Nicole Rice

Another look at prevailing wages for companies with Risk Management Plans

By Nicole Rice, Policy Director, Government Relations

Capitol Update, Feb. 2, 2017

The Assembly Labor and Employment Committee will convene this week to receive an update on the implementation and enforcement of SB 54 (Chapter 795, Statutes of 2013) authored by then-Senator Loni Hancock (D-Berkeley) and prompted, in part, by the chemical release and fire at the Richmond oil refinery in August, 2012.

The bill sparked controversy as an eleventh-hour “gut and amend” to require any company with a Risk Management Plan (RMP) to only hire contractors who pay prevailing wages and hire employees from an approved apprenticeship-type program that included advanced safety training. The rationale was that higher wages and apprentice training would improve safety and reduce accidents. In response to overwhelming concern expressed by the business community, the scope was subsequently scaled back and limited to only petrochemical and refineries, beginning January 1, 2014.

SB 54 was noteworthy because it is the first time the state government has forced the provision of prevailing wages onto private industry. The bill was sponsored by the State Building & Construction Trades Council and strongly opposed by CMTA and other business stakeholders as well as the United Steelworkers, who saw this as a grab for thousands of oil refinery jobs rather than about safety.

The hearing will take place on February 8 at 1:30 pm in Sacramento. An agenda and background information should be available online via the State Assembly Committee on Labor and Employment website early next week.

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