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CA Building Trades Sponsor Bill to Prevent “Deceptive and Unfair” Use of Worker Earnings Deduction

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This is a cross-post from the State Building & Construction Trades Council of California (SBCTC) website, written by SBCTC president Robbie Hunter…


Anti-union contractors deduct earnings from workers’ paychecks. They use the money to fund committees that falsely claim to be about labor compliance, but actually exist solely to further the anti-union contractors’ political interests. Then they claim that expense as a fringe benefit to the worker, which they use to reduce the amount they are legally required to pay the worker under California’s prevailing wage law.

Unfortunately, a loophole in current law allows that deceptive and unfair scenario to happen. And the Associated Builders and Contractors (“ABC”) and their friends are all too happy to exploit it.

The good news is that State Building Trades’ legislative advocates are hard at work in the State Capitol to put a stop to it. To that end, we are the sponsors of Senate Bill 776, authored by Senator Ellen Corbett, D-San Leandro. It would clarify the requirements of bona fide fringe benefits for workers on public works projects.

Contractors on public works projects are obligated to pay their employees the prevailing wage for the craft and locality in which the work is performed. A portion of that obligation can be satisfied by paying fringe benefits, which include payments to “monitor and enforce” worker protection laws. In the case of union contractors, those payments are made to joint labor management compliance committees in which workers have a voice, as defined in the federal Joint Labor Management Cooperation Act of 1978.

But the ABC and the anti-union crowd put their workers’ money into so-called “labor compliance” committees that are actually anything but. Unlike joint labor management committees, these committees have no worker participation at all in setting them up, running them cooperatively, or even using them to ensure labor compliance. Instead, they work to advance the advance the employer’s anti-worker agenda. In effect, workers’ dollars are being taken to be used against their best interests and that of their families.

SB 776 closes this unfair loophole by clarifying that contractor payments for monitoring and enforcing laws related to public works cannot count as a credit toward a contractor’s obligation to pay prevailing wages, if those payments are not made to a joint program or committee established by the federal Labor Management Cooperation Act of 1978.

This will guarantee that workers have a say in how their own money is used on their behalf, and will protect them from ABC-style phony labor compliance committees that actually work against all workers’ best interests.

As our Legislative Director Cesar Diaz explained in his letter to the Legislature: “The types of contractors that engage in this behavior are competing against the scores of good contractors in this state for public works contracts. When they can claim credits that they then don’t pay to their workers who actually earned the benefits, they can underbid good contractors who not only abide by the law, but believe construction workers should get the pay and benefit packages they have earned.”

ABC is none too happy about this bill, nor about the effectiveness with which our legislative advocates have moved it through the Senate and to the Assembly. They complained in a recent communication about the “fast-tracked bill,” and about the fact that it would stop them from diverting workers’ wages to committees which they acknowledge provide workers no meaningful voice.

The truth is that the anti-union crowd doesn’t want to lose a loophole that enables them to cheat workers out of the legally required prevailing wage to which they are entitled.

A hundred years ago big business and monopolies set the rules and wrote the laws. We, the workers had no voice. The Building Trades was formed 111 years ago by workers, for workers, to engage on behalf of all trades within the construction industry. Once again, we can see that if workers do not have input in setting the standards under which they live and work, then big business will do it alone with no regard for us.

That is why we, the State Building Trades, an organization that was formed to defend workers, are proud to sponsor this bill.


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