What You Need To Know for 2023
As we roll into 2023, we continue to receive questions on what, if any, impact AB 1851 has on the industry and day-to-day operations. The detailed explanation below serves as a primer of what happened and what, if anything, your company needs to do.
The Basics: What Happened?
- Effective January 1, 2023, AB 1851 codifies into law a longstanding enforcement interpretation from O.G. Sansone v. DOT (1976) and Williams v. SnSands Corp. (2007) that prevailing wage coverage applies to "the on hauling of materials used for paving, grading, and fill onto a public works site, if the individual driver’s work is integrated into the flow process of construction."
- Simply put, AB 1851 imported the longstanding interpretation of prevailing wage hauling coverage into Labor Code. Therefore, AB 1851 actually maintains the status quo for prevailing wage hauling coverage on public works.
Clearing Up the Confusion
- One area of confusion for some is that in August 2021, Sansone was actually overturned by the California Supreme Court under Mendoza et al v. Fonseca McElroy Grinding Co.et al. However, the DIR and awarding bodies never issued any new guidance, and most contractors did not change their business practices.
- Another area of confusion stems from the claim that, under AB 1851, prevailing wage coverage does not apply if the truck driver does not exit their vehicle during delivery. However, it is not advised to operate under that interpretation since it is not corroborated by the law, legislative history, or any interpretation from the DIR or other enforcement agencies.
What Else Do Contractors Need to Know?
- While AB 1851 simply restores a previous interpretation (Sansone), not all contractors, truckers or suppliers have been following it consistently. Some have continued to rely on outdated guidance such as owner-operator exemptions or material supplier exemptions, and the DIR has not updated their Off-Site Hauling FAQ or the on-/off-haul information in their Public Works Manual in many years.
- AB 1851 does not, however, include any greater clarity on what exactly is meant by "integrated into the flow process of construction," such as a definition of the timeframe, or if rehandling of materials has any bearing on this. Interpretation of these variables could vary by different awarding bodies, as has always been the case.
Along with Littler Mendelson, UCON hosted a webinar at the end of last year to review the upcoming changes to laws affecting our industry, with a particular emphasis on AB 1851. Additional updates included the California Privacy Rights Act, COVID CalOSHA updates, Salary reporting requirements, GPS data tracking, new leaves of absence protections, and more.
What Should Contractors Do?
For now, it's advisable to maintain your past practice regarding prevailing wage coverage for hauling, so long as it has been compliant in the past.
Additionally, we highly recommend you do the following:
(2) Review all work processes involving on-haul and off-haul as much as possible before bidding on a public works job to determine prevailing wage coverage. The determinations referenced in the DIR's Off-Site Hauling FAQ provide some guidance but are not precedential. You can also request a determination based on the specific situation, but it does take several weeks to get a response from the DIR. (A sample request letter is available to members in the Contractor Resources Library: Trucking Prevailing Wage Rates - Sample Request Letter to DIR.)
(3) Monitor prevailing wage compliance by any entity contracted by you to perform on-/off-haul trucking services on your public works jobsites - sub-haulers, material suppliers, etc. If any work is subject to prevailing wage coverage, these entities need to pay prevailing wages and submit certified payroll reports, as well as be registered with the DIR, regardless if you have a formal contract or purchase order.
(4) Consult with legal counsel regarding specific concerns or issues with your business.
UCON will continue to provide our members with updates as any developments occur. As always, reach out to UCON's Contractor Help Desk with any questions - (925)-855-7900.