New compliance changes in California went into effect on January 1, 2019 as a result of AB3018. The new law increases accountability and constraints on the training requirements for journeypersons employed by both general and subcontractors. Before the new law went into effect, contractors were required to employ 30% of journeypersons who had graduated from an apprenticeship program or an employee with equivalent work experience, with exceptions for certain trades. AB 3018 removes these exemptions for certain trades, and now all trades must satisfy the percentage requirement for apprenticeship graduates.
A yearly increase of graduation rate requirements will follow this schedule:
- Work performed on or after January 1, 2019 must have at least 50% of journeypersons that graduated from an apprenticeship program.
- Work performed on or after January 1, 2020 must have at least 60% of journeypersons that graduated from an apprenticeship program.
For occupations listed in the exemption category, the 30% graduation rate applies. These occupations include:
- acoustical installer
- cement mason
- drywall installer or lather
- marble mason
- finisher or setter
- modular furniture or systems installer
- operating engineer
- pile driver
- roofer or waterproofer
- stone mason
- terrazzo worker
- tile layer, setter, or finisher
The only exemptions still in place are for contractors or subcontractors who employ a journeyperson for less than 10 hours of work in a month.
Increases in Fines and Liability
General contractors are required to complete a monthly compliance report that also includes subcontractors that work for them. General contractors must constantly verify that they are complying with this requirement. For non-compliance or contractors who submit intentionally misleading reports, they can face a penalty of up to $5,000 per month and debarment from public projects for one to three years.
If a monthly report is incomplete due to the negligence of a subcontractor, the public agency will withhold 150% of the value of the monthly bill for the subcontractor. The public agency has an oversight duty to withhold further payments until sufficient compliance standards are achieved.
General contractors should be conscious of the regular labor requirement increases and monitor compliance of their subcontractors. An important component of this is establishing a standard form that should be submitted monthly to the agency, showing compliance by the general contractor and all associated subcontractors.
At eBacon, we make sure our clients and our services are always up to date on the latest government contracting labor laws. Reach out to us today for a free consultation to see how you can stay compliant and save money.