BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 569| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 AB 569 Page 2 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 AB 569 Page 3 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. AB 569 Page 4 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, AB 569 Page 5 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. AB 569 Page 6 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 AB 569 Page 7 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, AB 569 Page 8 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 **** END ****