BILL ANALYSIS Ó AB 1313 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1313 (Allen) As Amended September 2, 2011 Majority vote ----------------------------------------------------------------- |ASSEMBLY: | |(June 2, 2011) |SENATE: |22-15|(August 20, | | | | | | |2012) | ----------------------------------------------------------------- (vote not relevant) Original Committee Reference: L. & E. SUMMARY : Makes the daily overtime requirements of current law that require overtime for hours worked in excess of eight in one workday applicable to agricultural employees, as specified. The Senate amendments change the author of the bill, delete the contents of the bill and instead eliminate 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 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 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. AS PASSED BY THE ASSEMBLY , this bill required the Agricultural Labor Relations Board (ALRB) and its general counsel to post on their web site specified information about open cases. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : In 1938, Congress passed the Fair Labor Standards Act (FLSA), which established minimum requirements with respect to AB 1313 Page 2 specified labor standards, including minimum wage and overtime. The overtime provisions of the FLSA were not extended to agricultural employees. However, as with all provisions of the FLSA, states are allowed to exceed the requirements laid out in the federal law. The issue of overtime for agricultural employees in California was first dealt with in 1941. Previously, the law had been silent on this subject. But in 1941 the Legislature exempted all agricultural employees from the statutory requirements of overtime, similar to the FLSA. This statutory exemption was retained when the 8-hour day was codified in 1999. This statutory exemption, however, did not prohibit the Industrial Welfare Commission (IWC) from legally promulgating overtime provisions beyond the traditional 8-hour standard of California law. Currently, the applicable wage order for agricultural employees requires the payment of overtime wages when an agricultural employee works longer than 10 hours in a single day, and more than six days during any workweek. With respect to meal periods, the applicable wage order provides that every employer shall "authorize and permit" agricultural employees to take a meal period after five hours of work. This language differs from the statutory meal period language applicable to other employees that prohibits an employer from employing a worker longer than five hours without "providing" a meal period. In addition, the wage order does not require a second meal period after the tenth hour of work (as the statute requires for other employees). This bill proposes to eliminate the statutory exemption for agricultural employees from overtime and meal periods, thereby making them subject to the general 8-hour day standard for overtime and the "provide" meal period standard, as well as the requirement for a second meal period after ten hours of work. Proponents argue that agricultural workers face increasingly difficult working conditions for very low pay. Proponents believe that agricultural employees should not be treated differently than other workers, and that the two-tiered overtime provisions are antiquated and should be abolished. Opponents argue that California already has the nation's most AB 1313 Page 3 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 lay off 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. This bill is identical to SB 1121 (Florez) from last session, which was vetoed by Governor Schwarzenegger. The Governor's veto message stated (in part): "Unfortunately, this measure, while well-intended, will not improve the lives of California's agricultural workers and instead will result in additional burdens on California businesses, increased unemployment, and lower wages. In order to remain competitive against other states that do not have such wage requirements, businesses will simply avoid paying overtime. Instead of working 10-hour days, multiple crews will be hired to work shorter shifts, resulting in lower take home pay for all workers. Businesses trying to compete under the new wage rules may become unprofitable and go out of business, resulting in further damage to our already fragile economy." This bill was substantially amended in the Senate and the Assembly-approved provisions of this bill were deleted. Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091 FN: 0004487