CONTACT:
Rick Rice
(714) 935-2812

SAN FRANCISCO--"As 1995 draws to a close it is important to look back at the year to determine what has been accomplished and what remains to be done to help make California a vibrant state in which to live, work and do business," said Lloyd W. Aubry, Jr., Director of the California Department of Industrial Relations. "With that in mind, we have summarized a few of the varied accomplishments of the Department and present some of the issues that will appear before us in the coming year."

Regulatory Reform

• Prevailing Wage Reform - DIR officially filed notice to begin public hearings on proposed regulations that could save the taxpayers millions of dollars by bringing two important aspects of California's prevailing wage rules into conformance with federal law. DIR has proposed changes in the way the State calculates the prevailing wage on public works projects. The change will save government entities up to $200 million a year in labor costs while at the same time ensuring that a fair and living wage is paid to everyone employed on the project. DIR has also proposed that the "double asterisk" provision of the law be repealed. This regulatory provision requires that prevailing wages automatically increase under certain circumstances -- and is a provision that goes well beyond federal requirements to inflate the cost of public works projects. The changes will bring California into line with the way 47 other states and the federal government calculate the prevailing wage.

• Daily Overtime Reform - At the request of Governor Wilson, DIR proposed conforming California's daily overtime requirements with federal law (and 46 other states) under the Fair Labor Standards Act (FLSA). The FLSA requires that overtime be paid after 40 hours worked in one week, California's more stringent overtime requirements weaken the state competitively with other states. Legislative inaction on this proposal however, moved the Governor to make the request of the rulemaking body, DIR's Industrial Welfare Commission (IWC). The IWC, responding to the Governor's request, agreed to take up the issue of daily overtime reform and will begin holding hearings throughout the state next year. Currently, California law governing daily overtime goes beyond the federal Fair Labor Standards Act by requiring overtime pay after eight hours of work in a day rather than after 40 hours of work in a week as the FLSA mandates. Due to this daily requirement and related provisions of the law, it is extremely difficult for employers and employees to set flexible work schedules (i.e. "four tens, etc.). Changes to rules governing wages, hours, or working conditions can be made by either the IWC, which establishes these rules for 15 separate industry groupings and occupations, or through the Legislature. By conforming California law to federal law, employers and employees in our state would be better able to set flexible work schedules and would again become more competitive with other states. As the Governor wrote to the IWC, "In our modern, competitive economy and with a social climate in which employees increasingly face the challenge of balancing work and family schedules, Californians need the enhanced flexibility that would be available if our overtime requirements conformed with federal law."

Results In Workers Compensation Reform

As a LA Times columnist stated in a recent commentary, "Let's also thank all those who fought in the business climate reform movement. To some, California was once infamous for being about as inviting to business as communist Bulgaria....but at least we have put a stake in the heart of the most obnoxious impediment -- the notorious workers' compensation system that was piling unnecessary costs on all businesses and crushing small ones..."

• The fight for Workers Compensation reform that Governor Wilson led in 1993 has paid off. California industries are saving over $1.2 billion per year in workers compensation premiums for insured industries. From a high of $9 billion in premiums in 1993, premiums have fallen to an estimated $5.9 billion in 1995. Even greater savings are realized if you include self-insured corporations.

  Overall rates are for workers compensation are 41% lower than in 1993.

  Industry watchers believe that premiums may drop as low as $5 billion per year in the near future.

  Risk managers doing business in California believe that since reform, rates have dropped 30% to 40% on average.

  These accomplishments will allow business in the State to pump those savings into job creation, helping California to once again, lead the nation in job growth.

Workplace Safety and Health

• Decline in Job Injury Rates - As data became available in 1995, the annual Occupational Injuries and Illnesses Survey conducted by DIR showed that work-related injuries and illnesses per 100 full-time workers in California dropped from 9.0 two years ago to 8.6 in 1994. All major industry divisions in the state recorded year-to-year incidence rate reductions except two (Finance, Insurance and Real Estate; and Services) in which the rates remained unchanged.

• Federal Government Praises Cal/OSHA - In its evaluations of California's workplace safety and health programs (Cal/OSHA and the Cal/OSHA Consultation Service), issued December 11, 1995, the U.S. Department of Labor stated "...the Cal/OSHA Consultation Service continued to operate an exemplary consultation program for the private sector employers..."For the Cal/OSHA enforcement program, the report went on to say that "Cal/OSHA continues to operate a comprehensive and innovative program...Cal/OSHA remains at the forefront of emerging occupational safety and health issues. Federal OSHA looks forward to working with Cal/OSHA in an atmosphere of continuing partnership and mutual support."

Labor Law Enforcement

• Protecting Jobs and Labor Through Targeted Enforcement - The Targeted Industries Partnership Program (T.I.P.P.), under the direction of the California Labor Commissioner, was developed to facilitate a multi-agency assault on those in the garment and agriculture industries who violate labor and tax laws at the expense of their law-abiding competitors.

  In one of the most highly visible enforcement actions in the history of the Department, T.I.P.P. investigators, led personally by the Labor Commissioner in a pre-dawn raid last August, uncovered slave-like conditions in a barbed wire-ringed apartment complex in El Monte, east of Los Angeles. The 72 workers there had toiled day and night for up to six years, making clothing that found its way into mainstream commerce. The enforcement action riveted that nation's attention on abuses if illegal immigrants in the industry and served as an example of the ultimate consequences that can befall those who find their way into the workforce as a result of lax enforcement of the nation's immigration laws.

Public Access

• DIR Launched Internet Home Page - Access to information on all of DIR's programs is now available through the Internet. Our address is http://www.dir.ca.gov or we can also be found through the California Home Page at http://www.ca.gov and comments and suggestions may also be directed to us at info@dir.ca.gov.

(For more information on these accomplishments and issues, please feel free to contact the above number or access our Home Page on the Internet.)