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HomeMy WebLinkAbout2004-06-21; Parks & Recreation Commission; 604-5; Use of Volunteers/Proposed LegislationAB# 604-5 TITLE: MTG. DATE: 6-21-04 USE OF VOLUNTEERS/ - PROPOSED LEGISLATION I 0 ACTION I INFO - STAFF: BEVERLY 1 I I RECOMMENDED ACTION: Accept and file staff report. ITEM EXPLANATION: During the May 2004 meeting, the Commission requested an update regarding proposed legislation in association with the use of volunteers and in particular, requirements to pay prevailing wage to those volunteers while in public service. Sue key, Carlsbad’s Community Volunteer Coordinator has provided specific written information (EX 1) for review by the Commission. Staff will give a verbal update concerning the current legislation in progress regarding this issue. EXHIBITS: 1. Memo to Senior Management Analyst (with supporting documentation) June 15, 2004 LIVE - WORK - PLAY - ENJOY! To: Senior Management AnalysU From: Community Volunteer Coordinator Date: 0611 5/2004 Re: Prevailing Wage for Volunteers Background Due to a court case, the Department of Industrial Relations is now enforcing provisions of the Labor Code that were not previously enforced. This enforcement is forcing government agencies to pay prevailing wages on public works projects, even to those who desire to volunteer their time and effort. The definition of "public works" projects is very broad covering all projects except those specifically exempted. The exemptions are: o o o o Work performed entirely by volunteer labor. Work involving structures used primarily by nonprofit community organizations. Work that will not have an adverse impact on employment. Work approved for a waiver by the Director of Industrial Relations. Action The Community Volunteer Coordinator intended to apply for waivers for City volunteer projects. However, Assembly Bill 2690 was written to correct the problematic language and allow volunteers to give of their time. It will apply retroactively, thus covering the City's legal exposure. AB 2690 has passed the State Assembly. A vote in the State Senate is expected around June 24. That approval will pass the bill onto the Governor's desk where a prompt signature is expected. EXHIBIT 1 To: Regional Board staff From: DFA VOLUNTEERS AND PREVAILING WAGES The Law Under existing law, the use of volunteer labor is strictly limited. The Labor Code requires that prevailing wages be paid on public works projects that cost over $1 000.’ “Public works” is defined as “construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds.. .”.2 There is an exception for volunteer labor, but the volunteer labor exception has four restrictions, as follows: For the limited purposes of this chapter, “public works” shall not include any otherwise covered work which meets all the following conditions: (a) The work is performed entirely by volunteer labor. (b) The work involves facilities or structures which are, or will be, used exclusively by, or primarily for or on behalf of, private nonprofit community organizations including, but not limited to, charitable, youth, service, veterans, and sports groups or associations. (c) The work will not have an adverse impact on employment. (d) The work is approved by the Director of Industrial Relations [DIR] as meeting the requirements of this section. For purposes of subdivision (c), the director shall request information on whether or not the work will have an adverse impact on employment from the appropriate local or state organization of duly authorized employee representatives of workers employed on public works3 How the Law Has Been Applied: Reseeding, Site Cleanup, Etc. An alarming consequence of the state of the current law is exemplified by a case in Redding where the Sacramento Watersheds Action Groups received a grant fiom the Department of Water Resources (DWR) to perform levy restoration work. The non- profit used volunteer labor to perform willow staking, spreading seeds and mulch, planting shrubs, operating heavy equipment, site cleanup, off-hauling garbage, and planting vegetation, among other things. On July 23,2003, DIR determined that such activities required the payment of prevailing wages. ’ Labor Code Q 177 1. * Labor Code Q 1720. The Department of Industrial Relations (DIR) has determined that this provision covers grant agreements. (DIR letter to Martin Couwenberg dated Nov 23, 1998 at http://www.dir.ca.gov/dlsr/Coverage/98-005 .pdf.) Labor Code Q 1720.4. Looking at DIR’s posted decisions on volunteer labor, on the web at http://www.dir.ca.gov/DLSR/PrecedentialAlpha.htm, it is abundantly clear that DIR, were it to rule, would find that volunteer labor used in other nonpoint source pollution control, watershed, and restoration activities was subject to prevailing wage requirements. For example, in May 2001, DIR found that minor landscape improvements including aeration, top dressing, overseeding and fertilizing of a school football field performed by some of the high school students did not meet the requirements of the Labor Code exception for volunteer labor. (See http://www.dir.ca.gov/dlsr/Coverage/2000-082.pdf .) DIR found that such activities required payment of prevailing wages.’ The effects of such a ruling and subsequent enforcement would be devastating for watershed restoration efforts throughout the state. . Negative Consequences of the Law’s Enforcement The penalties for not paying prevailing wages include repayment of such wages plus a penalty, as well as possible criminal liability for everyone involved. (Labor Code $9 1775, 1777.) ExamDles of Volunteer Labor Probably Requiring a Determination from DIR - willow staking - spreading seeds and mulch - planting shrubs - operating heavy equipment - site cleanup - off-hauling garbage - planting vegetation - aeration of a field - top dressing of a field - overseeding and fertilizing a field - removal of invasive/exotic vegetation - stream bank stabilizatiodrestoration (mulching, planting native vegetation, etc.) - instream restoration (sediment, trash, and structure removal) - “hands-on” student projects led by volunteers, depending on the project - any and all “pre-constructionyy work, including inspection and land surveying work, if it’s pre-construction 8 . Labor Code provisions 1771, Except for public works projects of one thousand dollars ($1,000) or less, not less than the general prevailing rate of per diem wages ... shall be paid to all workers employed on public works. This section is applicable only to work performed under contract, and is not applicable to work carried out by a public agency with its own forces. This section is applicable to contracts let for maintenance work. 1720. (a) . . . "public works" means: (1 ) Construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds, except work done directly by any public utility company . . .. For purposes of this paragraph, "construction" includes work performed during the design and preconstruction phases of construction including, but not limited to, inspection and land surveying work. (2) Work done for irrigation, utility, reclamation, and improvement districts, and other districts of this type. "Public work" does not include the operation of the irrigation or drainage system of any irrigation or reclamation district, except as used in Section 1778 relating to retaining wages. (3) Street, sewer, or other improvement work ... (4) The laying of carpet . . .. (5) The laying of carpet . . .. (6) Public transportation . . . . (b) For purposes of this section, "paid for in whole or in part out of public funds" means all of the following: (1) The payment of money or the equivalent of money by the state or political subdivision directly to or on behalf of the public works contractor, subcontractor, or developer. subdivision in execution of the project. (2) Performance of construction work by the state or political (3) Transfer by the state or political subdivision of an asset of value for less than fair market price. (4) Fees, costs, rents, insurance or bond premiums, loans, interest rates, or other obligations that would normally be required in the execution of the contract, that are paid, reduced, charged at less than fair market value, waived, or forgiven by the state or political subdivision. (5) Money loaned by the state or political subdivision that is to be repaid on a contingent basis. (6) Credits that are applied by the state or political subdivision against repayment obligations to the state or political subdivision. (c) Notwithstanding subdivision (b): (I) Private residential projects .... (2) If the state or a political subdivision requires a private developer . . . then only the public improvement work shall thereby become subject to this chapter. (3) If the state or a political subdivision reimburses a private developer . .. de minimis ..., an otherwise private development project shall not thereby become subject to the requirements of this chapter. (4) The construction or rehabilitation of affordable housing units.. .. (5) "Paid for in whole or in part out of public funds" does not include tax credits . . . . (6) Unless otherwise required by a public funding program, the construction or rehabilitation of privately owned residential projects . . .. the following projects shall not, solely by reason of this section, be subject to the requirements of this chapter: (1) Qualified residential rental projects, . . .. (2) Single-family residential projects . . .. (3) Low-income housing projects . . . (e) If a statute, other than this section, or a regulation, other (d) Notwithstanding any provision of this section to the contrary, than a regulation adopted pursuant to this section, or an ordinance or a contract applies this chapter to a project, the exclusions set forth in subdivision (d) do not apply to that project. ' (9 For purposes of this section, references to the Internal (9) The amendments made to this section by either Chapter 938 of Revenue Code mean . . .. the Statutes of 2001 or the act adding this subdivision shall not be construed to preempt local ordinances requiring the payment of prevailing wages on housing projects. 1720.4. For the limited purposes of this chapter, "public works" shall not include any otherwise covered work which meets all the following conditions: (a) The work is performed entirely by volunteer labor. (b) The work involves facilities or structures which are, or will be, used exclusively by, or primarily for or on behalf of, private nonprofit community organizations including, but not limited to, charitable, youth, senrice, veterans, and sports groups or associations. (c) The work will not have an adverse impact on employment. (d) The work is approved by the Director of Industrial Relations For purposes of subdivision (c), the director shall request as meeting the requirements of this section. information on whether or not the work will have an adverse impact on employment from the appropriate local or state organization of duly authorized employee representatives of workers employed on public works. 2004 ARGUMENTS FOR LAND CONSERVATION PREVAILING WAGE FACT SHEET AND TALKING POINTS Existing law defines a project as "public work" if the project involves construction, alteration, demolition, installation, or repair work that is done under contract and paid for in whole or in part out of public funds (including grants and bond dollars). General prevailing wages must be paid to workers engaged in public work. Existing law also states that, "Legal and market disincentives and impediments need to be eliminated in order to establish an optimum environment for citizen initiative and voluhteer action." A recent decision by the Department of Industrial Relations jeopardizes resource Conservation work that is funded wholly or in part by public funds by applying the prevailing wage law to volunteerism. The DIR determination also applies to special districts, local governments and public agencies such as the Coastal Conservancy and others that fund these projects. This determination presents significant challenges to nonprofit resource conservation groups using volunteers for a variety of work associated with restoration, preservation, enhancement, management, maintenance, construction, and revegetation of open space where public finds are involved - or if occurring upon public lands. Resource conservation nonprofits depend on volunteerism as an essential element for the successful completion of public works projects. Many organizations will be unable to continue with their community outreach, volunteer involvement, and public education programs in their current capacity under the DIR's prevailing wage ruling. The ability of many nonprofit resource conservation organizations to qualify for public grants actually depends on their use of volunteers. Limiting the ability of resource conservation organizations to use volunteers puts many of these groups, and ultimately the health of their community, at risk. DIR also prohibits students from participating in most public works projects unless they are paid prevailing wages. This removes many opportunities for students to use real world settings as a venue for learning, and greatly impairs the ability of students to become involved in their communities - completely contradicting actions called for in the State's Strategic Initiatives for Enhancing Environmental Education. 0 Labor Code provides an exemption from the requirement to pay prevailing wages for public works, but this exemption is narrow and does not address most volunteer efforts throughout California. 0 Existing law must be adjusted to permit community action and public education projects, such as resource conservation, to receive public funds even when using volunteers. 4AB 2690 Assembly Bill - AMENDED .$ Page 1 Of3 ' BILL NUMBER: AB 2690 AMENDEO BILL mx'r :i' AMENDED IN ASSEMBLY MAY 20, 2004 AMENDED IN ASSEMBLY APRIL 26, 2004 AMENDED IN ASSEMBLY APRIL 12, 2004 INTRODUCED BY Assembly Member Hancock FEBRUARY 20, 2004 An act to -.z 1739.5 TnA :?'- repeal and add Section 1720.4 to the Labor Code, relating to public works. LEGISLATIVE COUNSEL'S DIGEST AB 2690, as amended, Hancock. Public works: funds. Existing law defines "public works," for purposes of regulating public works contracts, as, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds. rr*- --- - t-4 -- -- ffirV--t<&,-t - - -~ -I t% &^T thz --t +t iz .. Otherwise covered work that meets certain criteria, including work that is performed entirely by volunteer labor, is excluded from this definition of "public works. I' Pursuant to existing law, all workers employed on public works shall be paid not less than the general prevailing rate of per diem wages for work, except for public works projects of $1,000 or less. This bill would exempt from these provisions any work that is performed by a volunteer, a volunteer coordinator, or by members of the California Conservation Corps or of certified Community Conservation Corps. The bill would apply this exemption retroactively to otherwise covered work concluded on or after January 1, 2002, to the extent permitted by law. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. a file://C:\Documents%20and%2OSettings\spars\Loca~%2OSettings\Tem~\~~269O - verq ... 06/14/2004 # ,*AB 2690 Assembly Bill - AMENDED .l ,c *, 47 .$ work concluded on or after January 1, 2002, to the extent permitted by law. daa&i- Page 3 of 3