DIR $8,700 Fine - Submitting DAS 142 to Wrong Apprentice Committee

Read the entire DIR Civil Wage Assessment against Ro's Precise Painting, Inc. 8/24/17 here.

Affected subcontractor, Ro's Precise Painting, Inc. (Ro's), submitted a timely request for review of a Civil Wage and Penalty Assessment (Assessment) issued by the Division of Labor Standards Enforcement (DSLE) on August 31, 2016, with respect to construction work performed for awarding body Visalia Unified School District on RHS 2-Story Classroom Addition (Project) located in Tulare County. The Assessment determined that Ro's owed $8,700.00 in penalties under Labor Code section 1777.7. Ro's timely filed its Request for Review of the Assessment on or about September 23, 2016.

In this decision, the Director finds that Ro's failed to request dispatch of painter apprentices from the appropriate apprenticeship committee and did not meet the required ratio of apprentices to journeymen workers required by Labor Code section 1777.5. Ro's is subject to penalties pursuant to Labor Code section 1777.7 although not in the amount found in the Assessment. Therefore, the Director of Industrial Relations issues this Decision affirming the Assessment, as modified.

SUMMARY OF FACTS

On July 8, 2014, awarding body Visalia Unified School District executed a contract with prime contractor Seals/Biehle, Inc. (Seals/Biehle) for the Project. On July 14, 2014, Seals/Biehle executed a subcontract with Ro's to perform painting services. Ro's began work on the Project during the week of April 11, 2015. Between the weeks of April 18, 2015, and May 30, 2015, no work was accomplished but work resumed during the week of June 6, 2015. From the week of June 6, 2015, through the week of August 8, 2015, work continued. The Notice of Completion is dated August 18, 2015, and was recorded by Tulare County on August 21, 2015. Apprentices worked on the Project during the weeks of April 11, 2015, July 18, 2015, July 25, 2015, and August 1, 2015.

On or about August 4, 2014, Ro's sent a Division of Apprenticeship Standards (DAS) Public Works Contract Award Information form (DAS Form 140) to Associated Builders and Contractors (ABC) indicating that it executed a contract on July 14, 2014, for a Project to begin in August of 2014, and that the Project will require an estimated 381 journeyman hours and 76 hours of painter apprentice time. The first box on the bottom of the DAS Form 140 was checked, indicating: "We are already approved to train apprentices by the Associated Builders and Contractors Apprenticeship Committee. We will employ and train under their Standards." On or about July 8, 2015, Ro's sent a DAS Form 140 to District Council 16 Drywall Finisher Joint Apprenticeship Training Committee (Drywall J.A.T.C.) indicating much of the same information provided to ABC except that the commencement date for the Project is July 2015 instead of July 14, 2014. In this instance, the third box on the bottom of the DAS Form 140 was selected, indicating that Ro's would be willing to train apprentices in accordance with California Apprenticeship Council regulations.

When Ro's queried the Internet website of the Department of Industrial Relations (Department), the following three painting apprenticeship programs within the geographic region of Project appeared: (1) Drywall J.A.T.C., (2) Painters & Decorating J.A.T.C. of the Bay Area Inc. (Painters & Decorating J.A.T.C.), and (3) Traffic Control Painter Automotive Marine & Specialty Painters Local #1175 (Traffic Control Painter Committee). All three committees have the same address posted on the Department's website: 2020 Williams Street, Suite A, San Leandro, CA 94577, the same telephone number, and the same contact person, Alex Beltran, Director of Training. Two of the three committees had the same email address with the Traffic Control Painter Committee having a unique email address. ABC is not listed on the Department's website as an approved apprenticeship program for Tulare County.

Ro's sent two Requests for Dispatch of Apprentice, DAS Form 142s, to two different apprenticeship committees. The first was sent on April 15, 2015, to "ABC Northern California Chapter." This DAS Form 142 specifies "use of current apprentice" where the number of apprentices is ordinarily placed on the form and requests that the dispatched apprentice report to work on April 20, 2015. On or about July 8, 2015, Ro's submitted another DAS Form 142 to Drywall J.A.T.C., indicating that one apprentice was needed commencing July 13, 2015. No apprentices were dispatched by any of the three identified apprenticeship committees.

Ro's employed journeymen painters during the Project for a total of 387.5 hours over 30 days 3 between April 10 and August 5, 2015. Ro's employed apprentices for seven days during the Project for 46 hours. Garza testified at hearing that she did not intend to send the DAS Form 142 to Drywall J.A.T.C., but instead intended to send it to Painters & Decorating J.A.T.C. who clearly dispatches painters. Garza stated that in the past when an error like this occurred she was notified by Drywall J.A.T.C. of the error and instructed to refile the DAS Form 142 identifying the correct apprenticeship committee. In this case Garza was not notified about the error. Garza also stated that at the time the Project was ongoing, Ro's was engaged in 30 public works jobs.

DLSE has cited Ro's for prior apprentice violations. All of the alleged prior violations involving Ro's were settled informally by the parties without a request for review and related decision of the Director.

DISCUSSION

Section 1777.5, subdivision (e) states that "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." Section 230, subdivision (a) requires contractors that are not approved to train apprentices by an apprenticeship program sponsor to also submit contract award information to all applicable apprenticeship committees in the geographical area that includes the public works. Section 230, subdivision (a) additionally specifies that contractors must submit the DAS Form 140 to applicable apprenticeship committees "within 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."

Ro's Did Not Timely Provide Contract Award Information to Applicable Apprenticeship Committees.

The contract information notice is due within ten days from the execution of the subcontract, "but in no event later than the first day in which the contractor has workers employed upon the public work." (§ 230, subd. (a).) Ro's executed the subcontract with Seals/Biehle on July 14, 2014. Ro's employees began Project on April 10, 2015. The DAS Form 140 sent to ABC on August 4, 2014, was not sent within the ten-day period. Additionally, the August 4, 2014, DAS Form 140 sent to ABC is irrelevant because it was not sent to one of the three identified committees providing painter apprentices within the Tulare area.

Nor was the second DAS Form 140 sent in compliance with the regulation. The Project began during the week ending April 10, 2015. Ro's did not send the DAS Form 140 to the Drywall J.A.T.C. until July 8, 2015. Therefore this DAS Form 140 is also untimely.

Ro's Did Not Request Dispatch Of Painter Apprentices From The Applicable Apprenticeship Committee.

Section 1777.5 and the applicable regulations require a contractor and subcontractor to employ 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).

... [R]equest the dispatch of required apprentices from the apprenticeship committees providing training in the applicable craft or trade and whose geographic area of operation includes the site of the public work by giving the committee written notice of at least 72 hours (excluding Saturdays, Sundays, and holidays) before the date on which one or more apprentices are required. If the apprenticeship committee from which apprentice dispatch(es) are requested does not dispatch apprentices as requested, the contractor must request apprentice dispatch(es) from another committee providing training in the applicable craft or trade in the geographic area of the site of the public work, and must request apprentice dispatch(es) from each such committee, either consecutively or simultaneously, until the contractor has requested apprentice dispatches from each such committee in the geographic area. All requests for dispatch of apprentices shall be in writing, sent by first class mail, facsimile or email.

Garza testified that she queried the Department website for the County of Tulare to identify the apprenticeship committees that dispatched painter apprentices. Three apprenticeship committees resulted from Garza's query: (l) Drywall J.A.T.C., (2) Painters & Decorating J.A.T.C., and (3) Traffic Control Painter Committee.

On the DIR website, each of the queried apprenticeship committees are hyperlinked so that when a user clicks on one of the three committees they are taken to a page that displays more information about that committee. Exhibit J contains extended information for each of the three committees resulting from Ro's inquiry. Only one of the three apprenticeship committees, Painters & Decorating J.A.T.C., clearly dispatches painters. After the heading, "Trade or occupation" for that committee, "painter" is listed. The other two apprenticeship committees identified in Garza's Internet query did not show that they dispatched painters. Instead, the Drywall J.A.T.C. lists a trade or occupation of "Drywall Finisher," and the Traffic Control Painter committee lists "Traffic Control Painter" as the trade or occupation.

Garza testified that on July 8, 2015, she emailed a DAS Form 142 (Exhibit 8) to Drywall J.A.T.C. requesting one painter apprentice to commence work on July 13, 2015. Garza also noted in her testimony that all of the three apprenticeship committees have identical contact information including the same contact person, telephone number, mailing address and email address with the exception of the Traffic Control Painter Committee that posted a unique email address.

Ro's contends that it is unnecessary to send a DAS Form 142 to all of the committees listed on the Department's website when they share the same contact information: that sending a request for the dispatch of apprentices to one is the same as sending the request to all of the committees. That contention is rejected. Each of the committees, as the links on the Department's website show, provided apprentices in different crafts. The applicable craft in this case is painter and only the Painters & Decorating J.A.T.C. could respond to a dispatch request for a painter apprentice. (See § 230.l, subd. (a), dispatch request must be for a "required apprentice from the apprenticeship committees providing training in the applicable craft or trade .... ") Garza sent the DAS Form 142 to the committee dispatching drywall finishers although she intended, but failed, to request painters from the only committee that clearly dispatched them. Hence, Ro's did not request dispatch of painter apprentices from the only applicable apprenticeship committee in the geographical region that includes the site of the public work, in violation of section 230.1, subdivision (a).

Ro's Did Not Employ Apprentices in the Correct Ratio.

As stated above, section 1777.5 and the applicable regulations require contractors and subcontractors to employ apprentices in a craft or trade at a ratio of one hour of work by apprentices for every five hours of work by journeymen. 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.

Ro's Is Liable For Payment Of Penalties:

In the Assessment, Ro's was determined to be in violation of section 1777.5 for 29 days and was assessed a penalty of $300.00 per day for a total penalty amount of $8,700.00.

DLSE calculated the total number of days that journeymen were performing work on the Project and then assessed a penalty for each of those days (Exhibit 5, page 6). When considering the data used to calculate the penalty (Exhibit 10), it is clear that journeymen were on the job 30 days instead of 29 days. The Assessment of penalties under section 1777.7, however, will not be increased accordingly, because a de novo review of the rate, see infra, requires a reduction of the penalty amount, as follows.

The Assessment calculates penalties at $300.00 a day for each day of noncompliance. DLSE provided evidence of four instances (Exhibit 5, pages 6 and 7) where Ro's had been cited for section 1777.5 violations purportedly within the past three years. Employing the above-stated factors in a de novo review, it is found that a mitigated penalty rate should apply.

On July 22, 2015, during a time-period that apprentices were actually employed on the Project and 14 days after the DAS Form 142 was submitted to Drywall J.A.T.C., Ro's employee Garza emailed Jamie Calderon at that committee to inquire why no apprentices had been dispatched (Exhibit L). Garza started her inquiry by stating, "I emailed you DAS 140 and 142 forms for some projects on 07/07/2015, however, no apprentices have been dispatched." Calderon responded on the same day stating that the dispatching of apprentices is done by local unions under Drywall J.A.T.C. and that "There may have not had any available apprentices for the project." The DAS Form 142 related to the Project was dated July 8, 2015. Garza testified at hearing that Ro's at the time of the Project was working on 30 public works projects. Waiting for 14 days to inquire why apprentices were not dispatched and emailing an inquiry about the dispatching of apprentices that do not clearly and specifically relate to Project are both reasons why factor "C" supports a $100.00 penalty rate.

The total penalty calculated at $75.00 for each full day of noncompliance of 30 days is $2,250.00.

Ro's contends that pursuant to section 230.1, subdivision (a) it is excused from failing to employ apprentices for 20 percent of the hours journeymen are employed on a public work. Section 230.1, subdivision (a) provides:

Contractors who are not already employing sufficient registered apprentices (as defined by Labor Code Section 3077) to comply with the one-to-five ratio must request the dispatch of required apprentices from the apprenticeship committees providing training in. the applicable craft or trade and whose geographic area of operation includes the site of the public work by giving the committee written notice of at least 72 hours (excluding Saturdays, Sundays and holidays) before the date on which one or more apprentices are required.

Conversely, if in response to a written request no apprenticeship committee dispatches, or agrees to dispatch during the period of the public works project any apprentice to a contractor who has agreed to employ and train apprentices in accordance with either the apprenticeship committee's standards or these regulations within 72 hours of such request (excluding Saturdays, Sundays and holidays) 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.

As stated above, on July 8, 2015, Ro's transmitted a DAS Form 142 to Drywall J.A.T.C. requesting a painter apprentice to commence work on July 13, 2015. Also as discussed above, Ro's contacted the incorrect apprenticeship committee for the dispatch of painters. Ro's contends that sending a request for the dispatch of apprentices to one apprenticeship committee is the same as sending a request to all committees because the contact information for each is essentially the same.

Inconsistently, Ro's concedes that transmitting a request for apprentices should be made to the one apprenticeship committee that clearly dispatches painters. Ro's, however, requested an apprentice dispatch from the very committee that it claims was inappropriate to dispatch painters, the Drywall J.A.T.C. Thus, without a clearly appropriate dispatch request, there can be no defense pursuant to section 230.1, subdivision (a). 12

Ro's Should Not Be Relieved From The Penalties Assessed.

Ro's contends that it should be relieved of all penalties because it acted in good faith, was not grossly negligent, willful or engaged in fraud. Support for this contention is found in Lusardi Construction Company v. Aubry (1992) 1 Cal.4th 976, 997 (Lusardi), which states that "courts refuse to impose civil penalties against a party who acted with good faith and reasonable belief in the legality of his or her actions." In Lusardi, a contractor had to pay the difference between wages paid and the prevailing wage, but not the associated penalties because it acted in good faith when contracting with the awarding body, a hospital district, who erroneously represented to the contractor that the project was private and not public work. (Id., at p. 996.) Here, Ro's had extensive experience in public work, having as many as 30 public works projects ongoing simultaneously. No evidence shows Ro's was unaware that the Project was for public work, or that it relied on a representation by the awarding body that the Project was not a public work.

Therefore, the situation here stands in contrast to that present in Lusardi. Further, as addressed above, Ro's is irrebuttably presumed to have known that it violated section 1777.5 by failing to correctly contact the applicable apprenticeship committees for the dispatch of apprentices. Not only is there no basis for equitable estoppel that would prevent the imposition of penalties, as was the case in Lusardi, there is a finding that Ro's knowingly violated the law. A knowing violation cannot be in good faith; therefore, the penalty relief sought by Ro's is unavailable.

FINDINGS

1. Ro's did not provide contract award information to applicable apprenticeship committees as required by Labor Code section 1777.5 and section 230, subdivision (a).

2. Ro's did not request dispatch of painter apprentices from the applicable apprenticeship committee in geographical region where the public work is located in contravention of Labor Code section 1777.5 and section 230.1, subdivision (a) of title 8, California Code of Regulations.

3. Ro's did not employ apprentices in the ratio of one apprentice hour for each five journeymen hours as required by Labor Code section 1777.5, subdivision (k).

4. DLSE did not prove that Ro's had prior violations within a three-year period. Ro's cannot be penalized at the maximum rate of $300.00 for each day in violation as DLSE contends, but instead is subject to a penalty of $75.00 for each day in violation pursuant to Labor Code section 1777.7, subdivision (a). The total penalty is $2,250.00 for 30 days in violation of Labor Code section 1777.5.

5. Ro's penalties are not relieved pursuant to section 230.1, subdivision (a) since it did not request apprentices from the correct apprenticeship committee.

6. The Division of Labor Standards Enforcement Public Works Manual does not create an affirmative defense available to Ro's because it is for instructional purposes and cannot supplant court precedent, the California Labor Code and the California Code of Regulations, title 8.

7. Ro's cannot be relieved of penalties because as an entity who knowingly engaged in a violation of Labor Code section 1777.5, it cannot claim to have acted in good faith.


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