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: 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 CONTINUED AB 569 Page 2 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; CONTINUED AB 569 Page 3 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. CONTINUED AB 569 Page 4 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 CONTINUED AB 569 Page 5 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 CONTINUED AB 569 Page 6 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 CONTINUED AB 569 Page 7 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 **** END **** CONTINUED