MINUTES OF THE meeting
of the
ASSEMBLY SUBCommittee on Commerce and Labor
Seventy-Second Session
March 17, 2003
The Subcommittee on Commerce and Laborwas called to order at 4:01p.m., on Monday, March 17, 2003. Chairman John Oceguera presided in Room 4100 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. John Oceguera, Chairman
Mr. Bob Beers
Mr. David Parks
COMMITTEE MEMBERS ABSENT:
None
GUEST LEGISLATORS PRESENT:
None
STAFF MEMBERS PRESENT:
Vance Hughey, Committee Policy Analyst
Wil Keane, Committee Counsel
Patricia Blackburn, Committee Secretary
OTHERS PRESENT:
Richard Daly, Business Manager, Laborers Local Union 169
Terry Johnson, State Labor Commissioner, State of Nevada
Steve Michicka, Southwest Regional Council of Carpenters
Danny Thompson, Executive Secretary/Treasurer, Nevada State AFL-CIO
Jeanette Belz, Legislative Advocate, Associated General Contractors, Nevada Chapter
Garth Sevdalis, citizen
Chairman John Oceguera called the Subcommittee meeting to order at 4:01 p.m., noting all members of the Subcommittee were present; he opened the hearing on A.B. 141. Chairman Oceguera stated he would like to be informal in an effort to determine the differences between the opponents and proponents.
Assembly Bill 141: Makes various changes concerning enforcement of provisions requiring payment of prevailing rate of wages on public works. (BDR 28-464)
Richard Daly, Business Manager of Laborers Union Local 169, explained the large differences between the Labor Commissioner and himself. He stated he had amendments to A.B. 141, which were distributed to the Subcommittee members (Exhibit C). He explained he was opposed to everything the Labor Commissioner had in his bill, except for extending the 10-day time period to 15 days. Mr. Daly suggested the following amendment to Section 2 of the Nevada Revised Statutes (NRS) 338.030: the addition of "and labor organizations that represent the employees," "private and public nonresidential construction". . ."on projects where the total value of the construction is $100,000 or more" and "Residential construction shall mean construction inside the property line of single-family residences and multi-family residences under four stories."
Mr. Daly's amendment to Section 3 would add a paragraph (c) to spell out more clearly what the legislative intent was. This new paragraph would be "(c) Evidence to 'substantiate' or 'information' as used in this section must be liberally construed when the Labor Commissioner receives an objection or information pursuant to subsection 2 so that any disputed determination will be decided based on the evidence presented at the hearing." Mr. Daly indicated his lack of an opportunity for a hearing after a dispute a few years ago.
Chairman Oceguera asked the Labor Commissioner to join Mr. Daly at the witness table. Mr. Oceguera asked them to negotiate.
Terry Johnson, State Labor Commissioner, state of Nevada, explained to the Subcommittee that he had taken a different approach. He had looked at A.B. 141 and at some of the items that caused concern in an effort to work with those opposed to this bill. One of the points of contention, Mr. Johnson noted, on page 2, line 17 of the bill, had been a proposed change of the word "support" to "substantiate." In consideration of the comments that had been made at the Committee meeting of March 12, 2003, and in light of the fact that the Commissioner's office had been able to withstand legal challenges based on the law as it was currently written, they would have no objection to leaving the wording as it was currently written. That was the only point that he could offer, and he had drafted an amendment (Exhibit D), which was distributed to the Subcommittee members.
Mr. Johnson stated he had just received a copy of Mr. Daly's amendment and felt it went much further than what had been contemplated or discussed at the March 12, 2003, meeting. He would prefer, and would stipulate to, just leaving the language as it was currently written.
Chairman Oceguera stated that this dialogue seemed like a good start but Mr. Daly stated that he wished to speak to the other provisions of his amendment. He explained that the Labor Commissioner already surveyed for private and public non-residential construction and he felt it should be in the statute. Also, he believed the dollar value of the construction language would be helpful in this statute. He also noted they had added an "inside the property line" provision. On his paragraph (c) addition, Mr. Daly again spoke of his experience in being denied a hearing even though he had brought forth information he felt supported a hearing. The law was clear, Mr. Daly explained; it stated "shall have a hearing" and the Labor Commissioner decided not to have one. Although, he admitted, he had gone forward with judicial review, he had no judicial review of the evidence he had presented. The only matter that had been heard was whether or not he should get a hearing. The additional language he requested in his amendment would strengthen the fact that in those situations there was a need for a hearing. There were, in his opinion, limitations put into the law that said the Labor Commissioner could only have one hearing per craft, per county, per year. He stated again he wanted that language inserted so that determinations could be based on the information at the hearing.
Chairman Oceguera stated he believed Mr. Daly had made his point. He asked Mr. Johnson to respond as to the background and tell the Subcommittee approximately how many disputes were heard and how many were not heard.
Mr. Johnson stated that generally when the Labor Commissioner's office published the wage determinations for prevailing wage rates on October 1, there was a 30-day period in which objections could be filed. If there was an objection that supported or substantiated a different wage, the Commissioner's office did one of two things: they examined the information and changed the rate right then and issued an amendment or they would schedule the matter for hearing. Then they continued on the administrative hearing track. In the case Mr. Daly was citing, the information submitted, in his view, had not supported or substantiated a different wage, and he mentioned that an objective "set of eyes," by way of the District Court, had looked at it and agreed with Mr. Johnson's decision. He reiterated that the Commissioner's office had complied with the law as it had been written and would accept keeping the language unchanged. Mr. Johnson stated he did not see the need for the amendments submitted by Mr. Daly, which went beyond the scope of A.B. 141.
Chairman Oceguera asked for clarification from Mr. Johnson that if the Labor Commissioner did not find a need for a hearing, there was still the opportunity for judicial review. Mr. Johnson stated that legally they could petition the court for judicial review of that final decision. In Mr. Daly's case, he pursued a separate course. They filed a petition for a writ of mandamus to mandate that the Labor Commissioner hold a hearing and the court look at the evidence. They agreed with the Labor Commissioner that the evidence did not support or substantiate a different rate and had affirmed his decision. Mr. Johnson stated his department felt they had done the right thing. The parties had the opportunity to appeal it to an independent third party, in this case the District Court, and the Labor Commissioner's office was confident that their interpretation and application of the law had been correct. Mr. Johnson reiterated that they were willing to let the current language of the law stand and saw no need for further amendments.
Assemblyman Beers stated that the expansion of those surveyed in determining prevailing wage appeared to be a big change from the original bill that had been heard. He wondered if it were not "off topic" from the direction of the original bill.
Mr. Daly explained that for many years prior to Mr. Johnson's administration, the labor organizations were surveyed at the same time and in the same manner as the contractors. Mr. Johnson read the law literally and had stopped that practice. His amendment, Mr. Daly explained, would merely reinstitute what had been the practice for 20 or 25 years prior to when Mr. Johnson became the Labor Commissioner. He stated that if that would be a problem, it could be left out. They still had a process, but he preferred that his amendment be left in.
Mr. Daly asked Chairman Oceguera if he could respond to the testimony of Mr. Johnson. Mr. Johnson had testified, in answer to questions, that when he received an objection, he did one of two things. His explanation, Mr. Daly continued, gave a third option. He had stated that the first thing the Labor Commission would do would be to look at the information and if it were supported, he would make the change right then, and there would be no need for a hearing. Secondly, he would schedule the matter for a hearing, or, thirdly, which Mr. Daly stated had been done in his case, they would look at the information and decide it did not support the objection and no hearing would be allowed.
Assemblyman Beers stated that Mr. Daly had been at the regular Committee meeting when A. B. 141 had been discussed. A much smaller change had been discussed than Mr. Daly's amendment and Mr. Johnson had explained how much more work that smaller change would have been. This amendment, Mr. Beers explained, went beyond what he was comfortable with in a subcommittee environment; he thought the full Committee should hear it. Mr. Beers stated that Lori Ashton, representative of the Southwest Regional Council of Carpenters, had suggested changing to a biannual prevailing wage survey rather than the annual survey, which should save money.
Steve Michicka, Southwest Regional Council of Carpenters, spoke on behalf of Lori Ashton. He addressed the change to biannual versus the annual prevailing wage survey. Biannual surveys would afford the Labor Commissioner a reasonable time frame to survey and implement prevailing wage and improve the system. Mr. Michicka thought that change would be cost-efficient. The survey currently, he explained, was conducted from July 1 through June 30 of each year and must be submitted by July 1. This left the contractors scrambling to complete the last month of the survey and then, in return, Mr. Johnson and his staff had 90 days to compile that information. One of the objectives of this legislative session, Mr. Michicka continued, was an attempt to get more response from the contractors. If every contractor actually submitted information, there would not, he believed, be enough resources for the Labor Commissioner to accomplish that task.
Mr. Johnson stated that, with regard to the biannual survey, his office had proposed that change last session. Their suggestion had been to do the survey every other year, but still do the determination of the wages annually. Mr. Johnson thought Mr. Daly had some opposition to that proposal and his office decided it was not worth the fight. He had no objection, Mr. Johnson stated, to a biannual survey.
Assemblyman Beers remarked that there appeared to be some agreement. He asked Mr. Michicka if he could distribute copies of Lori Ashton's letter of March 14, 2003 (Exhibit E). Mr. Michicka stated he would provide those copies.
Assemblyman Parks stated he was unclear about subsection (c). He stated he thought he knew the intent.
Danny Thompson, Executive Secretary/Treasurer, Nevada State AFL-CIO and representing building trades in general, stated that because Jack Jeffrey, Legislative Advocate for the Southern Nevada Building and Construction Trades Council was not present, he would address the biannual surveys. He stated he was not opposed to that, but it was a big step. He would need time to confer with others.
Chairman Oceguera asked if Mr. Thompson could help negotiate a settlement between the parties. He asked the Subcommittee to move on to other matters to find some common ground.
Mr. Johnson stated that the only agreement that had been reached was to rescind the amendment to change "support" to "substantiate." To refresh memories, Mr. Johnson explained, there had been some concern regarding whether or not the Labor Commissioner could take official notice of matters in the conduct of administrative hearings. Their position was that the trier of fact in an administrative setting could take official notice of matters. He did not see the need to find alternative language. Mr. Johnson stated he had made a good faith effort to address the concerns that had been presented.
Mr. Daly stated he was opposed to that language. In answer to Assemblyman Parks' concerns regarding the clarity of his amendment, Mr. Daly stated, the language used in the construction of the amendment were his thoughts and he would agree to any bill drafting corrections, as long as the intent remained.
Chairman Oceguera wanted to clarify where the parties now stood. The most important issue, he said, was to change "support" to "substantiate." Mr. Johnson asked if Mr. Daly would state whether he was in support of his amendment or in support of leaving the statute as it was now written. Mr. Daly stated he supported his amendment.
Chairman Oceguera noted the second issue would be biannual versus annual surveys, which had not been discussed with the majority of the labor organizations, so they were unsure of the support. The third issue, Chairman Oceguera stated, was the taking of official notice. He asked if there was any agreement there.
Mr. Michicka stated they were adamantly opposed to the change in official notice language. Part of their concern, Mr. Michicka noted, was that the Labor Commissioner might move towards circumventing the process that was in place. He felt this would give the Labor Commissioner the ability to use records not open to the public and not currently used in determinations of prevailing wages. The Carpenters Union had not been consulted regarding this wording, and they proposed that the existing language in the statute remain and use the interim between this session and the next session to reach consensus.
Chairman Oceguera hoped Vance Hughey, Committee Policy Analyst, would be able to discern who wanted what so that it could be written down for all to see. It appeared that there were many issues. He had hoped the opponents and proponents would be a little closer.
Jeanette Belz, Legislative Advocate, Associated General Contractors (AGC), Nevada Chapter, stated she had no amendment to distribute. She stated she had copies of NRS 338.060 (Exhibit F), which were distributed to the Subcommittee members. She testified concerning the forfeitures that the contractors paid when they had not paid their workers the appropriate wage. Section 3 suggested that the penalty being imposed pursuant to this section included the cost of the proceedings. Along with the costs of the proceedings, the language suggested including investigative costs and attorney fees, and the Labor Commissioner would then recover those penalties. Ms. Belz stated the suggestion of the AGC was to have the penalty itself be credited to the construction education account rather than the Labor Commissioner's account. That education account had been created pursuant to NRS 624.580. The reasoning was that it would improve the industry and, in addition, would create the proper incentives for the Labor Commissioner to be doing what he was doing and not just pursuing contractors in order to obtain those penalties.
Mr. Johnson stated he had no advance notice of this amendment. He wanted to dispel the impression that his office pursued investigations or cases on the basis of recovering investigative costs. That was not, Mr. Johnson stated, how the Labor Commissioner's office did business. He explained that he did not recall ever having imposed an administrative fine to recover investigative costs. Mr. Johnson noted he did not see the need for the amendment. The system, he stated, worked fine as it stood.
Chairman Oceguera stated he understood Ms. Belz's argument that it might induce the Labor Commissioner to pursue those fees if they went to his agency's account, but the Subcommittee would note that he was opposed to that amendment. Ms. Belz stated she would provide a better-written amendment. Mr. Johnson explained that he had spoken to Ms. Belz and they had discussed building a consensus on the forfeitures that were under NRS 338.060. He understood that they went to the awarding bodies, not the Labor Commissioner. There would, he explained, be enough funds to cover enforcement by the awarding bodies for those provisions, and then any additional funds would go to the Education Fund.
Chairman Oceguera stated there were now four issues with A.B. 141. He asked if there were more questions from the Subcommittee members. There were none. He observed there would be no agreement today on this bill and he explained they would schedule another meeting and give the affected parties more time to work together. He closed the hearing on A.B. 141.
Chairman Oceguera opened the hearing on A.B. 143.
Assembly Bill 143: Makes various changes to labor laws and powers and duties of Labor Commissioner. (BDR 53-465)
Mr. Johnson explained to the Subcommittee that he had taken the same approach to A.B. 143 as he had with A.B. 141. After having heard the comments that had been made in the full Committee hearing, he offered an amendment in order to reach agreement (Exhibit G). He stated he would prefer the wording to state, "the Labor Commissioner will give that person an opportunity for a hearing before he can enforce" as opposed to "may impose."
Chairman Oceguera stated he was unable to find that amendment. A copy was obtained for the Chairman.
Mr. Johnson said his office had prepared this proposed amendment to A.B. 143. It addressed the concerns that had been raised in the previous meeting. On page 2, line 41, the amendment would delete "may impose" and insert "can enforce." Mr. Johnson made it clear that person would still have the opportunity for a hearing. The current process, Mr. Johnson stated, was that when his office received a complaint, they investigated it, they determined if there was any relief to be granted or any back wages due, and then, based on what was already written in the law, they determined what the penalty would be, whether it was on public works or private employment cases. Any penalty would correspond to the violation. Staff then would serve that determination upon the respondent, who could either agree or, if they objected, there were administrative regulations governing both private and public works employment. That would guarantee them the right of an administrative hearing in the event they had been assessed a penalty and wished to object to the imposition of that penalty.
Item 2 referenced page 5, line 30. This proposed amendment was based on comments Assemblyman Beers had made, with regard to clarifying what would constitute a reasonable time. They proposed the deletion of "within a reasonable time" and the insertion of "not fewer than 7 days."
Item 3, Mr. Johnson continued, referenced page 5, line 33. This proposed amendment would delete "and" and insert the word "or."
Item 4, page 5, line 34, "clarified" by deleting "any other" and inserting the word "the."
Mr. Johnson believed that those changes addressed all the concerns that had been brought up in the full Committee meeting.
Chairman Oceguera asked for questions and comments.
Steve Michicka, Southwest Regional Council of Carpenters, stated Mr. Johnson might have addressed his concerns by replacing "and" with "or" in Section 7, subsection 3(a) and (b). Mr. Michicka also wished to amend NRS 338.020, which was the prevailing wage statute. He explained that "any person violating" was deleted in the first part of the bill. Basically, he stated, if there was a violation, it then became a misdemeanor. He asked the Subcommittee if he had confused everyone.
Chairman Oceguera asked if the amendment from Lori Ashton deleted that part. Mr. Michicka asked which part and Chairman Oceguera stated, "any person violating the provisions of this section shall be guilty of a misdemeanor." Mr. Michicka stated that there was an additional number 4. He stated it had been deleted in the first instance, but this would put that wording back in. Chairman Oceguera stated he still did not understand.
Mr. Johnson stated he might be able to help. He noted that he had not seen what Mr. Michicka referred to. Mr. Johnson believed he had referred to page 5, line 26 where it stated, "any persons violating the provisions of this section shall be guilty of a misdemeanor." He assumed Mr. Michicka had expressed concern as to that language being proposed for deletion. However, Mr. Johnson continued, if one looked at page 6, Section 9, there was language that said "any person who violates any provision of NRS 608.005 to 608.195," which would encompass the section that had been deleted.
Chairman Oceguera stated it was covered and there was no problem. Wil Keane, Legal Counsel, was consulted and he nodded agreement. Mr. Michicka stated they were in agreement with everything else.
Chairman Oceguera asked if anyone else wished to speak on A.B. 143, and no one did. He stated his belief that those amendments would be workable.
Vance Hughey, Legislative Counsel Bureau, Research Division, stated he was looking at the proposed amendment that would add a new subsection (c) to Section 7, and was unsure if that was still on the table. Mr. Johnson stated his proposed amendments to A.B. 143 encompassed the bulk of the opponents' concerns with regards to that section. He said Ms. Ashton had spoken with him about that and it had been discussed briefly during the full Committee hearing. He thought Assemblyman Brown had asked if that would affect the prevailing wage statutes and, on the record, Mr. Johnson had stated that there was a generic provision in Chapter 608 that would be superseded by the specific provisions of Chapter 338 that said one must pay workers based on the type of work they actually performed. From their enforcement perspective, they would not try to enforce both of those statutes. NRS 608 was a generic statute that mostly dealt with private employment. NRS 338 had some specific regulations and specific statutory language. He did not believe it was a cause of concern.
Chairman Oceguera asked if there were any questions from the Subcommittee members and there were none. He asked for more testimony.
Garth Sevdalis, Reno resident, stated he might have missed some of the testimony but he did have some questions and comments. Chairman Oceguera asked him to summarize his concerns. Mr. Sevdalis wanted to insert a few words into NRS 613.200. He wanted to insert "who is or may be employed." This was to stop employers from preventing workers from being able to change jobs, if, for example, two employers had decided not to hire each other's employees.
Chairman Oceguera asked Mr. Johnson if he could shed some light on that issue. Mr. Johnson stated he had not seen what Mr. Sevdalis had prepared but it would expand the application of that section. That would deserve considerable review as to whether or not to expand the application of that section and it might possibly have a fiscal effect. What it appeared Mr. Sevdalis was asking was for the Labor Commissioner to expand this statute to not just apply to former employees but to all current employees. Chairman Oceguera stated he had also heard "who is or may be employed," which could mean everyone. He asked if anyone could offer a solution to Mr. Sevdalis' concerns.
Mr. Johnson said he wished he could offer more, but it might be too broad and beyond the capabilities of the Labor Commissioner's office to effect enforcement of all current employees.
Chairman Oceguera asked Mr. Sevdalis if he had other concerns. Mr. Sevdalis stated it did not seem right that two employers could agree not to hire each other's employees. They would be stopping the flow of labor, he stated. He noted that Nevada was a "right to work" state and that no one should prevent labor from flowing.
Assemblyman Beers stated they might want to consult with legal counsel. He noted he was unsure if that were legal. He explained his experience with a written Code of Ethics. If, for example, he should operate a CPA firm, he would not hire a competitor's CPAs and the competitor would not hire his. He was unsure if that were a negotiated agreement or if it were a legal case, but the Federal Trade Commission had stated they could not do that, and it was removed from the Code of Ethics. Mr. Keane was consulted, and he stated he had no knowledge of that.
Mr. Sevdalis explained that if a law were written to prevent workers from getting jobs after they had left employment, one would assume that anyone who was working would be covered.
Chairman Oceguera stated he did not know how to proceed with this line of testimony; he had attempted to make it as clear as he could, but he believed it would just broaden the statute. He apologized for not satisfying Mr. Sevdalis, who stated all he wished for was an answer.
Chairman Oceguera asked if there were any other concerns and there were none. He summarized their position, and stated they appeared to be in good shape. He closed the hearing on A.B. 143.
Chairman Oceguera stated that more work was needed on A.B. 141. The Research Division would write the amendments and he would schedule another Subcommittee meeting in about one week. Both A.B. 141 and A.B. 143 would be on the agenda.
Chairman Oceguera adjourned the meeting at 4:46 p.m.
RESPECTFULLY SUBMITTED:
Patricia Blackburn
Committee Secretary
APPROVED BY:
Assemblyman John Oceguera, Chairman
DATE: