2024 Legislative Session
​On Saturday, August 31st, the California State Legislature adjourned for the year.
 
With the Legislature now adjourned, the focus shifts to the Governor’s office. Governor Gavin Newsom has until Monday, September 30th to act on the bills passed. If signed, most bills go into effect at the start of the new year, unless they have an urgency clause or specify otherwise.

Notably, the Legislature convenes in a two-year cycle and this year was the second year of the 2023-2024 Legislative session. The Legislature will reconvene on Thursday, January 2, 2025.

Legislation of Interest
In 2024, the California Legislature’s count for new bills was 2,124. This figure does not include “two-year” measures that were introduced in 2023 and were still eligible for consideration this year.

On behalf of ASAC, MKP reviewed all bills and amendments to carefully compile a list of about 40 measures for the ASAC Government Relations Committee (GRC) to review. ASAC supported, opposed, offered amendments to, and closely monitored several bills of interest.

Below please find additional information regarding the measures that ASAC supported:

• AB 2677 (Chen), Sureties: liability. Clarifies that license sureties’ liability, including any attorney’s fees or costs, is limited to the penal sum of the bond. Pending on the

Governor’s desk.

• We also conveyed support for resolutions that proclaim the week of March 3, 2024, to March 9, 2024, inclusive, as Women in Construction Week.

 
Below please find additional information regarding the 4 measures that ASAC opposes:

• AB 2705 (Ortega), Labor Commissioner. Provides that, for a violation of public works law, the statute of limitations (SOL) for the Labor Commissioner (LC) to enforce the liability on a payment bond shall be the same as the 18-month SOL for the LC to issue a civil wage and penalty assessment to the contractor or subcontractor on that project, or both. Pending on the Governor’s desk.
• AB 1976 (Haney), Occupational safety and health standards: first aid materials: opioid antagonists. Requires the Division of Occupational Safety and Health (Cal/OSHA), before December 1, 2027, to submit a draft rulemaking proposal to revise standards to require first aid materials in a workplace to include naloxone hydrochloride or another opioid antagonist, as specified, to reverse opioid overdose and instructions for using the opioid antagonist. The Occupational Safety and Health Standards Board shall consider for adoption these revised standards on or before December 1, 2028. Pending on the Governor’s desk.

** ASAC has an “oppose unless amended” position, the amendment would specify this does not apply to first aid kits located at construction worksites.

• SB 1162 (Cortese), Public contracts: employment compliance reports: apprenticeship programs. Requires a contractor, subcontractor, bidder, or other entity to include the full name of, and identify the apprenticeship program name, location, and graduation of, all workers in existing monthly compliance reports made to the public entity or other awarding body for projects with a skilled and trained workforce requirement. Pending on the Governor’s desk.

For each of the measures that ASAC took a position on, MKP submitted a letter to the Legislature/Governor, met with the author, and advocated either in support, in opposition, or for amendments.

Please find a detailed bill list, that includes further detail, notes, and links to ASAC position letters, for your reference along with this memo.

There were a number of other measures that MKP engaged on for ASAC throughout the legislative process. Thanks again in part to ASAC’s lobbying efforts, several measures that the GRC had concerns with stalled. Also, a couple of bills were amended favorably or in a way that addressed ASAC’s opposition.
Some of these victories include:

• AB 2135 (Schiavo), Public works contracts: wage and penalty assessment. Extends, by six months, the time the Labor Commissioner has to issue a civil wage and penalty assessment against a contractor or subcontractor. The ASAC GRC voted to OPPOSE. Bill was held on 8/15/2024 in the Senate Appropriations Committee on the Suspense File.

 

• AB 2439 (Quirk-Silva), Public works: prevailing wages: access to records. Would have expanded the Public Records Act (PRA) to apply to private companies that work on public works projects. This would have been unprecedented, and a huge disincentive for bidding on such projects. The ASAC GRC voted to OPPOSE. ASAC joined a coalition which included the California Chamber of Commerce to oppose the bill noting that it would expose private companies to harassment and litigation risks, drive up the costs for public works projects, and serve no public purpose. The bill stalled in the Assembly Appropriations Committee.

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• AB 2622 (Carrillo), Contractors: exemptions: work and advertisements. As introduced, the bill would have expanded the licensing exemption and the advertisement authorization by increasing the maximum aggregate contract price from $500 to $5,000. The ASAC GRC decided on a “Support if Amended” position and noted that the $5,000 figure proposed was too high. To reflect inflation over the years, ASAC suggested amendments that would increase the “minor and inconsequential work” exemption from  $500 to $1,500. The bill was ultimately amended to revise the contractor licensing exemption to allow a person without a contractor’s license to perform minor construction work if the total cost of the project is less than $1,000 (rather than $500). MKP also worked with the author on additional amendments to strike the language in the bill that would have required the Contractors State Licensing Board (CSLB) to annually adjust the minimum work exemption according to the California Consumer Price Index (CPI). This bill is currently pending on the Governor’s desk.

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• AB 3186 (Petrie-Norris), Public works: prevailing wages: access to records. Initially would have required contractors and subcontractors on public works projects to make specified records available to the Division of Labor Standards Enforcement, multi- employer Taft-Hartley trust funds, and joint labor-management committees. The ASAC GRC voted to OPPOSE. On 5/20/24, the bill was amended to strike the reference to  “contractors and subcontractors” and instead require owners and developers undertaking any public works project to make specified records available to the Division of Labor Standards Enforcement (DLSE), multi-employer Taft-Hartley trust funds, and to joint labor-management committees. Ultimately, the bill stalled in the Senate and did not move forward.

 

• SB 830 (Smallwood-Cuevas), Public works. Would have expanded the definition of "public works," for the purpose of the payment of prevailing wages, for public works contracts advertised for bid or awarded on or after January 1, 2026, to also include custom fabrication of sheet metal ducts for heating, ventilation, and air conditioning (HVAC) systems produced offsite and solely and specifically designed and engineered for installation in a public works project. The bill also would have required, beginning January 1, 2026, wages or penalties due pursuant to a violation of prevailing wage requirements for offsite, custom fabrication of sheet metal ducts at an out of state fabrication facility to be assessed jointly and severally against the contractor and the subcontractor installing such ducts. The ASAC GRC voted to OPPOSE. On 08/28/24, the bill was moved to the inactive file.

 

• SB 1340 (Smallwood-Cuevas), Discrimination. Would have required that contractors and subcontractors report demographic information of employees to the California Civil Rights Department (CRD). The ASAC GRC voted to OPPOSE. On 08/23/24, the bill was amended to remove the reporting requirements.

Cal/OSHA Regulations 
On June 20, 2024, the Occupational Safety and Health Standards Board approved California Code of Regulations, Title 8, section 3396, “Heat Illness Prevention in Indoor Places of Employment”. This standard applies to most workplaces where the indoor temperature reaches 82°F. It establishes required safety measures for indoor workplaces to prevent worker exposure to risk of heat illness. This standard went into effect on July 23, 2024.

In California, employers must take steps to protect workers from heat illness in both indoor and outdoor workplaces under the California Code of Regulations, Title 8 (T8CCR), sections 3395 and 3396. Employers may be covered under both the indoor and outdoor regulations if they have both indoor and outdoor workplaces.

PAGA Reform
The Private Attorneys General Act (PAGA) is a distinctive piece of legislation in California labor law. Enacted in 2004, PAGA allows employees to sue their employers for labor code violations on behalf of themselves, other employees, and the state of California. Unfortunately, because the law deputizes private attorneys to file lawsuits on behalf of those employees, PAGA has been abused. Attorneys have leveraged PAGA’s penalties to get big settlements even if the claims have no merit. The employer ends up paying a hefty sum with much of the money going to the attorneys and very little going to workers or the state. In sum, PAGA has significantly increased employment litigation in California yet has left unfulfilled its promise of improved compensation for employees for alleged harm.

This year, the Fix PAGA coalition, representing non-profits, social justice advocates, family farmers, healthcare providers, and businesses worked to qualify a reform measure for the November 2024 ballot.

However, to avoid a contentious fight ballot campaign, Governor Gavin Newsom, in partnership with legislative leadership and business and labor groups, announced an agreement on needed reforms to the PAGA on June 18th.
By way of background, the core elements of the reform package include:
 
 Employee Share of Penalty

• Increases share employees receive from any penalty from 25% to 35%.

 Standing

• Requires the employee (plaintiff) to personally experience the alleged violations brought in a claim.
• Alleged violations must have occurred within the last year (presently, there is no time limitation).

Penalty

• Caps Penalties: For employers who proactively take steps to comply with the Labor Code before receiving a notice, the maximum penalty that can be awarded is 15 percent of the applicable penalty amount.

• Caps Penalties: For employers who take steps to fix policies and practices after receiving a PAGA notice, the maximum penalty that can be awarded is 30 percent of the applicable penalty amount.
• Reduces the maximum penalty where the alleged violation was brief or where it is  a wage statement violation that did not cause confusion or economic harm to the employee (i.e. misspelling of company name or forgetting to add “Inc.” on the pay statement).
• Levels the playing field for employers who pay weekly by ensuring a penalty is adjusted. Presently, such employers are penalized at twice the amount because the penalty accrues on a per pay period basis.
• Addresses derivative claims.
• Creates a new penalty ($200 per pay period) if an employer acted maliciously, fraudulently, or oppressively.

Employer Right to Cure

• Expands which Labor Code sections can be cured, so employees are made whole quickly.
• Protects small employers by providing a more robust right to cure process through the state labor department (Labor and Workforce Development Agency) to reduce litigation and costs.
• Provides an opportunity for early resolution in court for employers.

 Strengthening Enforcement Agency

• The Administration will pursue a trailer bill to give the California Department of Industrial Relations (DIR) the ability to expedite hiring and filling vacancies to improve and expedite enforcement of employee labor claims.

 Judicial Discretion (Manageability)

• Codifies that a court may limit both the scope of claims and evidence presented at trial.

·         Injunctive Relief

• Allows for injunctive relief.

 
The two legislative bills encompassing the agreed-upon reforms to PAGA were voted on and approved by the Legislature on, June 27th. Taken together, the two bills reform PAGA to ensure workers retain a strong tool to resolve labor claims and receive fair compensation, while limiting the shakedown lawsuits that hurt employers and employees.
The bills – SB 92 (Umberg; D-Santa Ana) and AB 2288 (Kalra; D-San Jose) – were then signed into law by the Governor on Monday, July 1st.

November General Election 
Looking ahead, the November General Election will impact the make-up of the California State Legislature. At least 24 California State Assembly and 11 State Senate seats will turn over. For context, that represents about 25 percent of each house.
 
Term limits account for most of the changes. However, some members are departing to run for Congressional seats.
The California State Senate will lose the following Senators at the end of 2024:

• Senator Brian Dahle – SD 1
• Senator Bill Dodd – SD 3
• Senator Susan Talamantes Eggman – SD 5
• Senator Steve Glazer – SD 7
• Senator Nancy Skinner – SD 19
• Senator Scott Wilk – SD 21
• Senator Anthony Portantino – SD 25
• Senator Richard Roth – SD 31
• Senator Steven Bradford – SD 35
• Senator Dave Min – SD 37
• Senator Toni Atkins – SD 39

 
In some instances, the vacant Senate seats are likely to be filled with current Assemblymembers. This includes:

• Assemblymember Megan Dahle in SD 1
• Assembly member Tim Grayson in SD 9
• Assemblymember Eloise Gómez Reyes in SD 29
• Assemblymember Sabrina Cervantes in SD 31
• Assemblymember Akilah Weber in SD 39

It is also worth noting that 2024 is the first election for odd-numbered State Senate Districts under the newly redistricted maps. As a result, a few seats look substantially different.

The California State Assembly will lose the following Assembly Members at the end of 2024:

• Assemblymember Megan Dahle – AD 1
• Assemblymember Jim Wood – AD 2
• Assemblymember Kevin McCarty – AD 6
• Assemblymember Jim Patterson – AD 8
• Assemblymember Carlos Villapudua – AD 13
• Assemblymember Tim Grayson – AD 15
• Assemblymember Phil Ting – AD 19
• Assemblymember Evan Low – AD 26
• Assemblymember Vince Fong – AD 32
• Assemblymember Devon Mathis – AD 33
• Assemblymember Eduardo Garcia – AD 36
• Assemblymember Chris Holden – AD 41
• Assemblymember Luz Rivas – AD 43
• Assemblymember Laura Friedman – AD 44
• Assemblymember Eloise Gómez Reyes – AD 50
• Assemblymember Wendy Carrillo – AD 52
• Assemblymember Freddie Rodriguez – AD 53
• Assemblymember Miguel Santiago – AD 54
• Assemblymember Reginal Jones-Sawyer – AD 57
• Assemblymember Sabrina Cervantes – AD 58

 

• Assemblymember Anthony Rendon – AD 62
• Assemblymember Marie Waldron – AD 75
• Assemblymember Brian Maienschein – AD 76
• Assemblymember Akilah Weber – AD 79

In addition to the departing Legislators listed above, a couple of close contests are anticipated, the outcomes of which could lead to additional changes should the incumbents not win re-election.
New Legislative members will be sworn in during an organizational session on December 2nd. The changes in the Legislature will trigger new chairmanships and committee memberships. MKP will report on these changes as they are announced.

Looking Ahead – Sponsored Legislation
During the next few months, we understand that ASAC will be evaluating what, if any, bill the organization may wish to pursue. We would like to have our next meeting on October 1st at noon to further discuss any sponsored legislation and make the necessary decisions on whether to move forward with the proposal.

​By MKP
 
Last Friday, May 24th, was the deadline to move bills out of their house of origin. This marks the halfway point of the session. The measures that advanced will now go through the legislative process in the second house. It should be noted that some of these proposals could be further amended/changed or even stall. Policy committee hearings are expected to ramp back up starting this week and through June, as the Legislature will take a month-long summer recess in July. 

Upon their return to Sacramento, the sprint to the finish line will begin.  The respective Appropriations committees face a fiscal deadline of August 16th to meet and report legislation to the Senate and Assembly floors.  Starting on August 19th, lawmakers will hold lengthy floor sessions to debate and pass measures to the Governor’s desk.  As a reminder, the deadline for each house to act on bills is August 31st, at which time the Legislature will adjourn for the year. September 30th is the last day for the Governor to sign or veto bills passed.

​Stay tuned…

ASAC Bill Status Report - July 5, 2022  - ASAC Changes P​osition to Neutral for AB 902
READ MORE
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New California Construction Laws for 2020
​By: Smith Currie
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The California Legislature introduced more than 3,033 bills in the first half of the 2019-2020 session. Via the link below, we summarize some of the more important bills affecting contractors in their roles as contractors, effective January 1, 2020, unless otherwise noted. Not addressed here are many other bills that will affect contractors in their roles as businesses, taxpayers, and employers. Each of the summaries is brief, focusing on what is most important to contractors. Because not all aspects of these bills are discussed, each summary's title is a live link to the full text of the referenced bills for those wanting to explore the details of the new laws.

Visit Smith Currie for Full Report HERE

By, Skip Daum

​January 6, 2020 marks the reconvening of California’s biennial legislative session.  More than 1,000 additional bills will be introduced before the end of February, and several dozen others face final votes by this month’s end as they were held over from 2019.
 
Among the most controversial for all employers is Assembly Bill 5’s “redux”… or a re-do because, as signed into law by Governor Gavin Newsom last fall, it has numerous effects on independent contractors vs. employees.  It proclaims that an independent worker is really an employee deserving of benefits, wage and hours protections, and the right to unionize.  Even though special carve-outs were injected into the bill at the last minute to satisfy certain groups and industries, others such as Uber, Lyft and Doordash have pledged to launch a $90,000,000 (!) ballot initiative (or a new bill) to change its terms.  Construction trades were excluded from AB 5, but ASAC will be watching closely as major lobbying forces will be in the halls daily; these include the Chamber of Commerce, labor, book writers and journalists, nurses, care givers, minimum wage earners, etc.  In addition, lawsuits have already been started challenging the new law.
 
2020 promises to be problematic for other reasons.  It’s an election year, campaigning has begun, political action committees are being solicited for contributions, and the emerging edginess of our national standing due to the impeachment and the recent assassination of a prominent Iranian General.  Legislators will be pressed for their opinions on these matters as they run for election or reelection.  Most will not introduce any bill that draws opposition from constituents and which jeopardizes their chances of winning.
 
That said, and despite a good economy and large treasury surplus, California’s housing shortage and the growing number of homeless persons will dominate the news.  This means there will be at least one dozen meaty bills to address these issues, among another dozen that will go nowhere due to their terms or a legislator’s lack of political “juice”.  And, according to the Department of Finance’s “Population Division” more people left California than entered it, including those without visas.  That’s a ten-year low which cannot signal a prosperous future.
 
Too, the collapse and bankruptcy of the state’s utility giant Pacific Gas & Electric due to wild fires spawned by poor overhead line maintenance will assuredly have the State chip in some relief for tens of thousands of residents whose homes and entire towns have been burnt to the ground.  Shareholders and Wall Street are also gloomy about the financial hit they’ll take.
 
Two bills that ASAC supported were signed into law and merit discussion:  Assembly Bill 456:  The law prescribes various requirements regarding the formation, content, and enforcement of state and local public contracts.  It provided (until January 1, 2020) that contracts entered into on or after January 1, 2017 include a claim resolution process for any claim by a contractor in connection with a public works project against a public entity.  It defines a claim for these purposes as a separate demand by the contractor for one or more of the following: a time extension for relief from damages or penalties for delay, payment of money or damages arising from work done pursuant to the contract for a public work, or payment of an amount disputed by the public entity. This bill extends the operation of this claim resolution process until January 1, 2027.
 
And, Senate Bill 197:  Existing law prohibited the CA Department of Transportation, until January 1, 2020, from withholding retention proceeds when making progress payments for work performed by a contractor. This bill deletes the sunset of 2020, thereby making the prohibition operative indefinitely.  ASAC was a strong advocate in support of the original retention bill and also SB 197.
 
Stay tuned for more news from Sacramento.  ASAC is monitoring bills daily in your behalf. 

Legislative Halftime Report
With Skip Daum

The Super Bowl Circus of all time was had on a full moon evening Friday the 13th in the State Capitol.  With hours to go before the deadline to recess until January around 1,000 bills either moved ahead, were held over until January when session resumes, or were killed.   Amidst the chaos were hundreds of lobbyists and a larger mob of anti-vaccine protestors who disrupted floor proceedings in both the Senate and Assembly.   One tossed a bag of blood onto the Senate floor from the visitors gallery as she screamed something like "this is from the dead babies".  

Senators evacuated the floor and resumed work in a large committee room until 3:15 a.m.  Also among the throng of opponents to the vaccine bill were Uber and Lyft drivers protesting AB 5 which would make them employees instead of independent contractors.  (That bill exempts licensed contractors, and several other "carve outs" were amended into the measure.)  Other bills regard the environment, pushing back on President Trump's regulatory changes, police restraint, affordable housing and local housing density reforms, retentions, and dispute resolution.  

ASAC's bill, AB 1736, was adroitly maneuvered amidst this frenzy and is now sitting on the Governor's desk; he'll act on it within the month.  It requires local agencies to develop prompt notification processes so you can be promptly informed about whose bid was deemed lowest. (See attached letter to the governor.)  More on all these measures in a week... time for a coffee break.

ASAC AB1736 letter to Governor
Legislative Bill Status Report

Skip Daum
Advocate
American Subcontractors Ass'n. - CA