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Agenda Date:
Item:
ORDINANCE NO. 3190-22
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
SUNNYVALE ADOPTING CHAPTER 16.80 (RESPONSIBLE
CONSTRUCTION) OF TITLE 16 (BUILDINGS AND
CONSTRUCTION) OF THE SUNNYVALE MUNICIPAL CODE
THE CITY COUNCIL OF THE CITY OF SUNNYVALE FINDS AND DECLARES AS FOLLOWS:
WHEREAS, a report by the Economic Policy Institute in 2017 found that wage theft is a pervasive issue that costs U.S. workers billions of dollars a year; and WHEREAS, wage theft occurs as a result of illegal employment practices such failing to pay workers for all the hours worked, not paying the promised rate of pay, not paying minimum wage or overtime, denying workers meal and rest breaks, issuing paychecks late or paychecks that are returned for insufficient funds; and
WHEREAS, workers in California who pursue wage claims through the Labor Commissioner’s office often have difficulty collecting the judgments that they receive because of the legal tools for debt collection are complex, highly technical, and often ineffective; and WHEREAS, a report by the UCLA Labor Center and the National Employment Law Project entitled “Hollow Victories: The Crisis in Collecting Unpaid Wages for California’s Workers” found that the inability for workers to collect wage theft judgments has a cascade of social consequences which decreases tax revenue for state and local governments and creates an unfair playing field where law-abiding businesses are unable to complete; and
WHEREAS, according to a report by the UC Berkeley Center for Labor Research and Education (July 2021), “The Public Cost of Low-Wage Jobs in California’s Construction Industry,” illegal employment practices are particularly rampant in the construction industry; and WHEREAS, construction is a highly regulated industry due to the unique risks that construction activities pose to workers and the general public. It is in the public interest for the City to use its regulatory authority over construction to ensure that entities engaged in construction projects meet all of their legal obligations to their employees.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SUNNYVALE DOES ORDAIN AS FOLLOWS:
SECTION 1. CHAPTER 16.80 ADOPTED. Chapter 16.80 (Responsible Construction) of Title 8 (Buildings and Construction) of the Sunnyvale Municipal Code is hereby adopted to read as stated in Exhibit A attached to this Ordinance and incorporated herein by reference.
SECTION 2. CEQA. This ordinance is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Sections 15061(b)(3).
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Agenda Date:
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SECTION 3. EFFECTIVE DATE. This ordinance shall be in full force on July 1, 2022.
SECTION 4. PUBLICATION. The City Clerk is directed to cause copies of this ordinance to be posted in three (3) prominent places in the City of Sunnyvale and to cause publication once in The Sun, the official newspaper for publication of legal notices of the City of Sunnyvale, of a notice setting forth the date of adoption, the title of this ordinance, and a list of places where copies of this ordinance are posted, within fifteen (15) days after adoption of this ordinance.
Introduced at a regular meeting of the City Council held on March 1, 2022, and adopted as an ordinance of the City of Sunnyvale at a regular meeting of the City Council held on March 22, 2022, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
RECUSAL:
ATTEST: APPROVED:
DAVID CARNAHAN
City Clerk
Date of Attestation: ____________________
LARRY KLEIN
Mayor
(SEAL)
APPROVED AS TO FORM:
_____________________________________
JOHN A. NAGEL
City Attorney
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SMC Ch. 16.80 (final) Page 1 of 5
SUNNYVALE MUNICIPAL CODE CHAPTER 16.80
RESPONSIBLE CONSTRUCTION
16.80.010. Definitions.
16.80.020. Exemptions.
16.80.030. Acknowledgement of responsibility.
16.80.040. Posting.
16.80.050. Pay transparency certification.
16.80.060. Violations.
16.80.070. Unpaid wage theft judgment—notice of complaint.
16.80.080. Unpaid wage theft judgment—appeal.
16.80.090. Cure of violation.
16.80.100. No p rivate right of action.
16.80.010. Definitions.
The following words and phrases, whenever used in this Chapter, shall be construed as defined in this Section:
(a) “Certificate of occupancy” means the building official’s certification under chapter 16.16 of this code that the project complies with all applicable requirements for occupancy. The building official’s signature on the final inspection card may serve as the certificate of occupancy.
(b) "Contractor" means the prime contractor for the project. (c) “Hearing officer” means the City Manager or designee. (d) “Labor Code Section 226(a)” is a provision of the California Labor Code that requires the employer to provide each employee, either bimonthly or at the time of payment of wages, an itemized wage statement that contains certain specified information concerning the employee’s wages and deductions.
(e) “Labor Code Section 2810.5” is a provision of the California Labor Code that requires the employer, at the time of hiring, to provide each employee a written notice containing certain specified information about the employer, the employee’s rate of pay, worker’s compensation insurance, and sick leave.
(f) “Mail” means to deposit in United States mail, postage prepaid, unless the parties have agreed in writing to receive notifications by email in lieu of United States mail. (g) “New construction” means construction of new buildings or structures including additions to existing buildings and structures.
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SMC Ch. 16.80 (final) Page 2 of 5
(h) "Owner" means the person or persons, firm, corporation, partnership or other legal entity exercising ownership of the project.
(i) “Remodeling” means internal or external reconstruction, renovation, or improvements to an existing building or structure that does not constitute complete replacement of the existing building or structure.
(j) "Project" means a construction project that requires a building permit. (k) "Project construction employees" means employees of the contractor or subcontractor. (l) "Representative" means a person authorized to legally bind the owner and/or contractor (for example, a corporate officer, general partner, or managing member of a limited liability company).
(m) "Unpaid wage theft judgment" means a judgment, decision or order, for which all appeals have been exhausted or the time to appeal has expired, that was issued by a court of law or an investigatory government agency authorized to enforce applicable federal, state and local wage and hour laws, including but not limited to, the Federal Fair Labor Standards Act, the California Labor Code, and the City of Sunnyvale Minimum Wage Ordinance, and which has not been fully paid or satisfied. As used in this subsection, "investigatory government agency" includes the United States Department of Labor, the California Division of Labor Standards Enforcement, the City of Sunnyvale, or any other governmental entity or division tasked with the investigation and enforcement of wage and hour laws.
16.80.020. Exemptions.
A project that meets any of the following criteria is exempt from the requirements of this chapter.
(a) The project consists of less than 15,000 square feet of new construction or remodeling. (b) The project is subject to prevailing wage requirements under state law. (c) The contractor and all subcontractors are legally bound by an agreement that establishes the terms and conditions of employment on the project, commonly referred to as a project labor agreement or community workforce agreement.
16.80.030. Acknowledgement of responsibility.
As a condition of approval for any building permit required for a project, an applicant shall sign an acknowledgement that:
(a) The owner, contractor, and all subcontractors on the project will comply with all applicable provisions of this chapter and the California Labor Code, including Labor Code Sections 2810.5 and 226a.
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SMC Ch. 16.80 (final) Page 3 of 5
(b) The owner and contractor are responsible for ensuring that the contractor and all subcontractors on the project pay any wage theft judgments that have been entered against them either before or during the construction of the project. (c) The existence of an unpaid wage theft judgment against the contractor or any subcontractor on the project may result in withholding of the certificate of occupancy at the conclusion of the project.
16.80.040. Posting.
Each day that work is performed on the project, the contractor shall post, in a conspicuous place at each job site where work takes place, the notice published each year by the city informing employees of their rights under this ordinance. The notice shall be written in the top three languages spoken in the city based on the latest available census information for the city.
16.80.050. Pay transparency certification.
Prior to issuance of approval of final occupancy of a project, for each contractor or subcontractor whose portion of the work exceeds one hundred thousand dollars or one percent of the value of the construction cost of the project, whichever is greater, owner shall provide to the city a pay transparency certification ("certification"), signed by a representative of the owner, the contractor and any subcontractor under penalty of perjury under the laws of the state of California. The certification required under this section shall be in a form approved by the city and contain the following.
(a) A statement that:
(1) Project construction employees of the contractor and any subcontractors received written notice of the employers’ pay practices as required by California Labor Code Section 2810.5 and wage statements under Labor Code Section 226(a); or (2) Project construction employees of the contractor and/or any subcontractors are covered by a valid collective bargaining agreement that expressly provides for the wages, hours of work, and working conditions of the employee, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage. (See Labor Code Section 2810.5(c).)
(b) A statement that the owner, contractor and any subcontractors have no unpaid wage theft judgments.
16.80.060. Violations.
(a) The building official shall not issue a certificate of occupancy under either of the following circumstances:
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SMC Ch. 16.80 (final) Page 4 of 5
(1) The owner has failed to submit the pay transparency certification required by section 16.80.050.
(2) The building official has sustained a complaint of an unpaid wage theft judgment pursuant to section 16.80.070, and the owner or contractor has neither cured the unpaid wage theft judgment nor reversed the building official’s determination by appeal pursuant to section 16.80.080.
(b) In addition to any other remedies provided by law, violation of this chapter is an infraction punishable as set forth in Chapter 1.04 of this code and may be subject to administrative citations, fines, and penalties as set forth in Chapters 1.05 and 1.06 of this code.
16.80.070. Unpaid wage theft judgment—complaint.
(a) Any person who is legally entitled to payment of an unpaid wage theft judgment against the contractor or a subcontractor on a project whose portion of the work exceeds one hundred thousand dollars or one percent of the value of the construction cost of the project, whichever is greater, may submit a complaint to the building official. The complaint must include (1) a copy of the Labor Commissioner’s order, decision or award, (2) a copy of the judgment entered by the Superior Court, (3) a declaration signed under penalty of perjury that the specified contractor or subcontractor is the subject of an unpaid wage theft judgment that is owed to the complaining party.
(b) The complaint must be received by the building official before the building official has issued a certificate of occupancy. After receiving a complaint, the building official shall not issue the certificate of occupancy unless the building official finds that the complaint is not sustained. (c) The building official shall, with ten (10) working days, mail written notice of the complaint to the owner and contractor at the address(es) on file with the city for the project. If the review of the complaint will delay issuance of the certificate of occupancy, the building official shall notify the owner and contractor as soon as practicable. (d) The owner or contractor may provide a written response to the complaint within thirty (30) working days of the mailing of the notice of alleged violation. Failure to respond may be deemed an admission to the truth of the facts alleged in the complaint. (e) After consideration of the complaint and the owner or contractor’s response, if any, the building official shall make a finding that the complaint is either sustained or not sustained. The building official’s decision shall be mailed to owner, contractor, and complaining party.
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SMC Ch. 16.80 (final) Page 5 of 5
16.80.080. Unpaid wage theft judgment—appeal.
(a) If an owner or contractor is aggrieved by a decision of the building official pursuant to section 16.80.070, the aggrieved owner or contractor may appeal the decision by submitting a written appeal with the community development department within ten (10) working days of the mailing of the building official’s decision. The appeal shall contain the facts and basis for the appeal. The appeal shall be accompanied by payment of the appeal fee adopted by the city council.
(b) The hearing shall be heard by the hearing officer within thirty (30) working days of receipt of the appeal, or at a date and time agreed to by the parties. The complaining party shall be the respondent at the appeal hearing.
(c) All parties involved shall have the right to offer testimonial, documentary, and tangible evidence bearing on the issues, to be represented by counsel, and to confront and cross- examine witnesses. Testimony may be taken on oath or affirmation. The hearing shall not be conducted according to formal rules of evidence. Any relevant evidence may be admitted if it is the sort of evidence upon which reasonable persons are accustomed to rely in the conduct of serious affairs.
(d) The hearing shall be de novo. The complaining party must prove by a preponderance of the evidence that the contractor or a subcontractor on the project is the subject of an unpaid wage theft judgment that is owed to the complaining party. (e) The hearing officer shall issue a written decision within 10 working days of the hearing.
The decision shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6.
16.80.090. Cure of violation.
The owner or contractor may cure a violation of this chapter at any time, including a violation related to an unpaid wage theft judgment, by providing evidence that the judgment has been paid, or that it has been secured by a labor payment bond, lien release bond, or similar security instrument in a form and amount sufficient to ensure that any wage claims and penalties can be fully paid.
16.80.100. No private right of action.
Nothing in this chapter shall be interpreted to authorize a right of action against the city.
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