BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 THIRD READING


          Bill No:  AB 569
          Author:   Emmerson (R)
          Amended:  7/1/09 in Senate
          Vote:     21

           
           SENATE LABOR & INDUS. RELATIONS COMMITTEE  :  6-0, 6/25/09
          AYES:  DeSaulnier, Wyland, Ducheny, Hollingsworth, Leno,  
            Yee

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  72-2, 5/21/09 - See last page for vote


           SUBJECT  :    Meal periods:  exemptions

           SOURCE  :     United Parcel Service


           DIGEST  :    This bill exempts employees in a construction  
          occupation and commercial drivers that are covered by a  
          collective bargaining agreement from meal period laws, as  
          specified.

           ANALYSIS  :    

          Existing law requires, with certain exemptions, that all  
          employees receive a meal break of 30 minutes before the  
          start of the 5th hour of work, unless the work period is no  
          more than six hours and both the employer and the employee  
          choose to waive the meal period by mutual consent.  

                                                           CONTINUED





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          Meal period exemptions apply to:

          1. Employees in the wholesale baking industry, when covered  
             by a collective bargaining agreement.

          2. Employees in the motion picture industry, when covered  
             by a collective bargaining agreement.

          3. Public transit bus drivers covered by a collective  
             bargaining agreement.

          Existing law requires that if the work period is more than  
          ten hours, a second meal period of 30 minutes must also be  
          granted to an employee.  This second meal period can be  
          waived by the mutual consent of the employer and employee,  
          but only if the work period is no more than 12 hours, and  
          the first meal period was not waived.  

          Existing law states that if an employer fails to provide a  
          meal break, the employer must give the employee one hour of  
          additional premium wages at the employee's regular rate of  
          compensation for each workday that a meal period was not  
          provided.  If unpaid, existing law requires that this wage  
          accrues for 30 days and the statute of limitations on its  
          collection runs for three years.

          Existing wage orders state that employees in the  
          transportation and construction industries must be relieved  
          of all duty during the meal break.  Otherwise, the meal  
          break is considered "on duty" and counted as work.  An "on  
          duty" meal break may be allowed only when the nature of the  
          work prevents an employee of being relieved of all work  
          duties, and when a written agreement between the employer  
          and employee for an on-the-job paid meal break period is  
          agreed to.  The employee may revoke the agreement in  
          writing at any time.

          This bill exempts employees employed in the construction  
          industry and commercial drivers in the transportation  
          industry if those employees are covered by a collective  
          bargaining agreement, and that agreement:

             A.    Expressly provides for the wages, hours of work,  
                and working conditions of employees, and expressly  







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                provides for meal periods for those employees. 

             B.    Provides final and binding arbitration of  
                disputes concerning application of its meal period  
                provisions.

             C.    Provides a premium wage rates for all overtime  
                hours worked, and a regular hourly rate of pay of  
                not less than 30 percent more than the state  
                minimum wage rate.

          This bill also declares that these meal period exemptions  
          do not affect the nature or scope of existing law related  
          to meal periods for employees or employers not specifically  
          covered by the exemptions.

           Comments
           
          AB 60 (Knox), Chapter 134, Statutes of 1999, included the  
          codification of the Industrial Welfare Commission (IWC)  
          Wage Order requirement that all employers provide a meal  
          period for their employees.  Prior to AB 60, meal periods  
          had been required by the regulatory IWC Wage Orders, but,  
          with the exception of a few industries, were not  
          statutorily required.  The following year, AB 2509  
          (Steinberg), Chapter 876, Statutes of 2000, created the  
          monetary punishment for employers who do not provide a meal  
          period for their employees.  

          In 2002, the Department of Labor Standards Enforcement  
          (DLSE) enforcement manual interpreted the requirement of  
          the employer to provide a meal period as a responsibility  
          that falls directly on the employer to ensure that the  
          employee takes a meal period, much as it is the employer's  
          responsibility to ensure that his/her employee is paid the  
          minimum wage.

          Two years later, the DLSE sought to create emergency  
          regulations to define the requirement to provide a meal  
          period to "supply" or "make available".  These regulations  
          were withdrawn in 2005, and the DLSE decided to not move  
          forward with further meal period regulations in 2006.  This  
          left the 2002 DLSE interpretation intact.








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          During this period, Wage Order 16, which applied to  
          construction employees, contained a collective bargaining  
          exemption for construction employees.  However, in 2006, a  
          California Court of Appeal held in  Bearden v. U.S. Borax,  
          Inc.  that this collective bargaining exemption contained in  
          Wage Order 16 conflicted with the Labor Code and was  
          therefore invalid.  

          On July 22, 2008, the California Court of Appeal in  Brinker  
          Restaurant Corporation v. Superior Court of San Diego  
          County  (Hohnbaum) (2008) interpreted existing law and the  
          IWC Wage Order meal period provisions as a requirement for  
          employers to provide meal periods by making them available,  
          but need not ensure that they are taken.  Employers,  
          however, cannot impede, discourage or dissuade employees  
          from taking meal periods.  

          However, On October 22, 2008, the California Supreme Court  
          granted review of the California Court of Appeal decision  
          in  Brinker Restaurant Corp. v. Superior Court of San Diego  
          County  (Hohnbaum).  The Supreme Court's grant of review  
          supersedes the Court of Appeal's decision.  The Supreme  
          Court is expected to confirm, among other things, whether  
          the meal period laws and regulations impose upon employers  
          a responsibility to ensure that employees actually take the  
          meal period, or rather that the employer's obligations is  
          simply to make that meal period available to the employee  
          and afford the employee the opportunity to take the meal  
          period.

          Until the Supreme Court can clarify the meaning of Labor  
          Code Section 512, the new position of the DLSE is that  
          "[t]aken together, the language of the statute and the  
          regulation, and the cases interpreting them demonstrates  
          compelling support for the position that employers must  
          provide meal periods to employees but do not have an  
          additional obligation to ensure that such meal periods are  
          actually taken."

           Related/Prior legislation
           
          SB 287 (Calderon) would grant employers greater flexibility  
          to provide meal periods, expand the number of qualifying  
          circumstances for creating on-duty meal period agreements,  







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          and exempt collective bargaining agreements from meal  
          period law.  The hearing of this bill was cancelled at the  
          author's request.

          SB 380 (Dutton) would grant employers greater flexibility  
          to provide meal periods, expand the number of qualifying  
          circumstances for creating on-duty meal period agreements,  
          exempt collective bargaining agreements from meal period  
          law, and state these amendments are declarative of existing  
          law, and would not be considered amendatory of existing  
          law.  The hearing of this bill was cancelled at the  
          author's request.

          SB 665 (Cedillo) would allow an employer of a registered  
          security officer to provide on-duty meal periods if the  
          officer is covered by a valid collective bargaining  
          agreement containing specified terms or has a written  
          on-duty meal period agreement with his or her employer  
          containing specified terms.  The hearing of this bill was  
          cancelled at the author's request.

          SB 807 (Benoit) would grant employers greater flexibility  
          to provide meal periods, and also reduce the punishment for  
          failing to provide a meal period.  Testimony for this bill  
          was taken, and a further hearing will be set later.

          AB 2593 (Keene) of 2005, would have exempted commercial  
          drivers from meal period provisions.  AB 2593 was vetoed by  
          the Governor in 2005.  In his veto message, the Governor  
          said that he vetoed AB 2593 because it singled out a  
          specific industry, and the Governor felt it could imperil  
          ongoing litigation.  

          AB 1734 (Koretz), Statutes of 2005, Chapter 414, exempted  
          certain employees in the motion picture industry from meal  
          period requirements if they were covered by a valid  
          collective bargaining agreement with specified terms.

          AB 3018 (Koretz) of 2003, which contained language  
          identical to AB 2593 of 2005, allowed commercial drivers to  
          negotiate meal period requirements if covered by a  
          collective bargaining agreement.  It was vetoed by the  
          Governor.








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           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  7/14/09)

          United Parcel Service (source)
          Associated General Contractors 
          California Legislative Conference of the Plumbing, Heating  
          and 
            Piping Industry
          California-Nevada Conference of Operating Engineers, SEIU
          Construction Employers Association
          Engineering Contractors' Association
          National Electrical Contractors Association, California  
          chapters
          Service Employees International Union

           OPPOSITION  :    (Verified  7/14/09)

          Associated Builders and Contractors of California
          California Cleaners Association
          California Construction & Industrial Materials Association
          California Employment Law Council
          California Hospital Association
          California Lodging Industry Association
          California Manufacturers and Technology Association
          California Nurses Association
          California Retailers Association
          Department of Industrial Relations
          Lumber Association of California and Nevada
          National Federation of Independent Business
          Western Growers

           ARGUMENTS IN SUPPORT  :    The sponsor of this bill, the  
          United Parcel Service (UPS), argues that this bill will  
          provide an immediate necessary flexibility for collectively  
          bargained commercial drivers and employees of the  
          construction industry.  UPS notes that, while they continue  
          to support broader approaches to meal period flexibility,  
          UPS argues that it cannot continue to discipline their  
          collectively bargained drivers when flexible solution  
          agreed to by management and employers is available.

          AGC argues that the various interpretations of meal period  







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          law by enforcement officials have led to significant  
          confusion and litigation.  AGC reports that in order to  
          avoid liability, contractors are forced to police their  
          workforce to their meal periods without interruption.   
          Although many construction companies operate under  
          collective bargaining agreements, they have lost their  
          ability to bargain on the meal period issue due to  Bearden  
          v. Borax  .  Finally, AGC notes that, in this economic  
          climate, providing flexibility for collectively bargained  
          contractors will supply key relief from litigation.

           ARGUMENTS IN OPPOSITION  :    The California Nurses  
          Association (CNA) argues that by carving out two groups of  
          workers under collective bargaining agreements will  
          compromise basic labor law that protects the ability of all  
          workers to have a lunch break.  CNA believes that carving  
          out commercial drivers and employees of the construction  
          industry will encourage other employers to push for similar  
          exemptions, which employers will use as a take-away during  
          negotiation.  CNA notes that it is difficult for registered  
          nurses (RNs) to receive meal breaks due to staffing issues  
          and nurse to patient ratio laws.  CNA believes that the  
          best way for RNs to take their meal breaks is to be  
          backed-up by existing law, and therefore opposes any  
          collective bargaining carve out that could create a  
          precedent for the healthcare industry.

          Other opponents, such as the California Manufacturing and  
          Technology Association, the California Hospital  
          Association, the Associated Builders and Contractors of  
          California, and other employer organizations, have taken an  
          'oppose unless amended' position, arguing that this bill  
          should be amended to provide meal period flexibility to all  
          employers.  These opponents feel that current meal period  
          law is too rigid and inflexible, and this bill should  
          follow the example of SB 287 (Calderon).  The Department of  
          Industrial Relations also opposes this bill due to its  
          "piecemeal approach", and believes that a global solution  
          that provides meal period flexibility for all employers is  
          necessary.  
           
           ASSEMBLY FLOOR  : 
          AYES:  Adams, Arambula, Beall, Bill Berryhill, Tom  
            Berryhill, Blakeslee, Block, Blumenfield, Brownley,  







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            Buchanan, Caballero, Charles Calderon, Carter, Chesbro,  
            Conway, Cook, Coto, Davis, De La Torre, De Leon, Duvall,  
            Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes,  
            Furutani, Gaines, Galgiani, Gilmore, Hagman, Hall,  
            Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,  
            Jeffries, Jones, Lieu, Logue, Bonnie Lowenthal, Ma,  
            Mendoza, Miller, Monning, Nava, Nestande, Niello,  
            Nielsen, John A. Perez, V. Manuel Perez, Portantino,  
            Price, Ruskin, Salas, Silva, Skinner, Smyth, Solorio,  
            Audra Strickland, Swanson, Torlakson, Torres, Torrico,  
            Tran, Villines, Yamada, Bass
          NOES:  Anderson, Fuller
          NO VOTE RECORDED:  Ammiano, DeVore, Garrick, Knight,  
            Krekorian, Saldana


          AGB:do  7/14/09   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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