News|December 20, 2021

New Laws Going into Effect on January 1, 2022

As 2021 comes to a close, highlighted below are several significant legislative measures that were passed this year and will go into effect on January 1, 2022.

AB 332 (Committee on Environmental Safety and Toxic Materials) Hazardous waste: treated wood waste: management standards. 

This measure gives the Department of Toxic Substances (DTSC) Control until July 1, 2028, to present a plan to the Legislature on its update for the future disposal of Treated Wood Waste (TWW). This extension was necessary for the construction industry as the State was unprepared to limit the disposal of TWW to hazardous waste only facilities as was intended after December 31, 2020. As such, TWW will again be accepted in previously approved waste facilities.

AB 830 (Flora) Business: Department of Consumer Affairs: licensed professions and vocations. 

This measure will clarify that a Responsible Managing Employee on a contractor license can accomplish the requirement to supervise and control on construction projects either directly or indirectly by supervising a designated employee. This measure was introduced in response to issues raised in the McCosker vs. CA Department of Water Resources.

AB 1023 (Flora) Contractors and subcontractors: records: penalties. 

This bill will require that a contractor or subcontractor furnish specified payroll records at least once every 30 days while work is being performed on the project and within 30 days after the final day of work performed on the project. These records will now be required to be submitted in an electronic format. Contractors or subcontractors who fail to furnish those records relating to their employees in the manner specified will be liable for a penalty of $100 per day, not to exceed $5,000 per project.

SB 607 (Min) Business and professions. 

This bill revises the Contractors State License Board (CSLB) board’s authority to set fees by regulation and would increase various fee amounts. In connection with initial license fees and renewal fees for active and inactive licenses, the bill would differentiate between an individual owner as opposed to a partnership, corporation, limited liability company, or joint venture, and would authorize higher fees for the latter categories of licensees. Additionally, the bill requires that a contractor’s bond now be $25,000 instead of $15,000 beginning in 2023.

SB 727 (Leyva) Labor-related liabilities: direct contractor. 

This law expands current liability that requires direct contractor to make the employees of their subcontractor whole for nonpayment of wages and fringe benefits to also include penalties and liquidated damages.

The construction industry was able to get safe harbor language inserted that exempts the direct contractor’s liability from penalties & liquidated damages if the direct contractor: 1) Monitors payment of subcontractor wages by periodic review of payroll records, 2) Upon becoming aware of a failure to pay wages, the contractor must take corrective action, including withholding payments from the subcontractor, and 3) Prior to making final payment to the subcontractor, the direct contractor must obtain an affidavit from the subcontractor affirming that all workers have been properly paid.

SB 606 (Gonzalez) Workplace safety: violations of statutes: enterprise-wide violations: egregious violations. 

This bill creates two new Cal/OSHA violations: the enterprise-wide violation and the egregious violations. This bill creates a rebuttable presumption that a violation committed by an employer with multiple worksites has committed an enterprise-wide violation if:

1) The employer’s written policy or procedure violates Cal OSHA regulations; or

2) Cal/OSHA has evidence of a pattern or practice of the same violation committed by the employer at one or more of its worksites. If the employer is unable to rebut the presumption, Cal/OSHA may issue an enterprise-wide citation requiring enterprise-wide abatement, which includes penalties up to a maximum of $124,709 per violation.

The bill also creates a new “egregious violation” category which means a willful violation that meets one of seven specified conditions outlined in the bill. If an egregious violation exists, it can be multiplied by the number of employees exposed to such violation.

The construction industry was able to have language added to limit the number of additional exposed employees from being included on a prequalification questionnaire. Language was added in the enterprise-wide violation section to ensure that the employer being held responsible was the actual employer. So, the General Contractor will not be held responsible for a violation by a subcontractor.

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