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* This article has been corrected to include a more accurate description of the law's impact (09/18/13).

California Gov. Jerry Brown (D) Aug. 27 signed into law S.B. 776, which is designed to curtail the ability of contractors to count contributions to merit shop labor-management cooperation committees (LMCCs) against their fringe benefit obligations only if those committees monitor and enforce the prevailing wage. Other activities will still be allowed. The legislation preserves that ability for contractors contributing to similar committees run by unions.
California state law contains a provision in its prevailing wage act that allows employers to count contributions to LMCCs—which are almost all operated by unions—toward their fringe obligations. Employers have also been able to similarly treat contributions to the ABC California Construction Compliance Group (CCCG), which is a merit shop version of a labor-management committee.
Specifically, CCCG is a non-profit organization that promotes free, open, and vigorous competition in the building and construction industry through monitoring, enforcing, and evaluating changes to prevailing wage and apprenticeship laws in an effort to promote equal opportunity among prevailing wage contractors.  Additionally, CCCG is a leader on research into the negative impact of government-mandated project labor agreements.
According to john Loudon, executive director of CCCCG: “While very little out of Sacramento shocks anyone these days, it is surprising that lawmakers would bow to pressure from labor unions to try to defund the only independent labor compliance program in the state. If we are unable to monitor and enforce the prevailing wage, cheating contractors will be emboldened and cheated workers will be left in the cold. That is bad policy. Apparently, our other activities would still be allowed.”

California Labor Code section 1773.1 recognizes that these contributions can be used for many purposes and CCCG will continue to fund activities which encourage fair and open competition in public contracting.