BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1121
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          Date of Hearing:   June 23, 2010

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                                Sandre Swanson, Chair
                 SB 1121 (Florez) - As Introduced:  February 18, 2010

          SENATE VOTE  :   23-12
           
          SUBJECT  :   Overtime wages: agricultural workers.

           SUMMARY:  This bill deletes the overtime pay and meal period  
          exemptions for agricultural workers.  Specifically, this bill  
          deletes the provision of the Labor Code that exempts  
          agricultural employees from the following:

          1)Overtime compensation when an individual works in excess of  
            eight hours in one workday or work in excess of 40 hours in  
            any one workweek:

          2)A mandatory 30 minute meal break before the start of the fifth  
            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.  

          3)A second mandatory 30 minute meal break after ten hours of  
            work that can be waived by the mutual consent of the employer  
            and employee, if the work period is no more than 12 hours, and  
            the first meal period was not waived. 

           EXISTING FEDERAL LAW  :

          1)Establishes the Fair Labor Standards Act (FLSA), which sets  
            minimum wage, overtime pay, recordkeeping, and youth  
            employment standards affecting full-time and part-time workers  
            in the private sector and federal, state and local  
            governments.

             a)   Exempts, from minimum wage and overtime pay  
               requirements, farm workers employed by anyone who used no  
               more than 500 "man-days" of farm labor in any calendar  
               quarter of the preceding calendar year.

             b)   Exempts farm workers from overtime pay. 

          2)Establishes the Migrant and Seasonal Agricultural Worker  








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            Protection Act to protect migrant and seasonal agricultural  
            workers in their interactions with farm labor contractors,  
            agricultural employers, agricultural associations and  
            providers of migrant housing.

           EXISTING STATE LAW  exempts persons employed in an agricultural  
          occupation, as defined in the Industrial Welfare Commission  
          Order number 14-80 (Revised), from overtime pay and meal period  
          requirements.  

           FISCAL EFFECT  :   Unknown



           COMMENTS  :   

          In 1941 the state Legislature exempted all agricultural  
          employees from the statutory requirements of overtime, in a  
          manner similar to the FLSA.  For the succeeding 58 years, this  
          overtime exemption remained largely unchanged until it was  
          indirectly extended to meal periods in 1999.  

          The current exemption, however, did not prohibit the Industrial  
          Welfare Commission (IWC) from legally instituting overtime  
          provisions that allow employees to work beyond the eight-hour  
          day limit.  Currently, IWC Wage Order number 14-80 (wage order  
          14-80), revised January 1, 1998, requires the payment of  
          overtime wages when an agricultural employee works longer than  
          10 hours in a single day, and no more than six days during any  
          workweek..  Wage order 14-80 also requires a meal period after  
          the fifth hour of work, but unlike statute is silent on a second  
          meal period after the tenth hour of work.  

          According to a 1998 California Research Bureau (CRB) report  
          entitled "Farm Workers in California" (CRB Report), California  
          is the nation's largest agricultural state, producing more than  
          250 different crops valued at nearly $25 billion dollars.  While  
          farm workers play a significant role State's most important  
          industries, they also face difficult working conditions  
          including low earnings, poor or no health benefits, substandard  
          housing, physically taxing and sometimes unsafe work conditions,  
          and long hours.  The CRB Report notes that the majority of farm  
          workers work nine or more months during the year and work 46  
          hours or more per week. 









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           Agricultural Worker Income
           
          According to California's Agricultural Employment, a report  
          produced by the Employment Development Department (EDD Report)  
          in 2008, California's agricultural labor force was is comprised  
          of 372,600 workers.  The EDD Report states that 48.6 percent of  
          those workers reported annual family income of less than  
          $35,000.  One out of every eight agricultural workers reported  
          annual income of less than $15,000. In contrast, the EDD Report  
          notes, 21 percent of nonagricultural workers reported an annual  
          family income of less than $35, 000 and only 5.6 percent, or one  
          in 20, reported annual family income of less thank $15,000.   

          The EDD Report states that over 61.8 percent of California's  
          agricultural workers earned $10 an hour or less in 2008; with  
          37.6 percent earning the State's $8 minimum wage.  The report  
          also notes that 23.8 percent of agricultural workers earned  
          between $10.1 and $15 an hour, 14.4 percent earned more than $15  
          an hour, and 8.6 percent earned more than $20 per hour.  Between  
          2006 and 2008, the minimum wage rose from $6.75 an hour to $8 an  
          hours. 

          According to the EDD Report, farm laborers tend to be the lowest  
          paid agricultural workers.  In 2008, 86.7 percent of California  
          agricultural workers who earned $10 or less worked in farming,  
          fishing, and forestry occupations.  In 2001, the National  
          Agricultural Workers Survey notes that 30 percent of all farm  
          workers have family incomes below the poverty line.  The average  
          individual income range was $10,000 to $12, 499 while the  
          average family income range was between $15,000 and $17,499. 




           ARGUMENTS IN SUPPORT  :

          In support of the bill, the California Applicants' Attorneys  
          Association argues that the current exemption from overtime pay  
          is based on an obsolete 70 year old federal provision.  They  
          assert that this bill is a simple matter of fundamental  
          fairness.  The California Labor Federation writes that  
          California has long supported its agricultural industry with  
          considerable public subsides and investment.  They assert that  
          it is time for the State to support the people whose work in the  
          fields makes the California agricultural industry among the  








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          world's most productive and profitable.  The California Rural  
          Legal Assistance Foundation writes that this bill will extend to  
          farm workers the same overtime protections enjoyed by millions  
          of other California workers and provide, for the first time,  
          weekly day of rest requirement.  They state that this bill will  
          bring and end to a sorry chapter of agricultural exceptionalism  
          in California law as it relates to wage and hour conditions that  
          affect hundreds of thousands of farm workers. 

           ARGUMENTS IN OPPOSITION  :

          Opponents note that agriculture is critically affected and  
          dependent on weather conditions and the seasonality of  
          agricultural production, and opponents argue that this requires  
          greater flexibility in scheduling work than other industries,  
          which is currently reflected in both federal and state labor  
          laws.  Opponents also argue that California already has the  
          nation's most progressive labor protections for agricultural  
          production, and that no other state currently requires overtime  
          once agricultural workers have exceeded the 40 hour work week.   
          Moreover, opponents argue that due to razor-thin profit margins,  
          farmers will be forced to cut hours and layoff employees if they  
          face an increase in labor costs.  Opponents believe that this  
          will hurt the California economy, as agriculture has aided the  
          state's recovery during the current economic downturn, as well  
          as place the state's agricultural industry at a competitive  
          disadvantage.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          California Applicants' Attorneys Association
          California Communities United Institute
          California Conference Board of Amalgamated Transit Union
          California Conference of Machinists
          California Employment Lawyers Association
          California Labor Federation, AFL-CIO
          California Nurses Association/ National Nurses Organizing  
          Committee
          California Rural Legal Assistance Foundation
          California Teamsters Public Affairs Council
          Consumer Attorneys of California
          Engineers & Scientists of California, IFPTE, Local 20
          Food Empowerment Project








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          International Longshore & Warehouse Union
          Jockeys' Guild
          Numerous Individuals
          Professional & Technical Engineers, IFPTE, Local 21
          United Food & Commercial Workers Western States Council
          UNITE-HERE
          Utility Workers Union of America, Local 132

           Opposition 
           
          Agricultural Council of California
          Alliance of Western Milk Producers
          Allied Grape Growers
          California Association of Nurseries and Garden Centers
          California Association of Wheat Growers
          California Association of Winegrape Growers
          California Bean Shippers Association
          California Chamber of Commerce
          California Citrus Mutual
          California Farm Bureau Federation
          California Grain and Feed Association
          California Grape and Tree Fruit League
          California Pear Growers Association
          California Producer Handler Association
          California Seed Association
          California State Floral Association
          California Warehouse Association
          California Women for Agriculture
          Family Winemakers of California
          Grower-Shipper Association of Central Californoa
          Grower-Shipper Vegetable Association of Santa Barbara and San  
          Luis Obispo Counties
          Nisei Farmers League 
          Pacific Coast Renderers Association
          Pacific Egg & Poultry Association
          Rockview Dairy 
          Ventura County Agricultural Association
          Western Agricultural Processors Association
          Western Growers
          Western United Dairymen
          Wine Institute

           Analysis Prepared by  :    Shannon McKinley / L. & E. / (916)  
          319-2091