CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 889Introduced by Assembly Member HadwickFebruary 19, 2025 An act to amend Section 1773.1 of the Labor Code, relating to prevailing wage. LEGISLATIVE COUNSEL'S DIGESTAB 889, as introduced, Hadwick. Prevailing wage: per diem wages.Existing law requires workers employed on public works to be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality that the public work is performed, as prescribed, unless an exception applies. Existing law requires the Director of the Department of Industrial Relations to determine the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed.Under existing law, per diem wages include certain employer payments made pursuant to a collective bargaining agreement or for a program or committee established under the federal Labor Management Cooperation Act of 1978, as specified. Existing law provides that these payments are a credit against the obligation to pay the general prevailing rate of per diem wages.Existing law requires the credit for employer payments to be computed on an annualized basis where the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, except under certain circumstances, including a determination by the director that annualization would not serve the purposes of the provisions relating to public works projects.This bill would remove that exception and revoke annualization exemptions authorized by the director prior to January 1, 2026. The bill would authorize an employer to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The bill would require the employer to prove that the credit for employer payments was calculated properly. The bill would authorize the Labor Commissioner to deny the employer credit for employment payments if the employer does not produce payment records. The bill would apply the January 1, 2023, edition of the United States Department of Labor Field Operations Handbook to address prevailing wage fringe benefit credit issues not addressed by California statutes or regulations.The bill would make related findings and declarations.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares the following:(a) Annualization is a principle adopted by the federal Department of Labor in enforcing the Davis-Bacon Act for crediting contributions made to fringe benefit plans based on effective rate of contributions for all hours worked during a year by an employee on both public (Davis-Bacon) and private projects.(b) The annualization principle requires that when converting an employers fringe benefit contribution into an hourly amount, the amount of employer payments must be divided by the total number of hours worked in a year on all projects, public and private, not just the number of hours worked during that year on public projects.(c) The annualization rule prevents a contractor from using the prevailing wage work as the disproportionate or exclusive source of funding for benefits. Contractors are not required to provide benefits on a prevailing wage job nor are they required to make benefit payments on private jobs. However, if a contractor chooses to provide fringe benefits on prevailing wage jobs, it must undertake a proper annualization calculation.(d) The calculation must be done on a yearly basis, the reason for the term annualization. Since plan benefit years vary, any consistent 12-month period may be used.(e) The calculation must be done separately for every individual worker as employer-provided benefits and hours worked may vary.(f) It is the intent of this bill to update and clarify the state public works annualization process.SEC. 2. Section 1773.1 of the Labor Code is amended to read:1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:(1) Health and welfare.(2) Pension.(3) Vacation.(4) Travel.(5) Subsistence.(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(b) Employer payments include all of the following:(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.(3) The employer payment contribution is irrevocable unless made in error.(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:(1)(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.(2)(B) The higher rate of payments is required by a project labor agreement.(3)(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.(4)The director determines that annualization would not serve the purposes of this chapter.(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.(f)(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Assembly Bill No. 889Introduced by Assembly Member HadwickFebruary 19, 2025 An act to amend Section 1773.1 of the Labor Code, relating to prevailing wage. LEGISLATIVE COUNSEL'S DIGESTAB 889, as introduced, Hadwick. Prevailing wage: per diem wages.Existing law requires workers employed on public works to be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality that the public work is performed, as prescribed, unless an exception applies. Existing law requires the Director of the Department of Industrial Relations to determine the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed.Under existing law, per diem wages include certain employer payments made pursuant to a collective bargaining agreement or for a program or committee established under the federal Labor Management Cooperation Act of 1978, as specified. Existing law provides that these payments are a credit against the obligation to pay the general prevailing rate of per diem wages.Existing law requires the credit for employer payments to be computed on an annualized basis where the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, except under certain circumstances, including a determination by the director that annualization would not serve the purposes of the provisions relating to public works projects.This bill would remove that exception and revoke annualization exemptions authorized by the director prior to January 1, 2026. The bill would authorize an employer to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The bill would require the employer to prove that the credit for employer payments was calculated properly. The bill would authorize the Labor Commissioner to deny the employer credit for employment payments if the employer does not produce payment records. The bill would apply the January 1, 2023, edition of the United States Department of Labor Field Operations Handbook to address prevailing wage fringe benefit credit issues not addressed by California statutes or regulations.The bill would make related findings and declarations.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Assembly Bill
No. 889
Introduced by Assembly Member HadwickFebruary 19, 2025
Introduced by Assembly Member Hadwick
February 19, 2025
An act to amend Section 1773.1 of the Labor Code, relating to prevailing wage.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 889, as introduced, Hadwick. Prevailing wage: per diem wages.
Existing law requires workers employed on public works to be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality that the public work is performed, as prescribed, unless an exception applies. Existing law requires the Director of the Department of Industrial Relations to determine the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed.Under existing law, per diem wages include certain employer payments made pursuant to a collective bargaining agreement or for a program or committee established under the federal Labor Management Cooperation Act of 1978, as specified. Existing law provides that these payments are a credit against the obligation to pay the general prevailing rate of per diem wages.Existing law requires the credit for employer payments to be computed on an annualized basis where the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, except under certain circumstances, including a determination by the director that annualization would not serve the purposes of the provisions relating to public works projects.This bill would remove that exception and revoke annualization exemptions authorized by the director prior to January 1, 2026. The bill would authorize an employer to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The bill would require the employer to prove that the credit for employer payments was calculated properly. The bill would authorize the Labor Commissioner to deny the employer credit for employment payments if the employer does not produce payment records. The bill would apply the January 1, 2023, edition of the United States Department of Labor Field Operations Handbook to address prevailing wage fringe benefit credit issues not addressed by California statutes or regulations.The bill would make related findings and declarations.
Existing law requires workers employed on public works to be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality that the public work is performed, as prescribed, unless an exception applies. Existing law requires the Director of the Department of Industrial Relations to determine the general prevailing rate of per diem wages for work of a similar character in the locality in which the public work is to be performed.
Under existing law, per diem wages include certain employer payments made pursuant to a collective bargaining agreement or for a program or committee established under the federal Labor Management Cooperation Act of 1978, as specified. Existing law provides that these payments are a credit against the obligation to pay the general prevailing rate of per diem wages.
Existing law requires the credit for employer payments to be computed on an annualized basis where the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, except under certain circumstances, including a determination by the director that annualization would not serve the purposes of the provisions relating to public works projects.
This bill would remove that exception and revoke annualization exemptions authorized by the director prior to January 1, 2026. The bill would authorize an employer to take full credit for the hourly amounts contributed to defined contribution pension plans that provide for both immediate participation and immediate vesting even if the employer contributes at a lower rate or does not make contributions to private construction. The bill would require the employer to prove that the credit for employer payments was calculated properly. The bill would authorize the Labor Commissioner to deny the employer credit for employment payments if the employer does not produce payment records. The bill would apply the January 1, 2023, edition of the United States Department of Labor Field Operations Handbook to address prevailing wage fringe benefit credit issues not addressed by California statutes or regulations.
The bill would make related findings and declarations.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares the following:(a) Annualization is a principle adopted by the federal Department of Labor in enforcing the Davis-Bacon Act for crediting contributions made to fringe benefit plans based on effective rate of contributions for all hours worked during a year by an employee on both public (Davis-Bacon) and private projects.(b) The annualization principle requires that when converting an employers fringe benefit contribution into an hourly amount, the amount of employer payments must be divided by the total number of hours worked in a year on all projects, public and private, not just the number of hours worked during that year on public projects.(c) The annualization rule prevents a contractor from using the prevailing wage work as the disproportionate or exclusive source of funding for benefits. Contractors are not required to provide benefits on a prevailing wage job nor are they required to make benefit payments on private jobs. However, if a contractor chooses to provide fringe benefits on prevailing wage jobs, it must undertake a proper annualization calculation.(d) The calculation must be done on a yearly basis, the reason for the term annualization. Since plan benefit years vary, any consistent 12-month period may be used.(e) The calculation must be done separately for every individual worker as employer-provided benefits and hours worked may vary.(f) It is the intent of this bill to update and clarify the state public works annualization process.SEC. 2. Section 1773.1 of the Labor Code is amended to read:1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:(1) Health and welfare.(2) Pension.(3) Vacation.(4) Travel.(5) Subsistence.(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(b) Employer payments include all of the following:(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.(3) The employer payment contribution is irrevocable unless made in error.(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:(1)(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.(2)(B) The higher rate of payments is required by a project labor agreement.(3)(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.(4)The director determines that annualization would not serve the purposes of this chapter.(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.(f)(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares the following:(a) Annualization is a principle adopted by the federal Department of Labor in enforcing the Davis-Bacon Act for crediting contributions made to fringe benefit plans based on effective rate of contributions for all hours worked during a year by an employee on both public (Davis-Bacon) and private projects.(b) The annualization principle requires that when converting an employers fringe benefit contribution into an hourly amount, the amount of employer payments must be divided by the total number of hours worked in a year on all projects, public and private, not just the number of hours worked during that year on public projects.(c) The annualization rule prevents a contractor from using the prevailing wage work as the disproportionate or exclusive source of funding for benefits. Contractors are not required to provide benefits on a prevailing wage job nor are they required to make benefit payments on private jobs. However, if a contractor chooses to provide fringe benefits on prevailing wage jobs, it must undertake a proper annualization calculation.(d) The calculation must be done on a yearly basis, the reason for the term annualization. Since plan benefit years vary, any consistent 12-month period may be used.(e) The calculation must be done separately for every individual worker as employer-provided benefits and hours worked may vary.(f) It is the intent of this bill to update and clarify the state public works annualization process.
SECTION 1. The Legislature finds and declares the following:(a) Annualization is a principle adopted by the federal Department of Labor in enforcing the Davis-Bacon Act for crediting contributions made to fringe benefit plans based on effective rate of contributions for all hours worked during a year by an employee on both public (Davis-Bacon) and private projects.(b) The annualization principle requires that when converting an employers fringe benefit contribution into an hourly amount, the amount of employer payments must be divided by the total number of hours worked in a year on all projects, public and private, not just the number of hours worked during that year on public projects.(c) The annualization rule prevents a contractor from using the prevailing wage work as the disproportionate or exclusive source of funding for benefits. Contractors are not required to provide benefits on a prevailing wage job nor are they required to make benefit payments on private jobs. However, if a contractor chooses to provide fringe benefits on prevailing wage jobs, it must undertake a proper annualization calculation.(d) The calculation must be done on a yearly basis, the reason for the term annualization. Since plan benefit years vary, any consistent 12-month period may be used.(e) The calculation must be done separately for every individual worker as employer-provided benefits and hours worked may vary.(f) It is the intent of this bill to update and clarify the state public works annualization process.
SECTION 1. The Legislature finds and declares the following:
### SECTION 1.
(a) Annualization is a principle adopted by the federal Department of Labor in enforcing the Davis-Bacon Act for crediting contributions made to fringe benefit plans based on effective rate of contributions for all hours worked during a year by an employee on both public (Davis-Bacon) and private projects.
(b) The annualization principle requires that when converting an employers fringe benefit contribution into an hourly amount, the amount of employer payments must be divided by the total number of hours worked in a year on all projects, public and private, not just the number of hours worked during that year on public projects.
(c) The annualization rule prevents a contractor from using the prevailing wage work as the disproportionate or exclusive source of funding for benefits. Contractors are not required to provide benefits on a prevailing wage job nor are they required to make benefit payments on private jobs. However, if a contractor chooses to provide fringe benefits on prevailing wage jobs, it must undertake a proper annualization calculation.
(d) The calculation must be done on a yearly basis, the reason for the term annualization. Since plan benefit years vary, any consistent 12-month period may be used.
(e) The calculation must be done separately for every individual worker as employer-provided benefits and hours worked may vary.
(f) It is the intent of this bill to update and clarify the state public works annualization process.
SEC. 2. Section 1773.1 of the Labor Code is amended to read:1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:(1) Health and welfare.(2) Pension.(3) Vacation.(4) Travel.(5) Subsistence.(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(b) Employer payments include all of the following:(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.(3) The employer payment contribution is irrevocable unless made in error.(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:(1)(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.(2)(B) The higher rate of payments is required by a project labor agreement.(3)(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.(4)The director determines that annualization would not serve the purposes of this chapter.(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.(f)(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.
SEC. 2. Section 1773.1 of the Labor Code is amended to read:
### SEC. 2.
1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:(1) Health and welfare.(2) Pension.(3) Vacation.(4) Travel.(5) Subsistence.(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(b) Employer payments include all of the following:(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.(3) The employer payment contribution is irrevocable unless made in error.(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:(1)(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.(2)(B) The higher rate of payments is required by a project labor agreement.(3)(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.(4)The director determines that annualization would not serve the purposes of this chapter.(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.(f)(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.
1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:(1) Health and welfare.(2) Pension.(3) Vacation.(4) Travel.(5) Subsistence.(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(b) Employer payments include all of the following:(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.(3) The employer payment contribution is irrevocable unless made in error.(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:(1)(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.(2)(B) The higher rate of payments is required by a project labor agreement.(3)(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.(4)The director determines that annualization would not serve the purposes of this chapter.(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.(f)(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.
1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:(1) Health and welfare.(2) Pension.(3) Vacation.(4) Travel.(5) Subsistence.(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.(b) Employer payments include all of the following:(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.(3) The employer payment contribution is irrevocable unless made in error.(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:(1)(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.(2)(B) The higher rate of payments is required by a project labor agreement.(3)(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.(4)The director determines that annualization would not serve the purposes of this chapter.(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.(f)(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.
1773.1. (a) Per diem wages, as the term is used in this chapter or in any other statute applicable to public works, includes employer payments for the following:
(1) Health and welfare.
(2) Pension.
(3) Vacation.
(4) Travel.
(5) Subsistence.
(6) Apprenticeship or other training programs authorized by Section 3093, to the extent that the cost of training is reasonably related to the amount of the contributions.
(7) Worker protection and assistance programs or committees established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), to the extent that the activities of the programs or committees are directed to the monitoring and enforcement of laws related to public works.
(8) Industry advancement and collective bargaining agreements administrative fees, provided that these payments are made pursuant to a collective bargaining agreement to which the employer is obligated.
(9) Other purposes similar to those specified in paragraphs (1) to (5), inclusive; or other purposes similar to those specified in paragraphs (6) to (8), inclusive, if the payments are made pursuant to a collective bargaining agreement to which the employer is obligated.
(b) Employer payments include all of the following:
(1) The rate of contribution irrevocably made by the employer to a trustee or third person pursuant to a plan, fund, or program.
(2) The rate of actual costs to the employer reasonably anticipated in providing benefits to workers pursuant to an enforceable commitment to carry out a financially responsible plan or program communicated in writing to the workers affected.
(3) Payments to the California Apprenticeship Council pursuant to Section 1777.5.
(c) Employer payments are a credit against the obligation to pay the general prevailing rate of per diem wages. However, credit shall not be granted for benefits required to be provided by other state or federal law, for payments made to monitor and enforce laws related to public works if those payments are not made to a program or committee established under the federal Labor Management Cooperation Act of 1978 (29 U.S.C. Sec. 175a), or for payments for industry advancement and collective bargaining agreement administrative fees if those payments are not made pursuant to a collective bargaining agreement to which the employer is obligated. Credits for employer payments also shall not reduce the obligation to pay the hourly straight time or overtime wages found to be prevailing. However, an increased employer payment contribution that results in a lower hourly straight time or overtime wage shall not be considered a violation of the applicable prevailing wage determination if all of the following conditions are met:
(1) The increased employer payment is made pursuant to criteria set forth in a collective bargaining agreement.
(2) The basic hourly rate and increased employer payment are no less than the general prevailing rate of per diem wages and the general prevailing rate for holiday and overtime work in the directors general prevailing wage determination.
(3) The employer payment contribution is irrevocable unless made in error.
(d) An employer may take credit for an employer payment specified in subdivision (b), even if contributions are not made, or costs are not paid, during the same pay period for which credit is taken, if the employer regularly makes the contributions, or regularly pays the costs, for the plan, fund, or program on no less than a quarterly basis.
(e) (1) The credit for employer payments shall be computed on an annualized basis when the employer seeks credit for employer payments that are higher for public works projects than for private construction performed by the same employer, unless one or more of the following occur: circumstances exist:
(1)
(A) The employer has an enforceable obligation to make the higher rate of payments on future private construction performed by the employer.
(2)
(B) The higher rate of payments is required by a project labor agreement.
(3)
(C) The payments are made to the California Apprenticeship Council pursuant to Section 1777.5.
(4)The director determines that annualization would not serve the purposes of this chapter.
(2) Paragraph (1) shall apply to all employer payments not made directly to the worker, regardless of whether any contributions are made or benefits are provided with respect to private construction, with the exception of contributions to defined contribution pension plans that provide for both immediate participation and immediate vesting. An employer may take full credit for the hourly amounts contributed to those defined contribution pension plans for public works projects even if the employer contributes at a lower rate or does not make contributions to private construction.
(3) The employer shall have the burden of demonstrating that the credit for employer payments was properly calculated pursuant to this subdivision. The employer shall, upon the request of the Labor Commissioner, produce records of employee hours and employer payments on private construction sufficient for the Labor Commissioner to verify that the credit for employer payments was properly calculated on an annualized basis pursuant to this subdivision. The Labor Commissioner may deny the employer credit for the employer payments if those records are not produced.
(f) Any exemptions to the annualization requirements of subdivision (e) issued by the director prior to January 1, 2026, are revoked.
(f)
(g) (1) For the purpose of determining those per diem wages for contracts, the representative of any craft, classification, or type of worker needed to execute contracts shall file with the Department of Industrial Relations fully executed copies of the collective bargaining agreements for the particular craft, classification, or type of work involved. The collective bargaining agreements shall be filed after their execution and thereafter may be taken into consideration pursuant to Section 1773 whenever they are filed 30 days prior to the call for bids. If the collective bargaining agreement has not been formalized, a typescript of the final draft may be filed temporarily, accompanied by a statement under penalty of perjury as to its effective date.
(2) When a copy of the collective bargaining agreement has previously been filed, fully executed copies of all modifications and extensions of the agreement that affect per diem wages or holidays shall be filed.
(3) The failure to comply with filing requirements of this subdivision shall not be grounds for setting aside a prevailing wage determination if the information taken into consideration is correct.
(h) Prevailing wage fringe benefit credit issues not addressed by California statutes or regulations shall be governed by the January 1, 2023, version of the United States Department of Labor Field Operations Handbook.