SUPPORT THE UNION CONSTRUCTION INDUSTRY!
URGE CALIFORNIA LEADERS TO PROVIDE FINANCIAL RELIEF FOR COVID PAID LEAVE
In March of 2022, Governor Newsom signed SB 114 into law, reinstating a requirement for California employers to provide and pay for COVID Paid Leave. The new law is identical to the original COVID Paid Leave mandate passed in 2021, with one significant difference: The new law was implemented even though federal tax credits to offset the costs had expired, which forces employers to pay out of pocket for the high costs of the new mandate. The costs of COVID Paid Leave are especially burdensome to California’s union-signatory construction employers and threaten their ability to stay in business. With a historic budget surplus, California should be helping, not harming, union-signatory businesses that pay primum wages to their employees while building and maintaining vital infrastructure projects across our state. Please take action! Urge Governor Newsom and the State Legislature to provide financial relief for California’s union-signatory contractors and other premium wage employers.
Mandated COVID Paid Leave Hurts CA’s Union-Signatory Construction Employers
SB 114 was implemented with companion legislation that provided narrow tax relief in the form of Net Operating Loss (NOL) and Research & Development (R&D) tax credits to offset the costs of the COVID Paid Leave. However, neither of these tax credits are accessible to union construction businesses, leaving them holding the bag for the high costs of providing COVID Paid Leave.
In addition, union construction is uniquely, negatively impacted by mandated COVID Paid Leave in the following ways:
Mandated COVID Paid Leave Makes Union Construction Employers Less Competitive Than Non-Union Construction Employers
Union-Signatory construction employers pay significantly higher wages than non-union construction employers. These wages take into account unpaid time off for illness and other unplanned time away from work. The new COVID Paid Leave law inadvertently disregards that union contractors have already negotiated higher wages to supplement unpaid time off or illness. Mandated Paid COVID Leave inadvertently requires union contractors to pay their employees twice for the same leave, making them less competitive.
Mandated COVID Paid Leave Doubles Labor Costs for Union-Signatory Contractors
For most CA businesses, an employee out on leave simply delays goods or services to the customer; however, construction firms are affected much differently. California’s union construction businesses face significant contractual obligations for project completion timelines, including the risk of liquidated damages. Additionally, contractors who fall behind in the project schedule face back-charges if the delays cause other trades not to be able to perform their work. Working shorthanded is not an option on a construction site. Another worker must replace every worker who is out on leave. As a result, the Paid COVID Leave mandate requires contractors to pay twice. In other words, for every ten employees out on COVID Paid Leave, the construction employer must pay twenty people to get the job done on time. And unlike most other businesses, construction businesses operate on fixed-price contracts and have no way to recoup or pass on these cost increases.
Providing Financial Relief to Premium Wage Employers Protects Union Workers and High Road Employers
California’s legislative leaders should be applauded for their efforts to reduce COVID rates while protecting workers. However, if California wants to provide Paid COVID Leave for high wage hourly workers, the state should utilize funds earmarked explicitly for COVID issues or utilize funds from the largest fiscal surpluses in our state’s history to pay for it. California should do so through a dollar-for-dollar state tax credit or a Grant Program accessible to premium wage paying businesses to offset the costs of the employee leave. Doing so ensures that workers dealing with a COVID-related issue unrelated to the workplace can stay home without unjustly burdening high-road employers, including union-signatory construction contractors, with the significant costs associated with the paid leave. When you protect union-signatory contractors, you protect good union jobs in CA and ensure union-signatory construction employers can continue meeting our state's vital infrastructure needs.
@CAGovernor: #SB114 hurt CA’s union construction industry. Protect our workers AND businesses by providing financial relief to cover the cost of mandated COVID paid leave. #ProtectUnionConstruction
Urge other CA union contractors to make their voices heard! Email peers and ask them to take action today by visiting this website and writing and tweeting to their representatives.
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