehicle and load, as prescribed,

and imposes duties on the sheriff with respect to the care and

safekeeping of those products.

This bill would additionally authorize a member of a city police

department or a member of a county sheriff’s office, whose primary

responsibility is to conduct theft investigations, to stop any

vehicle, and would make those provisions applicable with regard to a

vehicle that is transporting metal products or metal alloy products.

By imposing additional duties on a sheriff regarding the care and

safekeeping of metal products and metal alloy products, this bill

would impose a state-mandated local program.

The bill additionally would authorize a member of a city police

department and a member of the county sheriff’s office, whose primary

responsibility is to conduct theft investigations, to stop and

inspect vehicles transporting any of those loads.

(2) The California Constitution requires the state to reimburse

local agencies and school districts for certain costs mandated by the

state. Statutory provisions establish procedures for making that

reimbursement.

This bill would provide that, if the Commission on State Mandates

determines that the bill contains costs mandated by the state,

reimbursement for those costs shall be made pursuant to these

statutory provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes.

State-mandated local program: yes.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 2810 of the Vehicle Code is amended to read:

2810.

(a) A member of the Department of the California Highway Patrol, a member of a city police department whose primary responsibility is to conduct theft investigations, or a member of a county sheriff’s office whose primary responsibility is to conduct theft investigations may stop any vehicle transporting any timber products, livestock, poultry, farm produce, crude oil, petroleum products, metal products, metal alloy products, or inedible kitchen grease, and inspect the bills of lading, shipping or delivery papers, or other evidence to determine whether the driver is in legal possession of the load, and, upon reasonable belief that the driver of the vehicle is not in legal possession, shall take custody of the vehicle and load and turn them over to the custody of the sheriff of the county in which the timber products, livestock, poultry, farm produce, crude oil, petroleum products, metal products, metal alloy products, or inedible kitchen grease, or any part thereof of those loads, is apprehended.

(b) The sheriff shall receive and provide for the care and safekeeping of the apprehended timber products, livestock, poultry, farm produce, crude oil, petroleum products, metal products, metal alloy products, or inedible kitchen grease, or any part thereof of those loads, and immediately, in cooperation with the department, proceed with an investigation and its legal disposition.

(c) Any expense incurred by the sheriff in the performance of his or her duties under this section shall be a legal charge against the county.

SEC. 2.

If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Recent Law Pertaining To New Hires Causing Big Problems

Also In This Update

• Diesel Retrofit Safety Proposal Adopted
• Assembly Republicans Establish Budget Fact Check Website
• CARB Announces Training Dates

Roginson – Ltr to Labor Commissioner Su re DLSE Wage Rate Notice to EmployeeAnother New Law ‘Bites’ Employers

Tell me if this doesn’t sound familiar!  Despite our strong urgings to the contrary (as part of a large employer coalition),  the governor signed into law AB 469 (Chapter 655, Statutes of 2011) which is known as the Wage Theft Protection Act of 2011.  This “turkey” took effect on January 1, 2012 and is already causing big problems.

Labor Code section 2810.5 was added by the bill which requires that all employers must provide each new hire with a “Notice to Employee” and accompanying FAQs.  Employers are supposed to go the DLSE website  to obtain the template (notice) and FAQS at:

http://www.dir.ca.gov/dlse/Governor_signs_Wage_Theft_Protection_Act_of_2011.html

I received an email from my esteemed colleague, Bob Roginson, who is a partner in the law firm of Atkinson, Andelson, Loya, Ruud & Romo, giving me a “heads up” that this new requirement is causing mass confusion amongst employers and to also ask if I’d be willing to join with his other clients in pushing for changes to the law?  My quick reply, “hell yes!”  A copy of his letter to the labor commissioner is attached above in blue.

I will keep you posted; however, in the meantime be sure to go to the aforementioned website and comply with this new law as best as you can.  I was just told this morning that DLSE intends to correct the problems within the next two weeks.  Stay tuned!

Final Diesel Retrofit Safety Proposal Adopted

You may recall that the California Air Resources Board (CARB) issued rules requiring heavy diesel equipment to be fitted with particulate filters, based on studies that it believes show diesel exhaust is an unaddressed health hazard.  Unfortunately, while the CARB staff ultimately mandated devices that would quell these ‘nasty particles,’ they forgot to actually ride in any of the equipment after it was retrofitted (hey, that would have been too much like work!)!

Lo and behold, contractors retrofitting their equipment discovered that the devices seriously blocked the view of the driver which could, in-turn, result in someone getting run over!  So, while the unfortunate victim would have the cleanest pair of lungs in town, the tread marks across the victim’s chest would certainly result in death!

Immediately after discovering this ‘minor’ conflict, Cal OSHA was alerted who, in-turn, suspended the requirement.  It has taken three years and many hours of meetings in between, but alas the Cal OSHA board adopted new regulations in December that will take effect in mid-January if approved by the Office of Administrative law.  Once the final regulation has been approved and published, I will provide you with a copy.  During the interim, the summary of the newly adopted regulations are as follows:

Exhaust Retrofits Proposal at a Glance

CSO §1591

• An exhaust retrofit shall not reduce the capacity, structural integrity or safe performance of a vehicle or reduce an employee’s ability to safely access or egress a vehicle.
• Retrofits shall be located or effectively shielded to prevent employees contacting a surface at least 140°F, and so that the retrofit does not increase the risk of fire from fluid or fuel spills.
• Heat shielding is not required on an exhaust retrofit located under the hood of a vehicle if space limitations make shielding impracticable.
• An exhaust retrofit, excluding exhaust stacks, shall not obstruct the driver’s view of an area or object located 40 inches outside of the smallest rectangle that encompasses the perimeter of a vehicle.
• A modification or addition made to a vehicle to install a retrofit, such as an expanded engine compartment hood or added heat shield, shall be considered part of the exhaust retrofit.
• If a bucket or blade is attached to a vehicle, it shall be placed in the traveling position and shall be considered a part of the vehicle for the purpose of establishing the perimeter of the vehicle to the front and rear, but not to the sides.
• The driver’s view shall be determined without the use of mirrors or cameras.
• The driver’s view shall represent the view that a driver would have under the following conditions:
• The driver weighs at least 195 pounds and is less than 70 inches tall.
• The driver is sitting upright in the driver’s seat and is looking towards the exhaust retrofit.
• The driver’s seat is positioned in the middle of its adjustable range.
• Visibility Test Procedures in Non-Mandatory Appendix A constitute one method that may be used to demonstrate compliance with this subsection.

CARB Announces Training Dates For Truck Regulations

Legislature Returns

The New Year started out promptly this past Wednesday with the return of the California State Legislature to complete the second year of the two-year Legislative Session.  Along with the 34 new bills that were immediately introduced, there are also myriad two-year bills (carryover from last year) that must pass out of their house of origin by the end of this month or they will die.  So while everyone with two-year bills is scurrying about trying to line-up support for their soon to be extinct measures (if they fail to move them), all of we ‘lobbying-types’ are also ‘shopping bills’ to legislators.

In other words everything around the Capitol is based on the calendar.  So while two-year bills have to be out of their house of origin by the end of January, new bills for 2012 must be submitted to Legislative Counsel for drafting by the close of business on Friday, January 24th.  The next deadline is then close of business on Friday, February  27th at which time all bills must have been introduced (except for committee-sponsored bills, but I don’t want to complicate the discussion).  Hence, with the clock ticking, there’s the need to ‘shop’ bills; or rather to convince a legislator and his staff to carry ‘your’ bill because it is so vital, necessary and ‘good’ public policy.

How does one ‘shop’ a bill?  All of us have legislators whom we have worked with and know and trust.  These friendships usually result because of the committees that a legislator sits on which also are the likely committee(s) within which your proposed bill will probably be heard.  Having a legislator with knowledge of your bill’s subject matter (or issue) as author  helps immensely.    Finally, there are also other factors that weigh into the consideration, such as ‘clout’ of a legislator, his/her party affiliation (particularly if it’s going to be a controversial bill) and, if all else fails, a legislator who agrees to author “your” bill when no one else will (which, of course, never happens with “my” bills!).

Our Two-Year Bill

I have one two-year bill, AB 249 (Bill Berryhill), which deals with the issue of disgorgement (Business and Professions Code Section 7031).  Don’t know what that is?  You should!  If for ANY minor technicality, such as forgetting to send in your contractor’s license renewal on time (for example, if you move and don’t inform the Contractors’ License Board (CSLB), you WON’T get your renewal notice and will be suspended because your license has lapsed), or your workers’ comp policy or your license bond is not renewed due to a clerical error, will put you in the exact SAME position as a NEVER licensed contractor!!

Many knowledgeable prime contractors are using this technicality by going online to the CSLB’s website to find contractors with suspended licenses.  Most of these suspended contractors are not even aware that their license is suspended (which is why you should check your own license on a VERY regular basis online).  The prime contractor hires the suspended contractor to do work for them.  According to the law in B&P 7031, you can be disgorged for ALL payments made to you on (a) project(s) even if the suspension is for ONLY 1 hour (or less) while you were working on the project.  In other words, by law you could be required to pay back ALL monies paid to you on (a) project(s), or they don’t have to pay you if you haven’t received any payments yet.  Oh, and for money that has been paid, they can demand interest!

Now that I’ve got your attention, please be aware that I’m (with the support of all of my contractor association colleagues) trying to define and thus exempt ‘minor’ infractions so that disgorgement would not apply in these minor cases for LEGITIMATE contractors only.  Certain factions in organized labor came out in opposition to the bill arguing that ALL contractors have an obligation to remain licensed at all times and that disgorgement should apply to all!  I’ll let them explain to their rank and file why their jobs were eliminated because a longstanding contractor went out of business over this stupid law!

Suffice to say, due to labors’ opposition I cannot get the bill out of committee next week, but have commitments to work on a new bill that will be re-introduced this year.   As long as I can get a bill out of the Legislature and signed by the governor this year that fixes the problem, it doesn’t matter whether we use the two-year bill (AB 249) or a new one.  Either one would not take effect until January 1, 2013.  In the meantime, take heed – CHECK YOUR LICENSE FREQUENTLY!!!

Go to:  https://www2.cslb.ca.gov/OnlineServices/CheckLicenseII/CheckLicense.aspx

2012 Legislation

Besides dealing with likely hundreds of new bills this year, we are sponsoring one other new bill (besides the disgorgement bill).

Defining Disputed Amount – The Prompt Pay statutes are turning into a mess of loopholes.  They provide no relief to contractors against a sophisticated owner.  Even worse, they provide those owners with excuses for withholding more money.  Here’s why:  ‘disputed amount’ is not defined.  As a result, virtually every construction attorney is running into these kinds of things:

A). The owner orders time and material for extra work.  Daily tickets are signed by the owner’s jobsite representative confirming that the equipment and labor actually performed the extra work.  When the extra work is completed, the contractor submits an invoice for $10,000 (for example) for the extra work.  That invoice is the product of what the contractor thought were agreed upon labor rates multiplied by the labor hours on the tickets and what the contractor thought were the agreed upon equipment rates multiplied by the equipment hours on the tickets.

The owner decides the total is too much, so he declares this to be a disputed amount.  Not only does the owner NOT pay for the extra work, but because it is a ‘disputed amount’ the owner withholds what the law provides which is 150% of that amount, i.e. $15,000, from money otherwise due.  In other words, if the contractor had never performed the extra work, that $15,000 would never have been withheld from money otherwise due.  However, since the contractor did $10,000 in extra work, his cash flow is now reduced by $25,000 ($10,000 paid out for the labor and equipment for the extra work PLUS the $15,000 “disputed work” withhold).

While this action is blatantly unfair on the part of an owner, the language in the existing prompt pay statutes appears to sanction it – and sophisticated owners are using this loophole in the law.

B). The job is delayed.  The causes of the delay are disputed.  The owner assesses liquidated damages of $10,000. The contractor contests this assessment.  The owner, in-turn, declares this to be a “disputed amount” and withholds NOT the $10,000, but 150% of the $10,000, i.e. $15,000, because the contractor has disputed the liquidated damages assessment. Once again, the language in the existing prompt pay statutes appears to sanction this loophole in the law.

C). A cost-plus job is performed.  Under the agreement the owner must pay all of the costs of the work.  A dispute develops near the end of the job.  In response, the owner stops paying and the contractor pulls off the job.  The owner now hires another contractor to finish the work at a cost of $10,000 (for example).  The owner then contends that the $10,000 it paid to the other contractor – money it would have had to pay the original contractor under the cost-plus contract – is a disputed amount.  Thus, the owner uses that argument to justify withholding $15,000 from what is still owed to the original contractor for costs of the work done by the original contractor.

In summary, not only are owners using these kinds of arguments to withhold payment, they are ALSO using them to avoid the prompt payment penalties that were supposed to assure prompt payment!

This measure is intended to correct this major loophole in the current prompt pay statutes by defining disputed amount.  It should be noted, we sponsored this measure back in 2004 as AB 2549 (Pacheco) and the following year as AB 341 (Huff).  Both of these measures passed unanimously out of both houses of the Legislature only to be vetoed by former Governor Arnold Schwarzenegger.  During his campaign for governor, Senator Huff asked then candidate Jerry Brown if he were governor again and received a bill that had passed unanimously out of both houses of the Legislature, whether he would veto it?  Brown’s response, “I would defer to the wisdom of the Legislature and sign the measure.”

I am hopeful that with a new governor and the sure support of the Legislature, a re-introduction and successful passage of this measure appears likely in 2012.

Oh, Happy New Year!

DIR launches new Labor Enforcement Task Force to battle California’s underground economy

Oakland – The Department of Industrial Relations (DIR) announces the Jan. 1 launch of the newly created Labor Enforcement Task Force (LETF). LETF is a collaborative effort between state agencies to combat the underground economy and to improve California’s business environment where legitimate employers can thrive.

The primary partners of the LETF include DIR, the Employment Development Department, Contractor’s State License Board, Board of Equalization, and the Bureau of Automotive Repair. LETF will also collaborate with the Department of Insurance, the Attorney General and Local District Attorneys, and others in affected communities.  LETF will help ensure that workers’ rights are protected and that hard-working, compliant business owners have an opportunity for healthy competition in California.

“The goal of LETF is to ensure fair and safe working conditions in all workplaces and promote a level playing field for employers through education and enforcement of state laws,” said Labor and Workforce Agency Secretary Marty Morgenstern. “Labor law violators endanger workers and have an unfair market advantage over law-abiding businesses. We cannot tolerate businesses that skirt the law.”

LETF’s focus on collaboration, wider information-sharing and use of new technology for enforcement will ensure more effective targeting of businesses in the underground economy.  This will help eliminate the worst violations of workers’ rights and protections. The task force will also conduct outreach and education efforts to inform businesses of their rights and responsibilities under the law.

“This effort is using state resources judiciously in a time of limited funding to allow key agencies to collaborate and direct their best efforts to fight the menace of the underground economy,” said DIR Director Christine Baker. “Legitimate businesses grow California’s economy; they are our economic backbone. It is the mission of LETF to see that those businesses are protected.”

The goals of the workforce will be to:

• Ensure workers receive proper payment of wages and are provided a safe work environment.
• Ensure California receives all employment taxes, fees, and penalties due from employers.
• Eliminate unfair business competition by leveling the playing field.
• Make efficient use of the state and federal resources in carrying out the mission of the Labor Enforcement Task Force.

“By joining forces with other agencies conducting inspections, we can have a greater impact on stopping labor violations and the underground economy,” said Christine Baker. “Collaboration will also save time and money by avoiding overlapping inspections and focusing our efforts on the egregious violators.”

Businesses operating underground typically violate many laws designed to protect workers and our state’s economy. These include: not paying income taxes, unemployment insurance or disability insurance; not carrying workers’ compensation coverage; not paying proper wages; and not registering for required licenses or permits. These underground operations subsequently pay lower overhead costs which give them an unfair competitive advantage over legitimate, law-abiding businesses.

For more information on employer and employee rights and responsibilities, please visit www.dir.ca.gov.

Division of Labor Standards Enforcement’s Compliance Monitoring Unit (CMU) Ready For Business – Take Heed

BY: Phil Vermeulen, ECA’s Legislative Advocate

Wednesday, December 28, 2011

Also In This Update

• CSLB Accepting LLC Applications
• Chamber Has 2012 Required Employer Posters

DLSE Compliance Monitoring Unit Ready

The Compliance Monitoring Unit or “CMU” is a new unit within the DLSE that was created to monitor and enforce prevailing wage requirements on public works projects that receive state bond funding and on other projects that are legally required to use the CMU.  The CMU is scheduled to begin operations on January 1, 2012, following the recent adoption of AB 436 and approval of revisions to program regulations.  By actively monitoring compliance on an ongoing basis while work is being performed, the CMU will play a special role in ensuring that public works construction workers are promptly paid the proper prevailing wage rates and in helping maintain a level playing field for contractors who comply with the law.

Effective Date and Applicability:  The laws and regulations that will govern the new program are scheduled to become effective on January 1, 2012 (contingent upon the Department of Finance’s approval of the fees that DIR will charge for monitoring and enforcement).

Only projects for which the public works contract is awarded on or after January 1, 2012 are subject to the CMU requirements.  Contracts awarded prior to January 1, 2012 will be subject to the prior monitoring and enforcement rules (labor compliance programs for some bond-funded or design-build projects or no specific monitoring requirement) for the life of those projects.

Webinars:

• Contractors – Thursday, Jan. 12 (2:30 – 4:30 p.m.)  Go to: https://docs.google.com/a/pvgov.com/spreadsheet/viewform?formkey=dFVwLUlIWlZsamhUSmg1SVA2YmNJUFE6MA  to register

• Contractors – Wednesday, Jan. 18 (2:30 – 4:30 p.m.) Go to:  https://docs.google.com/a/pvgov.com/spreadsheet/viewform?formkey=dGFxY0Q1WFg3TEVFQ0FxMUlSOXBKV3c6MA  to register

For other information about the program, please go to: http://www.dir.ca.gov/dlse/cmu/cmu.html

CSLB Is Ready To Accept Limited Liability Companies (LLC) Applications

Licenses for Limited Liability Companies (LLC)

The passage of Senate Bill 392 (Statutes of 2010, Chapter 698) authorizes CSLB to issue contractor licenses to limited liability companies (LLCs). The law says that CSLB shall begin processing LLC applications no later than January 1, 2012.

CSLB is now accepting applications for licensure from LLCs. LLC applications can be obtained from CSLB’s website at: http://www.cslb.ca.gov/generalinformation/Library/FormsAndApplications.asp#APPORIGLLC

Below are some primary requirements for and components of LLC licenses.

$100,000 Surety Bond
A $100,000 surety bond (in addition to the $12,500 contractor bond) is required for the issuance, reissuance, reinstatement, reactivation, and renewal of an LLC license for the benefit of any employee or worker damaged by the LLC’s failure to pay wages, interest on wages, or fringe benefits, as well as other contributions (not required for inactive LLC licenses). (Business and Professions Code [BPC] Section 7071.6.5)

$1 Million Liability Insurance Minimum
Liability insurance with the aggregate limit of $1 million for licensees with five or fewer persons listed as members of the personnel of record is required; plus, an additional $100,000 is required for each additional member of the personnel of record; not to exceed $5 million total. (BPC 7071.19)

Personnel of Record
Every person who is an officer, member, responsible manager, or director must be listed as personnel of record on LLC applications. (BPC 7065)

Qualifying Individual
LLC licenses must be qualified by appearance of a responsible managing employee (RME), responsible managing officer (RMO), responsible managing manager, or responsible managing member. (BPC 7065)

$1 Million Personal Liability during Secretary of State Suspension
If an LLC license is suspended for failing to be registered and in good standing with the Secretary of State, each person within the LLC may be held personally liable up to $1 million each during the time the LLC is suspended. (BPC 7076.2)

Liability Insurance Information on Contracts
Specific general liability insurance information is required to be included on the LLC’s home improvement and service and repair contracts. (BPC 7159 and 7159.10)

License Number Reissuance
Sole owner and corporate license numbers may be reissued to LLCs under certain circumstances. (BPC 7075.1)

Joint Venture Licenses
An LLC may be listed as an entity on a joint venture license. (BPC 7029)

Partnership Licenses
LLCs may serve as a general partner on a partnership license provided the LLC meets the above requirements relating to the additional surety bond and liability insurance. An LLC serving as a limited partner on a partnership license is not required to meet the additional surety bond and liability insurance requirements.

Business Name Styles
According to the Secretary of State’s office, LLC business names have specific requirements and restrictions. Interested parties should contact the Secretary of State’s office directly (www.sos.ca.gov) for full information about LLC business name issues. Briefly, LLC business names must comply with the following:

• The name of an LLC must end with the phrase “Limited Liability Company” or the abbreviation “LLC” or “L.L.C.” The words “Limited” and “Company” may be abbreviated to “Ltd.” and “Co.,” respectively. (California Corporations Code [CCC] Section 17052 (a))

• The name of an LLC may not include the words “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation,” or “corp.” (CCC 17052(d))

• The name of an LLC may not include the words “insurer” or “insurance company” or any words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks. (CCC 17052(d))

• If the name of a foreign (out-of-state or out-of-country) LLC does not conform to the requirements of CCC 17052, the foreign LLC must agree to transact intrastate business under an assumed name that does meet the requirements of CCC 17052 in order to register with the Secretary of State. (CCC 17452)

Other Requirements
Most other requirements and provisions that apply to corporate licenses will also apply to LLC licenses.

Chamber Has Updated 2012 Required California and Federal Employment Notices Posters and Pamphlets In One ConvenientKit:

• A two-poster set with mandatory updates to required California and federal employment notices for 2012, including the new 11″x17″ NLRA poster that is mandatory for most private-sector employers can be obtained at: http://www.calchamber.com/store/products/pages/compliance-posters.aspx?cid=APS4E&pc=APS4E&sp_rid=OTQ5MDA4Njc0NwS2&sp_mid=38048015
• All five required employee pamphlets with 2012 updates in packs of 20.

Not posting required notices could mean fines of up to $17,000, but you can easily stay compliant with regulations by ordering your 2012 Required Notices Kit now.

Make this the last poster order you place in 2012.

For as low as $15, add our Poster Protect^SM service to your Required Notices Kit order and automatically receive an updated notice if there are mandatory changes during 2012. You pay no shipping, handling or tax.

Poster Protect only covers mandatory updates. Note: Pending lawsuits may change or eliminate the new NLRA posting requirement (originally scheduled to be implemented on January 31, 2012, but now delayed by the NLRB until April 30, 2012). However, if the 4/30/12 mandate stays in place, Poster Protect customers can opt for a no-cost, all-in-one poster that includes the NLRA posting.  More information can be found at: http://www.calchamber.com/SiteCollectionDocuments/new-nlra-posting-requirement-qanda.pdf?sp_rid=OTQ5MDA4Njc0NwS2&sp_mid=38048015

CARB Reporting and Particulate Filter Rules For Certain Diesel Trucks Commences January 1, 2012 – Take Heed!

New CARB Rules Take Effect January 1, 2012

The California Air Resources Board (CARB) is at it again! Isn’t it “great” that while the construction industry continues to spiral downwards, they can continue to “pile it on!” Boy, there’s nothing quite like “our” government “helping, eh?  Effective January 1, 2012, CERTAIN diesel trucks will be bound by new rules and regulations that MUST be complied with by January 31, 2012.  I URGE you to take the time to review the following information to ascertain if the forthcoming regulations affect your business.  FAILURE to comply WILL result in substantial PENALTIES and remember, these bureaucrats would love nothing more than to penalize YOU!

Background

On Wednesday, December 14, 2011, revised CARB Truck and Bus Regulations were approved by the Office of Administrative Law approved. The amendments are effective immediately, with the first compliance date being January 1, 2012.  By that date, fleets with vehicles having a gross vehicle weight rating (GVWR) greater than 26,000 pounds must do either of the following:

• Retrofit 1996-1999 model year engines with Air Resources Board

(ARB) verified particulate matter (PM) filters, OR

• Have 30 percent of the heavier vehicles in the fleet equipped with a PM filter (either a retrofitted verified PM filter or an original equipment PM filter installed on a 2007 or later model-year vehicle).

There are no PM filter requirements for trucks with a GVWR of between 14,000 and 26,001 pounds, or for small fleets (1 to 3 trucks). 

• Be advised that truck owners must report to CARB by January 31,2012 to take advantage of the PM filter phase-in option or other flexibility provisions in the regulation.  Small fleets (1 to 3 trucks) with a GVWR greater than 14,000 pounds must also report to delay compliance for their heavier trucks until January 1, 2014.  The online reporting system and user guide are available at: http://www.arb.ca.gov/msprog/onrdiesel/reportinginfo.htm.

In order to avoid potential enforcement action by CARB, fleets that have not met the PM filter requirements by January 1, 2012 are strongly advised to make every effort to bring the fleet into compliance as soon as possible.

Update

By the way, I’ve been working with my colleagues at the Construction Industry Air Quality Coalition (CIAQ) to urge CARB to hold off on implementing these regulations.  We testified at CARB’s monthly meeting last Friday and urged them for myriad reasons to, at least, wait several more months to implement them.  We then participated in a multi-hour conference call yesterday (Monday, December 19th), with the CARB staff, but that was a COMPLETE waste of time!

Next on the agenda is a conference call with some of the governor’s key advisors this coming Friday, (December 23rd); however, my best advice for now is to plan on complying with these regulations! Hey, we’ll all be one step closer to bankruptcy, but the state will sure have clean air!! Isn’t it nice to know that the state bureaucracy truly cares about business in California!

Oh, and since I’m sure they’ve been too busy to tell you, CARB wants to express to you and yours, Happy Holidays!!!