BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 889 (Ammiano)
Hearing Date: 8/16/2012 Amended: 7/12/2011
Consultant: Bob Franzoia Policy Vote: L&IR 5-1
_________________________________________________________________
____
BILL SUMMARY: AB 889 would regulate the wages, hours, and
working conditions of domestic work employees, provide a private
right of action for domestic work employees, including
liquidated damages, and would provide an overtime compensation
rate for domestic work employees. This bill would require
domestic work employers of persons engaged in household domestic
service to provide employees with information regarding their
wages either semimonthly or at the time of each wage payment,
and remove an exclusion for domestic work employers to secure
workers' compensation coverage for certain employees thereby
requiring all employers to secure the payment of workers'
compensation.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Elimination of wage and $231 to $770 annually
Special*
hour exemptions for
domestic work employees
* Labor Enforcement and Compliance Fund. This fund sunsets July
1, 2013.
_________________________________________________________________
____
STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
This bill would enact the Domestic Work Employee Equality,
Fairness and Dignity Act to regulate the wages, hours, and
working conditions of domestic work employees. This bill would
establish specific employment rights for domestic work employees
including:
- Right to overtime compensation.
(Labor Code 510 provides that eight hours of labor constitutes a
AB 889 (Ammiano)
Page 1
day's work. Any work in excess of eight hours in one workday
and any work in excess of 40 hours in any one workweek and the
first eight hours worked on the seventh day of work in any one
workweek shall be compensated at the rate of no less than one
and one-half times the regular rate of pay for an employee. Any
work in excess of 12 hours in one day shall be compensated at
the rate of no less than twice the regular rate of pay for an
employee. In addition, any work in excess of eight hours on any
seventh day of a workweek shall be compensated at the rate of no
less than twice the regular rate of pay of an employee. Nothing
in this section requires an employer to combine more than one
rate of overtime compensation in order to calculate the amount
to be paid to an employee for any hour of overtime work.)
- Right to meal and rest periods.
- A domestic work employee required to be on duty for 24 hours
or more shall have a minimum of eight hours of uninterrupted
sleep except in an emergency.
- A live-in domestic work employee shall not be required to work
more than five days in any one workweek without a day off. Work
in excess of this schedule shall be compensated with the
appropriate overtime.
- A live-in domestic work employee who is not required to be on
duty for 24 hours shall have 12 hours free of duty, of which a
minimum of eight are for uninterrupted sleep.
- Live-in domestic work employees and those who work for more
than 24 hours shall be provided sleeping accommodations that are
adequate and sanitary.
An employer shall pay $50 to the employee for each day the
employer violates these provisions. This bill also provides the
domestic work employee the option of enforcing a violation by
bringing a civil action. Filing an administrative or civil
complaint may be done up to three years from the time of the
violation. Additionally, a domestic work employee who prevails
in a civil action shall be entitled to legal or equitable relief
including liquidated (punitive) damages. Staff notes that
providing for liquidated damage appears to be unique in Labor
Code provisions relating to employees.
A domestic work employer shall permit a domestic work employee
who works five hours or more to choose the food he or she eats
and to prepare his or her own meals. A domestic work employer
is required to permit a domestic work employee to use the job
site's kitchen facilities and appliances without charge or
AB 889 (Ammiano)
Page 2
deduction from pay.
By various estimates, there are 60,000 to 200,000 domestic work
employees in the state. How many employees are employed by the
2,000 home care agencies in the state is unknown. Given the
number of domestic work employees whose wages, hours and
benefits would be governed by the provisions of this bill and
the possible violations, this analysis estimates there will be a
major increase in claims to the Division of Labor Standards
Enforcement (DLSE) in the Department of Industrial Relations.
Some information on possible number of claims can be found in
the report, Wage Theft and Workplace Violations in Los Angeles,
Institute for Research on Labor and Employment, UCLA 2010. The
report noted child care workers (highest at 74.9 percent),
garment workers (60.1 percent) and maids and housekeepers (35
percent) had high rates of minimum wage violations. Home health
care workers had a violation rate of 20.4 percent. As the
report noted, high rates are not surprising since flat weekly or
flat daily pay rates, by definition, do not vary with hours
worked. The reported noted high overtime, meal break and
off-the-clock violation rates (though it does not appear those
rates were separated by child care worker, maids and
housekeepers, and home health care workers).
Staff notes Industrial Welfare Commission Wage Order 15 applies
to Household Occupations which is defined as all services
related to the care of persons or maintenance of a private
household or its premises by an employee of a private
householder. Under Wage Order 15, personal attendants are
defined as including:
babysitters and means any person employed by a private
householder or by any third party employer recognized in the
health care industry to work in a private household, to
supervise, feed, or dress a child or person who by reason of
advanced age, physical disability, or mental deficiency needs
supervision.
Personal attendants are completely exempt from the general
overtime requirements, meal and rest break requirements and
other provisions of Wage Order 15. Therefore, personal
attendants are only required to be paid straight-time for all
hours worked, regardless of whether they work more than eight
hours in a day or 40 hours in a week.
AB 889 (Ammiano)
Page 3
In 2010, there were 1,175 DLSE investigations completed and
decisions rendered. The Retaliation Complaint Unit has 15
investigators with an average caseload of 78 cases. An
investigator in the unit has a Deputy Labor Commissioner I
classification I ($4,357 - $5,631, total compensation $76,966
annually). In 2009, the Bureau of Field Enforcement reported
1,766 citations for workers compensation, 71 for minimum wage,
and 95 for overtime violations in a variety of industries. For
purposes of illustration, if one Deputy Labor Commissioner l
could handle 200 claims annually, each 200 claims would require
one DLC I at a cost of $76,966. If one percent (600 to 2,000)
of domestic work employees filed a claim, estimated costs would
range between $230,898 (3 x $76,966) to $769,660 (10 x $76,966).
As part of the state government trailer bill Chapter 12/2009 (AB
12x4, Evans), the Director of Industrial Relations would be
authorized to levy a separate surcharge upon all employers, as
defined, for the purposes of deposit in the newly created Labor
Enforcement and Compliance Fund. Chapter 12 requires that the
total amount of the surcharges be allocated between employers in
proportion to payroll respectively paid in the most recent year
for which payroll information is available. The surcharge
levied shall not exceed $37,000,000 in the 2009-10, adjusted for
as appropriate to reconcile any over/under assessments from
previous fiscal years, and shall not be adjusted each year
thereafter by more than the state-local government deflator*.
The cap of $37,000,000 represents the amount expended by the
DSLE in 2008-09 for the enforcement of wage and hour violations.
Given the potential enforcement costs associated with this
bill, it may become necessary to apply the deflator which, to
date, has not been applied.
Currently, employers of domestic work employees must carry
workers' compensation insurance. This bill would remove the
exemption from workers compensation for domestic work employees
who work less than 52 hours in a 90 day period provided by Labor
Code 3352 (h). Some employers (private residence employers) of
domestic work employees cover their workers' compensation
insurance obligation through homeowner insurance. It appears
all domestic work employers could continue to secure workers
compensation through homeowner insurance (Insurance Code 11590).
If the provisions of this bill required employers of domestic
work employees to purchase the workers compensation insurance
AB 889 (Ammiano)
Page 4
from a state approved workers compensation carrier, this may
result in many new policies being purchased at the minimum
policy rate. Additionally, all employers will be required to
provide specific written workers' compensation information to
all employees. It is unclear if employers who hire residential
domestic work employees for their household will be sufficiently
knowledgeable to provide the required information to avoid
penalty situations. (Existing law requires employers furnish
employees with an accurate itemized written statement at the
time of each payment of wages that shows, among other things,
the name of the employee, his or her gross and net wages earned,
the total hours worked, and all deductions. Pursuant to Labor
Code 226 (d), this requirement does not apply to any employer of
a person employed by the owner of a residential dwelling under
specified conditions including duties incidental to the
ownership of the dwelling and not in the course of the business
of the employer. This bill would remove that exemption and
require that an employer shall pay $50 to the employee for each
day the employer violates this section.)
The current State Compensation Insurance Fund (SCIF) rate for a
private residence employee classification is $2,050 (per
employee per year). This assumes minimum wage of $16,640
annually and no overtime. If a private residence employer
determines that the provisions of this bill make the hiring of
three full time employees as more cost effective and reduces or
eliminates potential violations for rest periods, meal periods,
etc., the private residence employer's workers' compensation
rate could increase to $6,150 for the private residence employee
classification. These rates for an employer of five full time
(minimum wage) employees would increase to $10,250.
If greater that minimum wage is paid, or overtime is paid, to
domestic work employee, there would be much greater divergence
between the private residence employee classification and the
other classifications. If the employer were to go to an
outsourcing agency for domestic help, the homemaker services
classification ($2,329 - $14.00 per $100 of payroll) or the
building operation classification ($3,204) would most likely
apply.
By one estimate, half of all domestic work employees are on duty
for 24 hours. While it is difficult to estimate how employer
may respond to the provisions of this bill, it would appear
AB 889 (Ammiano)
Page 5
every such arrangement, where there is no sleep agreement, will
necessitate the hiring of a second employee. Employers may
determine that three eight hour employees is the appropriate
option, which may decrease wage compensation for some employees.
It may increase compensation for some employees. For a
homeowner with one employee (under this bill if that employee is
providing 24 hour care without a sleep agreement), that employee
could receive generally a minimum compensation of $8 for 8
hours, $12 for 4 hours and $16 for 12 hours for a total of $256,
an increase of $64 a day over straight minimum wage.
For all other employers, the impact is unclear. Would the
provisions of this bill, force employers (private residence
employers, home care agencies, etc.) "underground" or would the
existence of clear monetary penalties and potential civil action
increase compliance and reduce violations. Penalties could
alter the way employers schedule employee meal and sleep periods
and respond to emergency situations. If a homecare agency can
hire sufficient employees, the agency will have to balance
potentially lower employee compensation costs against
significant higher workers' compensation and unemployment
insurance costs and possible litigation costs.
The proposed amendments are
Labor Code 1451 (b) (2) (C) Any person under 18 years of age who
is employed as a babysitter for a minor child of the domestic
work employer in the employer's home.
(G) Any person licensed to provide child care pursuant to
Chapters 3.4 (commencing with Section 1596.70), 3.5 (commencing
with Section 1596.90) or 3.6 (commencing with Section 1597.30)
of Division 2 of the Health and Safety Code.
(H) Any person who is employed by a health care system which
includes facilities, at least one of which is an acute care
hospital, that are related through common ownership or
affiliation with the acute care hospital, that are related
through common ownership or affiliation with the acute care
hospital, within the meaning of Corporations Code Sections 150
and 5031, and predating the adoption of this section. Employees
who are employed by entities that contract with a health care
system to provide domestic work, and are not commonly owned or
affiliated with an acute care hospital are not exempt from this
AB 889 (Ammiano)
Page 6
article.
For domestic work employees performing work for a third party
employer recognized in the health care industry, and commonly
owned by or affiliated with a health care system, this exemption
applies when the common ownership or affiliation predates the
adoption of this section and the third party employer is a home
health agency licensed by the Department of Public Health
providing services to patients of the health care system.
(I) Any person employed as a casual babysitter for a minor child
in the employer's home. A casual babysitter is a person whose
employment is irregular or intermittent and who does not work
more than six hours per week caring for the same minor child or
children.
(c) (2) (A) The State of California or individuals who receive
domestic work services through the In Home Supportive Services
program under Article 7 (commencing with Section 12300) of
Chapter 3 of Part 3 of Division 9 of the Welfare and
Institutions Code. Individuals who meet the income eligibility
for the In-Home Supportive Services are not within the scope of
"domestic work employer whether receiving services through that
program or hiring additional personal attendant services outside
that program.
(g) "Personal attendant" includes babysitters and means a person
employed by a private householder or by any third party employer
recognized in the health care industry to work in a private
household, to supervise, feed, or dress who performs domestic
work related to the supervision, feeding, or dressing of a child
or other person who, by reason of advanced age, physical
disability, or mental deficiency, needs supervision. Personal
attendant includes babysitters. The status of "personal
attendant" shall apply when applies if no significant amount of
work other than the foregoing is required.
1453 (b) Upon prevailing, a domestic work employee bringing an
action pursuant to this section shall be entitled to any legal
or equitable relief permitted by law as may be appropriate to
remedy the violations. violation, including the payment of any
back wages unlawfully withheld, the payment of an additional sum
as liquidated damages or penalties as specified in this part,
reinstatement of employment, interest, or injunctive relief, or
AB 889 (Ammiano)
Page 7
any combination of these remedies, as appropriate. A domestic
work employee bringing a civil action pursuant to this section
shall also be entitled to recover an award of reasonable
attorney's fees and costs, including expert witness fees.
1454 Except where otherwise provided in this chapter, Section
510 applies to a domestic work employee.
1455. (a) A domestic work employee shall be paid for all hours
worked pursuant to Section 510 who is required to be on duty for
24 consecutive hours or more shall have a minimum of eight
consecutive hours for uninterrupted sleep, except in an
emergency . A domestic worker employee shall have established on
duty hours for every day of work. An employer cannot require a
domestic work employee to remain on the premises during nonwork
hours unless otherwise permitted by this section. This
subdivision applies to live-in and non live-in domestic work
employees.
(b) If a (1) A domestic work employee who is a personal
attendant may be is required to be on duty for 24 consecutive
hours or more, the domestic work employer and the domestic work
employee may agree in writing remain on the work premises more
than 12 hours in a day only if there is a written agreement
between the domestic work employer and the personal attendant
and the personal attendant is compensated for these hours to
exclude a bona fide regularly scheduled sleeping period of not
more than eight hours for uninterrupted sleep from hours worked ,
provided that the domestic work employer otherwise complies with
this section and Section 1457. If no written agreement to the
contrary pursuant to subdivision (c) is present, the personal
attendant shall be entitled to pay for all hours the worker is
required to remain on the premises eight hours of sleeping time
shall constitute hours worked .
(c) Notwithstanding subdivisions (a) and (b), when a personal
attendant lives on the employer's premises or is required to
remain on premises for 24 hours or more, the employer and the
personal attendant may agree in writing to exclude not more than
eight hours from hours worked, provided the employer complies
with Section 1457. This period is non work time, during which
the employee may sleep. Except in an emergency, if this period
is interrupted by a call of duty, and the employee cannot get at
least seven hours of uninterrupted time, the entire period will
AB 889 (Ammiano)
Page 8
constitute hours worked and must be compensated. If
interruption is due to an emergency, only the time worked will
be compensated.
(c) There is a rebuttable presumption that a domestic work
employee did not receive eight consecutive hours for
uninterrupted sleep if he or she is required to be on duty for
24 consecutive hours or more and the domestic work employer does
not hire a replacement worker for at least eight consecutive
hours in the 24-hour work period.
(d) A domestic work employer shall pay a sum of fifty dollars
($50) to the domestic work employee for each day that the
domestic employer violates this section the wage requirement,
including (c) of this section.
1456. (a) A live-in domestic work employee who is not required
to be on duty for 24 consecutive hours or more shall have at
least 12 consecutive hours free of duty during each workday of
24 hours, of which a minimum of eight consecutive hours are for
uninterrupted sleep. A live-in domestic work employee suffered
or permitted to work during the 12 consecutive off-duty hours
shall be compensated in accordance with Section 510.
(b) (a) A live-in domestic work employee shall not be required
to work more than five days in any one workweek without a day
off of not less than 24 consecutive hours, except in an
emergency. A live-in domestic work employee who is suffered or
permitted to work in excess of five workdays in any workweek
shall be compensated in accordance with Section 510.
(c) (b) A domestic work employer shall pay a sum of fifty
dollars ($50) to the domestic work employee for each day that
the domestic work employer violates the wage requirements of
this section.
1460. (a) A domestic work employer shall permit a domestic work
employee who works five hours or more to choose the food he or
she eats and to prepare his or her own meals. A domestic work
employer shall permit a domestic work employee to use the job
site's kitchen facilities and kitchen appliances without charge
or deduction from pay. If a domestic worker is informed that a
person in the household has bona fide health issues, including
but not limited to food allergies, or has religious or dietary
AB 889 (Ammiano)
Page 9
restrictions which make presence of some food unacceptable, the
employee shall not eat or prepare such foods in the kitchen.
The domestic work employer shall ensure that the employee is
informed about any food restrictions in a language that the
employee understands.