$7,200 Fine Dropped - Failure to Timely Dispatch Apprentices

Read the entire DIR Civil Wage Assessment against East Bay Floor Covering, Inc. 7/24/17 here.

Subcontractor East Bay Floor Covering, Inc. (East Bay) work performed on the East Bay on the Hotel Isabel Remodel Project (Project) for TODCO Development Company (TODCO) in San Francisco, California. The Determination found that East Bay failed to timely request the dispatch of apprentices and failed to employ apprentices in compliance with the required apprentice to journeyman ratio on the Project. DLSE assessed an aggregate penalty of $7,220.00 under Labor Code section 1777.7.

The issues for decision are as follows:

East Bay's Request for Official Notice of apprenticeship publications from the Department of lndustrial Relations' website is also granted.

- Whether East Bay timely requested the dispatch of soft floor layer apprentices for the Project and satisfied the one apprentice to five journeymen ratio required by section 1777.5, thereby avoiding liability for penalties under section 1777.7 for failure to satisfy the ratio requirement.

- If East Bay is found not to have requested the dispatch of soft floor layer apprentices for the Project and satisfied the one apprentice to five journeymen ratio required by section 1777.5, what penalties should be imposed under section 1777.7.

In this Decision, the Director finds that East Bay did not fail to timely request the dispatch of soft floor layer apprentices for the Project with sufficient lead time to satisfy the one apprentice to five journeymen ratio required by Labor Code section 1777.5 and is, therefore, not subject to penalties under section 1777.7. Therefore, the Director of Industrial Relations issues this Decision dismissing the Determination.

SUMMARY OF FACTS

l. The Hotel Isabel Remodel (Project) is a public works project subject to the apprenticeship requirements of the Prevailing Wage Law (PWL), California Labor Code Sections 1777.5 through 1777.7.

2. TODCO Development Company issued a Notice to Proceed to NCR Construction, Inc. (NCR), the general contractor, on November 7, 2011, to start construction work on the Project by no later than November 11, 2011.

3. East Bay Floor Covering, Inc. (East Bay) contracted with NCR to perform the installation of soft floor covering on the Project.

4. Attached and incorporated herein by reference marked Exhibit A are the certified payroll reports (CPRs) for East Bay on the Project.

5. East Bay's first day of work was May 24, 2012, and last day of work was May 13, 2013, on the Project.

6. East Bay sent a request for dispatch of apprentice using the DAS 142 form [Division of Apprenticeship Standards (DAS) Request for Dispatch of an Apprentice form (DAS 142)] three times to the Northern California Floor Covering Joint Apprenticeship and Training Committee (JATC).

7. The first DAS 142 dated August 2, 2012, was sent on August 1, 2012, via facsimile asking for an apprentice to start work on August 6, 2012. The JATC dispatched apprentice Ralph Lee to East Bay in response to this request for dispatch and he worked a total of 31.5 hours from August 6 through August 10, 2012.

8. The second DAS 142 dated January 23, 2013 was sent on January 22, 2013, via facsimile. East Bay requested that an apprentice be dispatched on January 28, 2013. However, the JATC did not dispatch an apprentice to East Bay in response to this request for dispatch until February 4, 2013. Apprentice J. Sergio Lomell was employed from February 4 through February 6, 2013, for a total of 18.5 hours.

9. The third DAS 142 dated April 24, 2013, was sent on April 24, 2013, via facsimile. The JATC did not dispatch an apprentice to East Bay in response to this request for dispatch.

10. East Bay also sent a request for dispatch on April 24, 2013, to CityBuild, a hiring program mandated and operated by the City and County of San Francisco asking for an apprentice to start on April 29, 2013. On the same day, CityBuild sent an e-mail to East Bay stating that it would dispatch Li-Yang Chen to start on April 29, 2013. This e-mail and the enclosed Job Notice Form, Referral Slip, and DAS Confirmation of Apprentice Registration are attached and marked Exhibit C2. Li-Yang Chen did not show up on the Project on April 29, 2013, and East Bay sent an e-mail to CityBuild notifying it that the apprentice did not show up.

11. East Bay has no history of apprenticeship violations under the PWL within the past three (3) years.

Based on the above, East Bay submitted a total of three DAS 142 forms requesting the dispatch of apprentices to the JATC. However, East Bay did not submit the first DAS 142 requesting an apprentice until August 1, 2012, after four journeyman worked 235 hours over 11 days off and on at the Project from the week ending May 27, 2012, through the week ending June 17, 2012, at which date East Bay's work paused and workers were laid off (pending a recall when Project needs arose). The DAS 142 asked for an apprentice to report on August 6, 2012. In response, the JATC dispatched one apprentice who worked starting August 6 for 31.5 hours over five days that week, during which time four East Bay journeymen worked another 82.5 hours. After that week, another work layoff occurred.

East Bay journeymen resumed work in the week ending November 18, 2012, working 23 days off and on through the week ending January 27, 2013, during which period East Bay sent no DAS 142 asking for apprentices to work, despite the journeymen working another 328 hours.4 On January 22, 2013, East Bay sent its second DAS 142 to the JATC, requesting an apprentice to report on January 28, 2013. Journeymen worked 78.5 hours over four days in that work week, but no apprentice appeared. The JATC did dispatch an apprentice, but he appeared a week late, working a total of 18.5 hours over 3 days from February 4 to February 6, 2013. During that week, three journeymen worked 64.5 hours over three days.

East Bay journeymen worked the following amounts in the following workweeks when no DAS 142 was submitted: week ending February 17, 2013, 14.5 hours over 2 days; week ending March 17, 2013, 5 hours over 1 day; week ending March 31, 2013, 6.5 hours over 1 day; week ending April 14, 2013, 13 hours over 2 days; and week ending April 28, 2013, 129 hours over 5 days.

On April 24, 2013, East Bay sent its third and last DAS 142 requesting an apprentice to report April 29, 2013. The JATC did not dispatch an apprentice in response to this request. East Bay also sent a request for an apprentice dispatch on April 24, 2013, to a hiring program mandated and operated by the City and County of San Francisco, seeking an apprentice to start on April 29, 2013. No apprentice arrived to work in response to that request.

Finally, East Bay journeymen worked in the following workweeks through the end of East Bay's work on the Project: week ending May 5, 2013, 89 hours over 5 days; week ending May 12, 2013, 5 hours over 1 day; and week ending May 19, 2013, 6.5 hours over 1 day.

OUTCOME

DLSE determined that East Bay violated Labor Code section 1777.5 by failing to timely. Request apprentices when required and failing to employ apprentices in the required 1:5 apprentice to journeyman ratio. DLSE counted 1,179 total journeyman hours to arrive at a figure of 235.8 apprentice hours required by the ratio, but DLSE does not explain how it calculated the 1,179 journeyman hours. Based on the record, the correct total journeyman hours amount to 1,038.5. This figure discounts the hours performed by the journeyman Laborer, who was not qualified to supervise soft floor layer apprentices, and the hours performed by the apprentices themselves over the term of the subcontract. Based on the 1,038.5 hours worked by the soft layer journeymen, the 1:5 ratio by the end of the subcontract would have required 207.7 apprentice hours, not 235.8 hours.

East Bay did request and employ an apprentice who started August 6, 2012, and worked for 31.5 hours that week until being laid off along with the journeyman crew. On January 22, 2013, East Bay again requested dispatch of an apprentice to report on January 29, but the JATC failed to timely respond. Instead, the JATC sent an apprentice who reported on February 4, 2013, a week later than requested, working 18.5 hours. After another crew layoff and recall, on April 24, 2013, East Bay submitted its last dispatch request to the JATC for an apprentice to report on April 29. No apprentice was dispatched, or at least one never arrived to work.

The JATC's tardiness and non-response brings into play the part of section 230.1, subdivision (a) that affects East Bay's liability to comply with the 1:5 ratio requirement. Section 230.1, subdivision (a) holds that if "no apprenticeship committee dispatches, or agrees to dispatch any apprentice to a contractor ... within 72 hours of such request," the contractor "shall not be considered in violation of this section as a result of failure to employ apprentices for the remainder of the project, provided that the contractor made the request in enough time to meet the above-stated ratio."

The parties differ on whether, under the forgiveness provision of section 230.1, subdivision (a), East Bay sent the JATC its dispatch requests in enough time to meet the 1:5 ratio by the end of the subcontract work. East Bay argues that its January 2013 and April 2013 requests were made in enough time and, had the JATC timely dispatched apprentices, it could have complied with the 1:5 ratio requirement. East Bay figures that had apprentices been timely dispatched in response to its January 2013 and April 2013 requests and worked to the end of the subcontract, it could have logged a total of 277.5 apprentice hours, which includes the 50 apprentice hours actually worked and 227.5 more apprentice hours that could have been worked in 2013. East Bay concludes that if 235.8 apprentice hours were required as DLSE says, it would have been 41.7 hours over the minimum required 1:5 ratio and, hence, not in violation.

DLSE disagrees, but focuses solely on the April 2013 failure of the JATC to respond to a dispatch request and the 7 journeyman days left on the Project, during which apprentices could have worked, citing the rule that apprentices must be supervised by journeymen at all times (§ 230.1, subd. (c)). DLSE also cites the regulation (see §230.l(a)) and the DAS 142 form that require an apprentice be dispatched for no less than 8 hour increments. Assuming an 8-hour workday for apprentices, DLSE's count starting the week ending May 5, 2013, would result in no more than 45.5 more apprentice hours in addition to the 50 apprentice hours worked by two apprentices in August 2012 and February 2013. The total apprentice hours to be worked from the week ending to the end of the subcontract would have been 95.5. Asserting 1,179 journeyman hours, DLSE states to meet the 1:5 ratio, East Bay needed 207.7 apprentice hours.

By the April 2013 failure of the JATC to dispatch pursuant to East Bay's request, DLSE asserts, it was too late for East Bay to meet the 1:5 ratio and East Bay cannot avail itself of the forgiveness provision of section 230.1, subdivision (a).

The problem with DLSE's argument is that the regulation absolves a contractor of the ratio requirement after a late dispatch response, one not given "within 72 hours" of a request, not just a total failure to dispatch. On January 24, 2013, East Bay requested an apprentice be dispatched to report January 29. The JATC's dispatch response resulted in an apprentice reporting for work on February 4, 2013, a week late. Hence, the effect of both the late response to the January 2013 dispatch request and the total failure to respond to the April 2013 dispatch requests must be considered in order to answer whether East Bay made its dispatch request "in enough time to meet the above-stated [1:5] ratio." (§ 230.1, subd. (a).)8 The journeyman hours worked from and after the week ending February 5, 2013, must be calculated to determine if, along with apprentice hours actually worked, East Bay could have logged enough apprentice hours as of the January 2013 dispatch request in order to meet the 1:5 ratio.

As stated above, the total number of hours worked on the Project by East Bay journeymen were 1,038.5, which would call for 207.7 apprentice hours under the 1:5 ratio. East Bay used apprentices for 50 hours until the week ending February 3, 2013. Had the JATC timely responded to the January 2013 and April 2013 dispatch requests, based on the 23 journeyman days worked from the week ending February 3, 2013, until the end of East Bay's subcontract (not counting the 3 days in the week of February 4 that an apprentice showed up late), East Bay could have worked apprentices for another 184 hours, assuming an 8-hour workday for apprentices on days that journeymen were present to supervise. Along with the 50 apprentice hours worked in August 2012 and February 2013, East Bay's record of apprentice hours would have totaled 234, meeting the 207.7 total apprentice hours based on the 1:5 ratio. Being more than the required 1:5 ratio, East Bay can take advantage of the regulation's forgiveness provision for the remainder of the project. (§ 230.l, subd. (a).)

While East Bay does not stand in violation for the remainder of the project, the regulation does not expressly forgive failure to employ apprentices in the 1:5 ratio for the period of work up to that point in time. A failure to meet the 1:5 ratio, however, is not measured in the middle of a project for purposes of determining non-compliance. A failure, and its characterization as non­ compliance with the ratio and subject to penalty, can only be determined as of the end of the project, or in this case, at the end of the subcontract work. This observation flows directly from the statutory language, which states: "The contractor shall employ apprentices for the number of hours computed ... before the end of the contract or, in the case of a subcontractor, before the end of the subcontract." (§ 1777.5, subd. (h) (emphasis added.) Similarly, the regulation requires "the contractor [to] employ apprentices for the number of hours [pursuant to the 1:5 ratio] before the end of the contract." (§ 230.1, subd. (a).)

FINDINGS

East Bay timely requested the dispatch of soft floor layer apprentices for the Project and could have satisfied the one apprentice to five journeymen ratio required by section 1777.5, had apprentices timely been dispatched, thereby avoiding liability for penalties under section 1777.7 for failure to satisfy the ratio requirement.

ORDER

The Determination of Civil Penalty is dismissed as set forth in the above Findings.


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