On September 28, 2016, Governor Brown signed SB693 (Hueso) into law which establishes general provisions for the use of a “skilled and trained workforce” for certain public works projects. SB693 further authorizes the use of a “skilled and trained workforce” even when not required by law.

Over the past several years, numerous statutes enacted for various state agencies and local public entities required the use of a “skilled and trained workforce” on various types of public works projects. Those statutes have small variances on the implementation of the “skilled and trained workforce” and SB693 creates generally applicable provisions for the use of a “skilled and trained workforce.”

SB693 applies to K-12 lease-leaseback (Ed. Code § 17407.5) and design-build projects (Ed. Code 17250.25), Cities and Counties design-build projects (Pub. Contr. Code § 22164), Los Angeles Unified School District best value pilot procurement program (Pub. Contr. Code § 20119.1, 20119.3), Counties of Alameda, Los Angeles, Riverside, San Bernardino, San Diego, Solano, and Yolo best value pilot procurement programs (Pub. Contr. Code § 20155.4), and state agency design build projects (Pub. Contr. Code § 10191) that are advertised for bid or awarded after January 1, 2017.

SB693 continues to require that the contractor and each subcontractor, at any tier, employ a “skilled and trained workforce” for each “apprenticeable occupation.” An “apprenticeable occupation” is defined as an occupation for which the chief of the Division of Apprenticeship Standards has approved an apprenticeship program prior to January 1, 2014. The “skilled and trained workforce” must be comprised of “skilled journeypersons,” who are defined as persons who have graduated from a State approved apprenticeship program, or have enough on-the-job hours in the applicable occupation to graduate from an apprenticeship program, and apprentices who are enrolled in an approved apprenticeship program.

Beginning on January 1, 2017, 30% of the “skilled and trained workforce” for each “apprenticeable occupation” on the project must be comprised of journeypersons that have graduated from an apprenticeship program. A graduate from an apprenticeship program is defined as someone who receives a certificate of completion under the authority of the California Apprenticeship Council for a program approved by the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations or completion of an apprenticeship program outside of California approved for federal purposes by the Secretary of Labor. Please note that this percentage applies to each “apprenticeable” trade employed on the project by every contractor and each of its subcontractors at any tier, and not to the entire labor force. The percentage rises to 40% on January 1, 2018, 50% on January 1, 2019, and finally to 60% on January 1, 2020. For an apprenticeable occupation in which no apprenticeship program was approved before January 1, 1995, up to half of the percentage requirement may be satisfied byjourneypersons who began working in that apprenticeable occupation before the approval of the apprenticeship program in the county in which the project is located. The “skilled and trained workforce” percentages are satisfied in each calendar month, if the required percentage of skilled journeypersons employed by the contractor or subcontractors on the project meet or exceeds the graduation percentage requirement, or the number of hours worked by the skilled journeypersons by the contractor or the subcontractors on the project meets or exceeds the percentage requirements.

SB693 provides much needed clarification on the enforceable obligation and monthly reporting requirements on the use of the “skilled and trained workforce” requirements. If an enforceable obligation is required, it must provide that the contractor and every subcontractor, at any tier, will comply with the “skilled and trained workforce” requirement, the contractor will provide a monthly report demonstrating compliance, failure to provide the monthly report or providing an incomplete monthly report will result in the awarding body withholding further payments until a complete report is provided, and failure to demonstrate compliance with the percentage requirements will result in the awarding body withholding payment until a plan to achieve substantial compliance is submitted prior to completion of the project.

Contractors or subcontractors are not required to meet the “skilled and trained workforce” requirements if, during that calendar month, they employ skilled journeypersons who will perform less than 10 hours of work on the project. Subcontractors are not required to meet the “skilled and trained workforce” requirements if the subcontractor was not a listed subcontractor or acting as a substitute for a listed subcontractor, and the subcontract was less than ½ of 1% of the price of the prime contract.

The enforceable commitment and monthly reporting requirements do not apply if the awarding body has entered into a Project Labor Agreement that binds all contractors and subcontractors who will perform work on the project to use a “skilled and trained workforce,” the project is being performed under an extension or renewal of the Project Labor Agreement that was entered into prior to January 1, 2017, or the contractor has entered into a Project Labor Agreement that will bind the contractor and every subcontractor at any tier on the project to use a “skilled and trained workforce.”

The “skilled and trained workforce” requirements continue to show up in different types of public works project delivery methods. SB693 provides clarification to the procedures and even authorizes the use of a “skilled and trained workforce” on projects where one is not required by law. However, these significant labor requirements should be examined closely before using the project delivery methods discussed here. We urge all parties who are considering utilizing one of these delivery methods to consult with their legal counsel concerning the requirements of a “skilled and trained workforce.”