BILL NUMBER: AB 2675INTRODUCED BILL TEXT INTRODUCED BY Committee on Labor and Employment (Assembly Members Swanson (Chair), Alejo, Allen, Furutani, and Yamada) MARCH 5, 2012 An act to amend Sections 1727 and 1742 of the Labor Code, relating to public contracts. LEGISLATIVE COUNSEL'S DIGEST AB 2675, as introduced, Committee on Labor and Employment. Public works: prevailing wage rates: penalty assessment. Existing law regulating public works contracts requires the awarding body of a public works contract to withhold and retain all amounts required to satisfy any civil wage and penalty assessment issued by the Labor Commissioner before making payments to the contractor of money due under the contract. This bill would specify that those amounts are forfeited amounts. Existing law permits an affected contractor or subcontractor to obtain review of a civil wage and penalty assessment by transmitting a written request for a hearing to the office of the Labor Commissioner that appears on the assessment within 60 days after service of the assessment. Existing law permits an affected contractor or subcontractor to obtain review of the decision of the director, and then an administrative law judge by filing a petition for a writ of mandate to the superior court within 45 days after service of the decision. This bill would provide, notwithstanding the provisions detailing the manner of service required for a civil wage and penalty assessment, that specified extensions of time do not apply to a request for review of an assessment or a petition for a writ of mandate. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1727 of the Labor Code is amended to read: 1727. (a) Before making payments to the contractor of money due under a contract for public work, the awarding body shall withhold and retain therefrom all forfeited amounts required to satisfy any civil wage and penalty assessment issued by the Labor Commissioner under this chapter. The forfeited amounts required to satisfy a civil wage and penalty assessment shall not be disbursed by the awarding body until receipt of a final order that is no longer subject to judicial review. (b) If the awarding body has not retained sufficient money under the contract to satisfy a civil wage and penalty assessment based on a subcontractor's violations, the contractor shall, upon the request of the Labor Commissioner, withhold sufficient money due the subcontractor under the contract to satisfy the assessment and transfer the money to the awarding body. These amounts shall not be disbursed by the awarding body until receipt of a final order that is no longer subject to judicial review. SEC. 2. Section 1742 of the Labor Code is amended to read: 1742. (a) An affected contractor or subcontractor may obtain review of a civil wage and penalty assessment under this chapter by transmitting a written request to the office of the Labor Commissioner that appears on the assessment within 60 days after service of the assessment. Notwithstanding the manner of service performed pursuant to subdivision (a) of Section 1741, the extension of time provided in Section 1013 of the Code of Civil Procedure shall not apply to a request for review of the assessment. If no hearing is requested within 60 days after service of the assessment, the assessment shall become final. (b) Upon receipt of a timely request, a hearing shall be commenced within 90 days before the director, who shall appoint an impartial hearing officer possessing the qualifications of an administrative law judge pursuant to subdivision (b) of Section 11502 of the Government Code. The appointed hearing officer shall be an employee of the department, but shall not be an employee of the Division of Labor Standards Enforcement. The contractor or subcontractor shall be provided an opportunity to review evidence to be utilized by the Labor Commissioner at the hearing within 20 days of the receipt of the written request for a hearing. Any evidence obtained by the Labor Commissioner subsequent to the 20-day cutoff shall be promptly disclosed to the contractor or subcontractor. The contractor or subcontractor shall have the burden of proving that the basis for the civil wage and penalty assessment is incorrect. The assessment shall be sufficiently detailed to provide fair notice to the contractor or subcontractor of the issues at the hearing. Within 45 days of the conclusion of the hearing, the director shall issue a written decision affirming, modifying, or dismissing the assessment. The decision of the director shall consist of a notice of findings, findings, and an order. This decision shall be served on all parties and the awarding body pursuant to Section 1013 of the Code of Civil Procedure by first-class mail at the last known address of the party on file with the Labor Commissioner. Within 15 days of the issuance of the decision, the director may reconsider or modify the decision to correct an error, except that a clerical error may be corrected at any time. The director shall adopt regulations setting forth procedures for hearings under this subdivision. (c) An affected contractor or subcontractor may obtain review of the decision of the director by filing a petition for a writ of mandate to the appropriate superior court pursuant to Section 1094.5 of the Code of Civil Procedure within 45 days after service of the decision. Notwithstanding the manner of service performed pursuant to s ubdivision (b), the extension of time provided in Section 1013 of the Code of Civil Procedure shall not apply for filing a petition for writ of mandate. If no petition for writ of mandate is filed within 45 days after service of the decision, the order shall become final. If it is claimed in a petition for writ of mandate that the findings are not supported by the evidence, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record. (d) A certified copy of a final order may be filed by the Labor Commissioner in the office of the clerk of the superior court in any county in which the affected contractor or subcontractor has property or has or had a place of business. The clerk, immediately upon the filing, shall enter judgment for the state against the person assessed in the amount shown on the certified order. (e) A judgment entered pursuant to this section shall bear the same rate of interest and shall have the same effect as other judgments and shall be given the same preference allowed by law on other judgments rendered for claims for taxes. The clerk shall not charge for the service performed by him or her pursuant to this section. (f) An awarding body that has withheld funds in response to a civil wage and penalty assessment under this chapter shall, upon receipt of a certified copy of a final order that is no longer subject to judicial review, promptly transmit the withheld funds, up to the amount of the certified order, to the Labor Commissioner. (g) This section shall provide the exclusive method for review of a civil wage and penalty assessment by the Labor Commissioner under this chapter or the decision of an awarding body to withhold contract payments pursuant to Section 1771.5.