DIR Fines Contractor $14k for Not Submitting DAS-140

Read the entire DIR Civil Wage Assessment against GRFCO, Inc. 3/22/16 here.

Affected contractor GRFCO, Inc. (GRFCO) submitted a request for review of a Determination of Civil Penalty (Determination) issued by the Division of Labor Standards Enforcement (DLSE) on December 29, 2014, with respect to work performed by GFRCO on the Sewer Replacement on Garfield Avenue from Bushard Street to Brookhurst Street project (Project) for the City of Fountain Valley (Awarding Body), Orange County, California. The Determination found that GRFCO failed to submit contract award information to applicable apprenticeship programs in accordance with Labor Code section 1777.5, subdivision (e), and failed to employ apprentices in accordance with Labor Code section 1777.5, subdivision (g).

DLSE assessed an aggregate penalty of $14,300.00 under Labor Code section 1777.7.

The issues for decision are as follows:

- Did GRFCO provide each applicable apprenticeship committee with timely notice of contract award information in the manner required by California Code of Regulations, title 8, section 230?

- Did GRFCO properly request dispatch of laborer apprentices from all applicable apprenticeship committees as required by California Code of Regulations, title 8, section 230.1?

- Whether GFRCO was excused from sending a DAS 140 and a DAS 142, or generally a request to dispatch laborer apprentices, to the Associated General Contractors of America, San Diego Chapter because it would have been a futile act to do so as Associated General Contractors of America, San Diego Chapter would not dispatch apprentices to a non-member contractor?

- Did GRFCO fail to employ laborer apprentices on the Project in the minimum ratio required by Labor Code section 1777.5 (20 percent of journeyman hours employed)?

In this Decision, the Director finds that GRFCO failed to properly provide one of the applicable apprenticeship committee with timely notice of contract award information and failed to properly request dispatch of laborer apprentices from two apprenticeship committees in the geographic area of operation of the Project. The Director further finds that GRFCO failed to properly request dispatch of operating engineer apprentices from one apprenticeship committee in the geographic area of operation of the Project. GRFCO, therefore, was not excused from the requirement to employ apprentices under Labor Code section 1777.7. This Decision affirms the Determination that a penalty is appropriate however; the penalty is reduced to more accurately reflect the severity of the violations. Therefore, the Director of Industrial Relations issues this Decision affirming and modifying the Determination.

FACTS

On or about January 20, 2014, GRFCO submitted a Division of Apprenticeship Standards (DAS) Public Works Contract Award Information form (DAS 140) to the Laborers Southern California Joint Apprenticeship Committee (LSC JAC) indicating among other things that it executed a contract on November 5, 2013, to do work on the Project, that it was going to employ journeymen laborers on the Project during the period January 27, 2014, through June 13, 2014, and that it would employ and train apprentices in accordance with the California Apprenticeship Council regulations. Likewise, on or about January 20, 2014, GRFCO submitted a DAS 140 to the Southern California Operating Engineers J.A.C (SCOE) indicating among other things that it executed a contract on November 5, 2013, to do work on the Project, that it was going to employ journeymen operator on the Project during the period January 27, 2014, through June 13, 2014, and that it would employ and train apprentices in accordance with the California Apprenticeship Council regulations.

On or about January 20, 2014, GRFCO submitted a DAS Request for Dispatch of an Apprentice form (DAS 142) to both the LSC JAC and the SCOE. The DAS 142 to the LSC JAC indicated that GRFCO needed one apprentice in the craft or trade of laborer to report on July 27, 2014, to the Project, and provided the name of the person to report to as well as the address and time. The DAS 142 to the SOCE indicated that GRFCO needed 1 apprentice in the craft or trade of operator to report on July 27, 2014, and provided the same contact information. According to GRFCO's certified payroll records (CPRs), the last day an employee worked on the Project was July 3, 2014. The Project was accepted by the Awarding Body on October 8, 2014, and a Notice of Completion was filed. Neither laborer nor operating engineer apprentices were employed on the Project.

Applicable Committees in the Geographic Area. As for labor apprentices, Jackson acknowledged that the LSC JAC was the applicable committee in the geographic area of the Project. As for operating engineer apprentices, Jackson acknowledges that the SCOE was the applicable committee in the geographic area. Jackson denied that the Associated General Contractors of America, San Diego Chapter (AGC-San Diego) was an applicable committee for laborer apprentices.

DISCUSSION

Prior to commencing work on a contract for public works, every contractor shall submit contract award information to an applicable apprenticeship program that can supply apprentices to the site of the public work.

(a) Contractors shall provide contract award information to the apprenticeship committee for each applicable apprenticeable craft or trade in the area of the site of the public works project that has approved the contractor to train apprentices. Contractors who are not already approved to train by an apprenticeship program sponsor shall provide contract award information to all of the applicable apprenticeship committees whose geographic area of operation includes the area of the public works project. This contract award information shall be in writing and may be a DAS Form 140, Public Works Contract Award Information. The information shall be provided to the applicable apprenticeship committee within ten (10) days of the date of the execution of the prime contract or subcontract, but in no event later than the first day in which the contractor has workers employed upon the public work.

Section 1777.5 and the applicable regulations require the hiring of apprentices to perform one hour of work for every five hours of work performed by journeymen in the applicable craft or trade (unless the contractor is exempt, which is inapplicable to the facts of this case). In this regard, section 1777.5, subdivision (g) provides:

The ratio of work performed by apprentices to journeymen employed in a particular craft or trade on the public work may be no higher than the ratio stipulated in the apprenticeship standards under which the apprenticeship program operates where the contractor agrees to be bound by those standards, but, except as otherwise provided in this section, in no case shall the ratio be less than one hour of apprentice work for every five hours of journeyman work.

GFRCO Failed To Employ Laborer Apprentices and Operating Engineer Apprentices.

"Laborer" and "operating engineer" were the crafts at issue in the Determination. With respect to the 1:5 ratio of apprentice hours to journeyman hours, GFRCO employed neither laborer apprentices nor operating engineer apprentices on the Project. Accordingly, the record establishes that GFRCO violated Labor Code section 1777.5 and section 230.1.

There Was One Applicable Committee in the Geographic Area for Operating Engineer and Two Applicable Committees in the Geographic Area for Laborer.

Section 230, subdivision (n) defines "Geographic Areas of Operations" of an apprenticeship program to mean "the geographic area in which the program regularly operates and trains apprentices." Under Labor Code section 1777.7, subdivision(c)(2)(B) in effect at the time the Determination was issued by DLSE, the affected contractor shall have the burden of providing evidence of compliance with section 1777.5. Section 232.50 titled "Burdens of Proof on Wages and Penalties" provides:

(a) The Chief DAS has the burden of coming forward with evidence that the Affected Contractor, Subcontractor, or Responsible Officer (1) was served with a Determination of civil penalty or debarment in accordance with Rule 20 [Section 232.20]; (2) was provided a reasonable opportunity to review evidence to be utilized at the hearing in accordance with Rule 24 [Section 232.24]; (3) that such evidence provides prima facie support for the Determination of civil penalty or debarment; (4) where the civil penalty is set above zero, that the Chief DAS has considered all of the circumstances listed in Labor Code section 1777.7([); (5) where debarment is sought, that the violation is serious, and that the Chief DAS has considered all of the circumstances listed in Labor Code section 1777.7([); and, (6) where a Determination has issued against a prime contractor for the violations of a subcontractor, that the evidence provides prima facie support to show knowledge of the prime contractor or failure by the prime contractor to comply with requirements as listed under Labor Code section 1777.7(d).

As to the trade or craft of operating engineer, DLSE acknowledged that the only applicable committee in the geographic area of operation for the Project was the SCOE. As to the craft of laborer, DLSE contends that there were two applicable committees in the geographic area of the Project, the LSC JAC and the AGC-San Diego, while GRFCO argues that the LSC JAC was the only applicable committee. The dispute between the parties is over whether the AGC-San Diego was an applicable committee for laborer apprentices.

It is well established in public works that a contractor can determine which apprenticeship programs are approved in specific geographic location by searching the DIR's interactive database or contact the DAS District Office whose assigned geographic areas of responsibility cover the county or counties in which the public works project is located. GRFCO merely claims that it did not believe that the AGC-San Diego was an applicable committee in the Project's geographic area of operation. However, GRFCO offered no testimony or evidence that it could not have determined the appropriate applicable apprenticeship committees in the geographic area of the Project using either the DIR's interactive website or contacting the appropriate DAS office. In fact, GFRCO's Exhibit B, a printout from the DIR's interactive website showing that the AGC-San Diego was one of the applicable committees in the trade or craft of laborer, actually undercut GRFCO's argument that the AGC-San Diego was not in the geographic area of operation where the Project was located.

GRFCO further argued that the AGC-San Diego was not an applicable committee that provided training in the trade or craft of laborer. Specifically, it relied on Exhibit E, which is a printout from the AGC-San Diego's own website. 3 Among other things, Exhibit E indicates that the AGC-San Diego "is approved for the following occupations: carpenter, cement, mason, drywall finisher, drywall lather, heavy equipment operator, heavy equipment mechanic, painter, tile finisher, and tile setter." Laborer was not listed as an approved occupation. However, other exhibits, including GRFCO's own Exhibit B, do show that the AGC-San Diego was approved for laborer, at least before the commencement of work on the Project. While the parties could have obtained more persuasive evidence from DAS regarding the status of the AGC-San Diego in training apprentices in the trade or craft of laborer before the commencement of work on this Project, this was not done. The Hearing Officer, therefore, must weigh and determine, based on the evidence before him, which one is the most persuasive on this issue. While there is conflicting evidence as to whether the AGC-San Diego provided training in the trade or craft of laborer during the applicable period, the printout from DIR's interactive website indicating that the AGC-San Diego was an applicable program in the trade or craft of laborer as of September 24, 2013, is more persuasive than the AGC-San Diego's own private website.

GRFCO Failed To Properly Issue A Notice of Contract Award Information and Request The Dispatch Of Laborer Apprentices.

GRFOC acknowledged that it failed to provide a DAS 140 and a DAS 142 to the AGC-San Diego for the trade or craft of laborer. As to the LSC JAC for laborer, DLSE acknowledged that GRFCO's DAS 140 was timely sent but that GRFCO's DAS 142 was deficient because it listed the reporting date of an apprentice as July 27, 2014, which was after the Project had been completed. Likewise, as to the SCOE for the trade or craft of operating engineer, DLSE acknowledged that GRFCO's DAS 140 was timely sent but that its DAS 142 was also deficient because the listed reporting date for an apprentice was also July 27, 2014. Jackson testified that both the listed dates of July 27, 2014, were probably clerical errors and he attributed them to his assistant.

The Penalty for Noncompliance.

GRFCO "knowingly violated" the requirement of a 1:5 ratio of apprentice hours to journeyman hours for laborer apprentices, and the record establishes that this violation was "knowingly committed." Jackson testified that he was familiar with the requirement for use of apprentices on the Project, and familiar with the need to send contract award information, and to contact apprentice committees and request the dispatch of apprentices. Jackson also testified that regardless of GRFCO's prior requests for apprentices, none was ever sent because GRFCO was not a "union shop" and that none of the applicable programs would send apprentices to a non-union contractor.

GRFCO failed to meet its burden of proof by providing evidence of compliance with section 1777.5. In order to show that its failure to employee apprentices was due to circumstances beyond its control, GRFCO had to demonstrate that it properly provided contact award information and properly requested the dispatch of laborer apprentices from the two applicable committees in the trade or craft of laborer and from the one applicable committee in the trade or craft of operating engineer and that no apprentices were dispatched. Here, Jackson acknowledged in his testimony that GRFCO's DAS 142s sent to the applicable committees listed erroneous reporting dates. He also acknowledged that neither a DAS 140 nor a 142 was sent to the AGC-San Diego because GRFCO did not think the AGC-San Diego was in the Project's geographic area of operation for laborer apprentices. In fact, Jackson failed to offer any credible explanation for why GRFCO could not have determined that the AGC-San Diego was an applicable apprentice committee for the craft of laborers in the geographic area of the Project when its own Exhibit B demonstrated otherwise. Accordingly, GRFCO knowingly violated the law and a penalty should be imposed under section 1777.7.

In applying these factors, the Director concludes that a daily penalty of $60.00 is the appropriate penalty under Labor Code section 1777.7.

FINDINGS

1. There were two applicable apprenticeship committees in the geographic area of the Project in the craft of laborer: (1) the Laborers Southern California Joint Apprenticeship Committee; and, (2) the Associated General Contractors of America, San Diego Chapter.

2. There was one applicable apprenticeship committee in the geographic area of the Project in the craft of operating engineer: the Southern California Operating Engineers J.A.C.

3. GRFCO failed to properly submit contract award information to one of the applicable apprenticeship committees and failed to properly request dispatch of apprentices from two applicable apprenticeship committees in the geographic area of operation of the Project for the craft or trade of laborer, so it was not excused from the requirement to employ apprentices under Labor Code section 1777.7.

4. GRFCO failed to properly request dispatch of apprentices from one applicable apprenticeship committee in the geographic area of operation of the Project for the craft or trade of operating engineer, so it was not excused from the requirement to employ apprentices under Labor Code section 1777.7.

5. GRFCO failed to employ both laborer apprentices and operating engineer apprentices on the Project in the minimum ration required by Labor Code section 1777.5 (20% of the journeyman hours employed).

6. Under Labor Code section 1777.7, a penalty is assessed upon affected contractor GRFCO, Inc. in the amount of$60.00, computed as $60.00 per day for the 143 days that journeymen laborers and journeymen operating engineer worked on the Project for a total of $8,580.00.

ORDER

The Determination of Civil Penalty is affirmed and modified as set forth in the above Findings. The Hearing Officer shall issue a Notice of Findings and appeal rights which shall be served with this Decision on the parties.


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