BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 67|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 67
Author: Gonzalez (D), et al.
Amended: 8/3/16 in Senate
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 3-1, 6/8/16
AYES: Mendoza, Leno, Mitchell
NOES: Stone
NO VOTE RECORDED: Jackson
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 43-32, 1/27/16 - See last page for vote
SUBJECT: Double Pay on the Holiday Act of 2016
SOURCE: United Food & Commercial Workers
DIGEST: This bill enacts the Double Pay on the Holiday Act of
2016 requiring a grocery or retail store establishment employer
to pay two times the regular rate of pay to an employee for work
on Thanksgiving Day. This bill defines grocery store
establishment and retail store establishment and, among other
things, specifies that a retail store establishment does not
include a retail store located in an amusement park.
Senate Floor Amendments of 8/3/16 further clarify the exemption
of amusement parks by specifying that "retail store
establishment" does not include a retail store establishment
located in an amusement park or in a retail, dining, and
entertainment area under common control of the amusement park.
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ANALYSIS:
Existing law:
1)Defines a full workday as eight hours of labor, and 40 hours
as a workweek. Any additional hours worked must be compensated
with the payment of overtime wage rates. (Labor Code §510)
2)Requires the payment of overtime compensation as follows:
a) Work in excess of eight hours a day, and over 40 hours
in a workweek, and the first eight hours worked on the
seventh day of a workweek shall be compensated at the rate
of no less than 1 times the regular pay rate.
b) 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.
c) 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 pay rate.
3)Provides that the overtime compensation requirements do not
apply to certain executive, administrative and professional
employees that meet specified criteria for exemption.
4)States that any person who violates these overtime wage
provisions is guilty of a misdemeanor.
This bill:
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1)Enacts the Double Pay on the Holiday Act of 2016 requiring any
work performed at a retail or grocery store establishment on a
family holiday to be compensated at no less than twice the
employee's regular rate of pay.
2)Defines "family holiday" as the fourth Thursday of November of
each year.
3)Defines "retail store establishment" as a physical store
within the state with more than 50 percent of its revenue
generated from merchandise subject to the state's sales and
use taxes, including, but not limited to, electronics,
appliances, clothing, furniture, sporting goods, health and
personal products. A "retail store establishment" includes a
retail food facility, if the retail food facility is located
within a retail store establishment. A "retail store
establishment" does not include a retail store establishment
located in an amusement park, hotel, movie theater, a new
motor vehicle dealer, as defined, or a ski resort.
4)Defines "grocery store establishment" as a physical store
within the state that sells primarily household foodstuffs for
offsite consumption, including, but not limited to, the sale
of fresh produce, meats, poultry, fish, deli products, dairy
products, canned foods, dry foods, beverages, and baked or
prepared foods. Other household supplies or products are
secondary to the primary purpose of food sales. A "grocery
store establishment" includes a separate retail food facility
that is located within a grocery store establishment and
primarily sells food for onsite consumption. A "grocery store
establishment" does not include a store that occupies 5,000
square feet or less of floor space and that sells
transportation fuels in conjunction with, and at the same
physical location as, household foodstuffs for offsite
consumption.
5)Provides that "employee" does not include the following:
a) An employee covered by a valid collective bargaining
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agreement that meets specified criteria, including the
payment of holiday premium pay and a regular hourly rate of
pay of not less than 30 percent more than the state minimum
wage.
b) An employee who is exempt from the payment of overtime
under the executive, administrative, and professional
employee exemption under current law.
c) An employee who is employed by an employer with 500 or
fewer employees.
6)Specifies that these provisions do not apply to a retail food
facility unless it is a grocery store establishment, or is
located within a retail store establishment, or is located
within a grocery store establishment and primarily sells food
for onsite consumption.
7)Specifies that "retail food facility" has the same meaning as
in Section 113789 of the Health and Safety Code.
Background
Black Friday, the day following Thanksgiving Day in the United
States, and the sales that many stores offer to entice customers
has set the beginning of the holiday shopping season in motion
for many decades. Black Friday has routinely been the busiest
shopping day of the year; with stores opening their doors to
customers as early as 4:00am. However, in recent years there
has been a changing trend of starting the Black Friday specials
early - on Thanksgiving Day. Several large retailers have
started opening their doors as early as 5:00pm on Thanksgiving
Day and staying open overnight in an attempt to appeal to the
sale seeking shoppers.
Although appealing to many, these retail practices come with
several consequences including that of making high demands on
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staff who are needed in order to keep such long open hours, and
especially for those required to work on Thanksgiving Day.
Additionally, both customers and employees face health and
safety risks due to insufficient staff for the high number of
consumers walking in the door. Even as many stores stretch
their hours into the holiday, there has been some push back from
several retailers who have decided to do the opposite and close
their stores completely on Thanksgiving Day giving their
employees the opportunity to spend the day with their families
and friends for the holiday.
Need for the bill? California law does not require that an
employer provide its employees with paid holidays, that it close
its business on any holiday, or that employees be given the day
off for any particular holiday. Hours worked on holidays,
Saturdays, and Sundays are treated like hours worked on any
other day of the week. Employers are free to create their own
policies regarding holidays and can choose to give their
employees time off from work with pay, but nothing in the law
requires such a practice. Additionally, there is nothing in the
law mandating that an employer pay an employee a special premium
for work performed on a holiday, Saturday, or Sunday, other than
the overtime premium required for work performed in excess of
eight hours in a workday or 40 hours in a workweek.
According to the author, the recent trend of Black Friday
shopping deals spreading into the Thanksgiving holiday is
forcing workers to miss out on celebrating the holiday and
spending time with their families in order to keep their jobs.
In some cases, this work has become mandatory and as such, the
author believes that employees should be fairly compensated for
the undue hardships associated with working on the traditional
family holiday. This bill requires retail and grocery store
employers to pay at least two times the regular rate of pay to
an employee for work on Thanksgiving Day.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
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SUPPORT: (Verified8/4/16)
United Food & Commercial Workers, Western States Council
(source)
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Employment Lawyers Association
California Immigrant Policy Center
California Labor Federation
California Nurses Association
California School Employees Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Teamsters Public Affairs Council
Communication Workers of America, District 9
Engineers & Scientists of California
Professional & Technical Engineers
UNITE HERE, AFL-CIO
International Longshore & Warehouse Union
United Farm Workers
Utility Workers Union of America
Western States Council of Sheet Metal Workers
OPPOSITION: (Verified8/4/16)
Agricultural Council of California
Alhambra Chamber of Commerce
Brea Chamber of Commerce
California Association of Bed and Breakfast Inns
California Chamber of Commerce
California Employment Law Council
California Grocers Association
California Hotel & Lodging Association
California League of Food Processors
California Pool & Spa Association
California Restaurants Association
California Retailers Association
California Travel Association
Camarillo Chamber of Commerce
CAWA - Representing the Automotive Parts Industry
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Cerritos Regional Chamber of Commerce
Chambers of Commerce Alliance of Ventura and Santa Barbara
Counties
Computing Technology Industry Association - CompTIA
Culver City Chamber of Commerce
Desert Hot Springs Chamber of Commerce and Visitors Center
East Valley Legislative Advocacy Council
El Dorado County Chamber of Commerce
El Dorado Hills Chamber of Commerce & California Welcome Center
Gateway Chambers Alliance
Goleta Valley Chamber of Commerce
Greater Conejo Valley Chamber of Commerce
Greater Riverside Chambers of Commerce
Greater San Fernando Valley Chamber of Commerce
Lake Tahoe South Shore Chamber of Commerce
Long Beach Area Chamber of Commerce
Maxim Healthcare Services
North Lake Tahoe Chamber of Commerce
North Orange County Chamber
Orange County Business Council
Oxnard Chamber of Commerce
Rancho Cordova Chamber of Commerce
Redondo Beach Chamber of Commerce & Visitors Bureau
San Diego Regional Chamber of Commerce
San Jose Silicon Valley Chamber of Commerce
Santa Clara Chamber of Commerce & Convention-Visitors Bureau
Santa Maria Valley Chamber of Commerce Visitor & Convention
Bureau
Simi Valley Chamber of Commerce
Southwest California Legislative Council
Torrance Chamber of Commerce
Valley Industry and Commerce Association
ARGUMENTS IN SUPPORT: According to proponents, in recent
years, Black Friday shopping deals have increasingly spread into
the Thanksgiving holiday, forcing workers to miss out on
celebrating the holiday with their families in order to keep
their jobs. In some cases this work has become mandatory,
forcing workers to give up their holiday or risk losing their
jobs. The author and proponents argue that this bill simply
seeks to provide employees with double pay in order to meet the
increase in consumer demand on Thanksgiving Day and "pre"-Black
Friday shopping. Proponents believe this bill would guarantee
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that employees are fairly compensated for the undue hardships
associated with working on the traditional family holiday of
Thanksgiving.
ARGUMENTS IN OPPOSITION: A coalition of opponents argue that
this bill unfairly targets two classifications of employers,
retail and grocery store establishments, increases their costs,
and creating a competitive disadvantage by forcing them to
recognize Thanksgiving as a "family holiday" and compensate all
employees with double the regular rate of pay for work on that
day. Any other employer who opens on Thanksgiving can continue
to pay their employees minimum wage. Opponents also argue that
this bill unilaterally increases the cost of doing business only
for those employers who have a "physical store" in California,
thereby automatically placing them at a competitive disadvantage
with online retailers and out-of-state businesses not subject to
this costly mandate.
Additionally, opponents argue that many of the "retail store
establishment" employers surveyed confirmed they voluntarily pay
their employees time and a half for work on Thanksgiving. They
also note that numerous grocery store establishments also pay
increased compensation on Thanksgiving, as negotiated through
the collective bargaining process, yet would still be subject to
the provisions of AB 67 as they do not qualify for the
collective bargaining exemption.
Also of concern to opponents is the requirement that employers
pay double the employee's "regular rate" of pay rather than
double the "hourly rate," a significant different, they argue,
as the determination of the regular rate of pay requires a
detailed calculation that goes beyond just an employee's hourly
pay. They argue that good faith errors made in calculating the
regular rate of pay or failure to comply with other provisions
of AB 67 would be subject to Private Attorneys General Act and
add another threat of litigation against California employers.
Lastly, opponents argue that this bill provides preferential
treatment for one day out of the year that not all recognize as
a family holiday and may be offensive to those that believe
other days within the year deserve that recognition.
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A restaurant specific point of opposition comes from the
California Restaurant Association which argues that this bill,
although exempting a share of the restaurant community, leaves
many subject to the double-pay requirements based on the mere
fact that they operate within retail or grocery establishments
even though they are separate and independent. They argue that
these restaurants will face unfair competition as they will be
forced to pay double hourly pay to its employees while
restaurants outside a retail or grocery store, but in the same
shopping center or across the street, do not.
ASSEMBLY FLOOR: 43-32, 1/27/16
AYES: Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,
Campos, Chau, Chiu, Chu, Eggman, Cristina Garcia, Eduardo
Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger
Hernández, Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty,
Medina, Mullin, Nazarian, O'Donnell, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Santiago, Mark Stone, Thurmond,
Ting, Weber, Williams, Wood, Atkins
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Cooley, Dababneh, Dahle, Dodd, Frazier, Beth Gaines,
Gallagher, Grove, Hadley, Harper, Irwin, Jones, Kim, Lackey,
Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen,
Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Cooper, Daly, Linder, Salas
Prepared by:Alma Perez-Schwab / L. & I.R. / (916) 651-1556
8/5/16 11:08:23
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