BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 THIRD READING


          Bill No:  AB 569
          Author:   Emmerson (R)
          Amended:  8/20/10 in Senate
          Vote:     21

           
          2009 VOTES NOT RELEVANT

           SENATE LABOR & INDUSTRIAL RELATIONS COMM  :  5-0, 6/23/10
          AYES:  DeSaulnier, Ducheny, Hollingsworth, Leno, Yee
          NO VOTE RECORDED:  Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8 

           ASSEMBLY FLOOR  :  Not relevant


           SUBJECT  :    Meal periods:  exemptions

           SOURCE  :     United Parcel Service


           DIGEST  :    This bill exempts employees in certain  
          industries from meal period laws if the employees are  
          covered by a collective bargaining agreement.

           Senate Floor Amendments  of 8/20/10 delete the reference to  
          the transportation industry" in reference to commercial  
          drivers.

           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  
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          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.  

          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; and

          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 in the following industries:

          1.Construction; 

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          2.Commercial drivers;
          3.Security officers employed by private patrol operators;  
            and
          4.Gas companies, electric companies, and publicly owned  
            utilities 

          Those employees are only exempted if they are covered by a  
          collective bargaining agreement, and that agreement:

          1.Expressly provides for the wages, hours of work, and  
            working conditions of employees, and expressly provides  
            for meal periods for those employees, 

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

          3.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.

           Background
           
          In 1999, AB 60 (Knox) became law, which 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) 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 or her employee is paid  
          the minimum wage.  

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          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.

          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 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  

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          obligation to ensure that such meal periods are actually  
          taken." (Emphasis added.) 

          This bill excludes commercial drivers and construction  
          employees covered by a collective bargaining agreement from  
          Labor Code 512, which would side-step the question of the  
          provision of a meal period for other employees in these  
          industries.

           Prior Legislation
           
          AB 2593 (Keene) 2005-06 Session, would have exempted  
          commercial drivers from meal period provisions.  This bill  
          was vetoed in 2005.  The Governor stated that he vetoed AB  
          2593 because it singled out a specific industry, and the he  
          felt it could imperil ongoing litigation.  This bill passed  
          the Senate Floor on 8/30/06 (38-0).

          AB 1734 (Koretz), Chapter 414, Statutes of 2005, 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.  This  
          bill passed the Senate Floor on 9/7/05 (36-3).

          AB 3018 (Koretz) of 2003-04 Session, 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.  This bill passed the Senate Floor on 8/26/04  
          (30-2).

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

           SUPPORT  :   (Verified  8/23/10)

          United Parcel Service (source) 
          AFA Chapter
          Associated General Contractors
          CAL SMACNA
          California Chapter of the National Electrical Contractors  
          Association
          California Fence Contractors Association
          California Legislative Conference of the Plumbing, Heating  

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          and Piping Industry CLC
          California-Nevada Chapter of Operating Engineers 
          Construction Employers' Association
          Engineering & Utility Contractors Association
          Engineering Contractors' Association 
          Flasher Barricade Association
          Marin Builders Association
          MV Transportation, Inc., Fairfield, CA
          National Electrical Contractors Association
          Southern California Contractors Association

           OPPOSITION  :    (Verified  8/23/10)

          Associated Builders and Contractors of California (Unless  
          Amended)
          California Employment Lawyers Association
          California Hospital Association (Unless Amended)
          California Manufacturers and Technology Association (Unless  
          Amended)
          California Nurses Association/National Nurses Organizing  
          Committee
          Department of Industrial Relations 
          National Federation of Independent Business (Unless  
          Amended)
          National Gypsum (Unless Amended)
          National Right to Work Committee
          USS-POSCO Industries (Unless Amended)

           ARGUMENTS IN SUPPORT  :    The supporters state 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.

          Associated General Contractors (AGC) argues that the  
          various interpretations of meal period 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  

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          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 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 specific industries 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 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 other meal period legislation that  
          applied to all employers.  
           

          PQ:nl  8/23/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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