BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 435
Author: Padilla (D)
Amended: 8/22/13
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-1, 4/10/13
AYES: Lieu, Leno, Padilla, Yee
NOES: Wyland
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 25-11, 5/2/13
AYES: Beall, Block, Calderon, Corbett, Correa, De León,
DeSaulnier, Evans, Galgiani, Hancock, Hernandez, Hill, Hueso,
Jackson, Lara, Leno, Lieu, Liu, Monning, Padilla, Pavley,
Price, Steinberg, Wright, Yee
NOES: Anderson, Berryhill, Emmerson, Fuller, Gaines, Huff,
Knight, Nielsen, Roth, Walters, Wyland
NO VOTE RECORDED: Cannella, Wolk, Vacancy, Vacancy
ASSEMBLY FLOOR : 54-23, 9/4/13 - See last page for vote
SUBJECT : Compensation: piece-rate workers: rest and
recovery periods
SOURCE : California Rural Legal Assistance Foundation
Teamsters Public Affairs Council
DIGEST : This bill enacts provisions of law related to
recovery periods, as specified.
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Assembly Amendments eliminate all the provisions related to
piece-rate and limit this bill to the provisions related to
recovery periods.
ANALYSIS :
Existing law establishes, within the Department of Industrial
Relations (DIR), the following entities:
1.Industrial Welfare Commission (IWC): to regulate employee
wages, hours and working conditions.
2.Division of Occupational Safety and Health (Cal/OSHA): tasked
with the responsibility of protecting workers and the public
from safety hazards through its various programs.
3.Occupational Safety and Health Standards Board (OSHSB): to
adopt reasonable and enforceable standards at least as
effective as federal standards.
4.Division of Labor Standards Enforcement: to adjudicate wage
claims, investigate discrimination and public works
complaints, and enforce Labor Code (LAB) and IWC wage orders.
Existing law, with certain exceptions, defines a day's work as
eight hours of labor. Any additional hours worked in excess of
eight hours in one day, or a 40-hour workweek, must be
compensated with the payment of overtime.
Regarding meal and rest periods, existing law requires the
following:
1.Meal periods . An employer may not employ a worker for a
period of more than five hours per day without providing the
employee with a meal period of not less than 30 minutes,
except that if the total work period per day is no more than
six hours, the meal period may be waived by mutual consent of
both parties. A second 30 minute meal period is required if
an employee works more than 10 hours per day, except if total
hours worked is no more than 12, the second meal period may be
waived by mutual consent only if the first meal period was not
waived.
2.Rest periods . IWC wage orders require that employers
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authorize and permit nonexempt employees to take a rest period
that must, insofar as practicable, be taken in the middle of
each work period. The rest period is based on the total hours
worked and must be at the minimum rate of a net 10 consecutive
minutes for each four hour work period, or major fraction
thereof. A rest period is not required for employees whose
total daily work time is less than 3.5 hours. According to
the IWC wage orders, authorized rest periods are counted as
time worked and therefore, must be paid by the employer.
Under existing law, no employer shall require any employee to
work during any meal or rest period mandated by an applicable
order of the IWC. If an employer fails to provide an employee a
meal period or rest period in accordance with an applicable
order of the IWC, the employer shall pay the employee one
additional hour of pay at the employee's regular rate of
compensation for each work day that the meal or rest period is
not provided.
This bill enacts provisions of law related to recovery periods,
as specified. Specifically, this bill:
1. Provides that, in addition to meal and rest periods, an
employer shall not require any employee to work during any
"recovery period" mandated by any applicable statute,
regulation, standard or order of OSHSB or Cal/OSHA.
2. Defines a "recovery period" as a cool-down period afforded an
employee to prevent heat illness.
3. Provides that an existing provision of law that requires an
employer to pay an employee one additional hour of pay at the
employee's regular rate of compensation for each work day
that a meal or rest period is not provided also applies to
work days that a "recovery period" is not provided.
4. Provides that these provisions do not apply to an employee
who is exempt from meal or rest or recovery period
requirements pursuant to other state laws, as specified.
Comments
Rest period requirements in statute, standards and iwc wage
orders . Each of the 17 IWC wage orders includes a section on
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rest period requirements - authorizing non-exempt employees to
take a rest period at a rate of 10 minutes per four hours or
major fraction thereof. According to the IWC Wage Orders,
authorized rest period time shall be counted as hours worked for
which there shall be no deduction from wages.
In addition to the IWC wage orders and LAB Section 226.7, the
Heat Illness Prevention regulations established by the OSHSB
have an additional requirement regarding a rest period
applicable to all outdoor places of employment. Since August
2005, employers in the State of California have been required by
regulation to protect outdoor employees from the hazard of heat
illness. This regulation was promulgated in response to
unusually hot summer temperatures over a wide area of the state
which led to a greatly elevated number of cases of serious heat
illness in the workplace, including a number of deaths. This
regulation, codified at Title 8 California Code Regulations
Section 3395, came about first by adoption of an emergency
temporary standard and was followed by adoption of a permanent
standard in 2006. Under these regulations, employees are
allowed and encouraged to take a cool-down rest in the shade for
a period of no less than five minutes at a time when they feel
the need to do so to protect themselves from overheating.
Prior Legislation
SB 1538 (Alarcon, 2004) would have required employers to pay
employees for any rest period mandated by statute, regulation,
or order of the IWC and would have established the formula by
which the rate of pay would have been determined for the rest
periods of piece-rate workers in the agricultural and garment
industries, as specified. The bill was vetoed by Governor
Schwarzenegger.
AB 755 (De La Torre, 2005), almost identical to SB 1538, did not
enumerate the formula that would have been used to determine the
rate of pay of piece-rate workers, but rather states that it be
the "average piece-rate" wage. The bill vetoed by Governor
Schwarzenegger.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 9/4/13)
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California Rural Legal Assistance Foundation (co-source)
Teamsters Public Affairs Council (co-source)
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Teamsters Public Affairs Council
Engineers and Scientists of California, International Federation
of Professional and Technical Engineers Local 20
International Longshore and Warehouse Union
National Lawyers Guild Labor and Employment Committee
Professional and Technical Engineers, International Federation
of Professional and Technical Engineers Local 21
United Farm Workers
United Food and Commercial Workers Western States Council
UNITE-HERE, AFL-CIO
Utility Workers Union of America, Local 132
OPPOSITION : (Verified 9/4/13)
Air Conditioning Trade Association
California Framing Contractors Association
California Professional Association of Specialty Contractors
California Retailers Association
National Federation of Independent Business
Plumbing-Heating-Cooling Contractors Association of California
Western Electrical Contractors Association
ARGUMENTS IN SUPPORT : According to proponents, this bill will
clarify how paid rest breaks and recovery periods are to be
compensated by employers when employees are paid on a piece-rate
basis. Proponents argue that piece-rate workers, unlike their
hourly or salaried counterparts, are often induced to work
through their rest or recovery periods because they suffer a
loss of income. They believe this bill is necessary to increase
incentives for piece-rate workers to actually take their rest
and heat stress recovery periods rather than "willingly" working
through them to avoid losing money.
According to the co-sponsor of this bill, California Rural Legal
Assistance Foundation (CRLAF), a 2004 CRLAF survey of more than
1,000 piece-rate farm workers laboring in the raisin harvest,
found that more than 70% of workers "voluntarily" worked through
rest periods to avoid losing money. Nearly two-thirds of them
said they would be "more likely" to take rest periods if they
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were paid their average piece-rate earnings during that time.
CRLAF argues that it is significant that these results were
obtained from surveying workers in Central Valley raisin
harvests where triple digit temperatures have resulted in farm
worker deaths from heat stress. They argue that while not all
piece-rate workers potentially face a life or death decision
when they are not given their rest periods, compliance by
employers with these important state policies should not be so
insidiously undermined by the manner in which workers are paid.
ARGUMENTS IN OPPOSITION : The opponents argue that this bill
will threaten a new wave of destructive and costly litigation to
California employers by including exempt employees under the
one-hour penalty for failure of an employer to provide a meal or
rest period. According to the opponents, for over 10 years,
California employers suffered as a result of class action
litigation regarding the meaning of the term "provide" with
regard to meal and rest periods for hourly, non-exempt
employees. With this bill, the opponents are concerned that the
penalty provision of LAB Section 226.7 would be significantly
expanded to include exempt employees by making the penalty
available to not just those employers that fail to comply with
the IWC wage orders, but also to any employer who fails to
comply with statutory meal and rest period requirements in LAB
Section 512.
Additionally, the opponents contend that, as exempt employees,
employers do not track such employees' time, thereby making it
extremely difficult for employers to adequately and fairly
defend themselves in litigation. The opponents also argue that
the proposed definition of piece-rate is also extremely broad,
as it could include exempt employees who are paid, in part, a
production bonus based upon a specific unit of time, number of
items sold, or even certain amount of sales. Furthermore, they
argue that this bill could significantly increase costs for
employers who have employees with mandated periods of rest that
could be characterized as "recovery periods" subject to
compensation. For example, IWC Wage Order No. 5-2001 mandates
that an employee who works 24 consecutive hours must receive at
least eight hours of off-duty time. It also states that an
employee's time spent sleeping is not considered hours worked.
Opponents are concerned, that this bill will potentially
transform such time spent sleeping or the mandated 8 hours of
off-duty time as compensable, as a "recovery period."
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ASSEMBLY FLOOR : 54-23, 9/4/13
AYES: Alejo, Ammiano, Atkins, Bloom, Bocanegra, Bonilla, Bonta,
Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau,
Chesbro, Cooley, Daly, Dickinson, Eggman, Fong, Fox, Frazier,
Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray, Hall,
Roger Hernández, Holden, Jones-Sawyer, Levine, Lowenthal,
Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V.
Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Weber, Wieckowski, Williams, Yamada, John A.
Pérez
NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle,
Donnelly, Beth Gaines, Grove, Hagman, Harkey, Jones, Linder,
Logue, Maienschein, Mansoor, Morrell, Nestande, Olsen,
Patterson, Wagner, Waldron, Wilk
NO VOTE RECORDED: Melendez, Vacancy, Vacancy
PQ:ek 9/5/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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