BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: AB 1066 Hearing Date: June 29,
2016
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|Author: |Gonzalez |
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|Version: |June 22, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Alma Perez-Schwab |
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Subject: Agricultural workers: wages, hours, and working
conditions
KEY ISSUE
Should the Legislature remove an exemption in current law that
would extend the payment of overtime compensation to
agricultural employees after 8 hours of work in a day or 40 in a
week - which a majority of employees in other industries already
receive?
ANALYSIS
Existing law:
1) Defines a full workday as 8 hours, and 40 hours as a
workweek. Overtime wage rates must be paid for any time
worked beyond 8 a day and 40 a week. (Labor Code §510)
2) Requires, with some exceptions, the payment of overtime
compensation as follows:
§ Any work in excess of 8 hours in one workday,
any work in excess of 40 hours in any one workweek,
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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;
§ 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.
1) Provides that the payment of overtime compensation
requirements do not apply where:
§ An employee submits a written request to make
up work time in the same workweek in which the work
time was lost.
§ An alternative workweek schedule adopted
pursuant to Labor Code Section 511.
§ Employees have adopted an alternative workweek
schedule pursuant to a collective bargaining
agreement, as specified.
§ An alternative workweek schedule is
inapplicable because the work relates to cases of
emergency or the protection of life or property, to
the movement of trains, or to certain hardship
exceptions as specified.
1) Requires, with certain exemptions, that all employees
receive a meal break of 30 minutes before the start of the
5th hour of work, as specified. If more than 10 hours are
worked, a second meal period of 30 minutes must also be
granted.
2) Specifies that every person employed in any occupation
of labor is entitled to one day's
rest therefrom in seven and no employer shall cause his/her
employees to work more than six days in seven.
3) Employers who violate these provisions are guilty of a
misdemeanor. (Labor Code §553)
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4) Exempts any person employed in an agricultural
occupation from all these provisions. (Labor Code §554)
5) Establishes the Industrial Welfare Commission (IWC) to
adopt or amend working condition orders with respect to
break periods, meal periods, and days of rest for any
workers in the State consistent with the health and welfare
of those workers.
(Labor Code §516)
6) Under the IWC Wage Order 14, employees working in an
agricultural occupation, as defined, are entitled to
overtime compensation as follows:
§ Any work in excess of 10 hours in any one
workday or more than 6 days in any workweek, and the
first 8 hours worked on the 7th day must be paid at 1
times the employee's regular rate of pay;
§ All hours worked over 8 on the 7th day of work
must be paid at double the employee's regular rate of
pay.
This Bill would remove the exemption for agricultural employees
regarding hours, meal breaks, and other specified working
conditions and would enact the Phase-In Overtime for
Agricultural Workers Act of 2016, as specified.
Specifically, this bill:
1. Provides that, beginning January 1, 2019, any person
employed in an agricultural occupation shall not be
employed more than 9 hours in any one workday or more
than 55 hours in any one workweek, unless he/she receives 1
times that employee's regular rate of pay for all hours
worked over 9 in a workday or over 55 in a week.
2. Provides that, beginning January 1, 2020, any person
employed in an agricultural occupation shall not be
employed more than 9 hours in any one workday or more than
50 hours in any one workweek, unless he/she receives 1
times that employee's regular rate of pay for all hours
worked over 9 in a workday or over 50 in a week.
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3. Provides that, beginning January 1, 2021, any person
employed in an agricultural occupation shall not be
employed more than 8 hours in any one workday or more
than 45 hours in any one workweek, unless he/she receives 1
times that employee's regular rate of pay for all hours
worked over 8 in a workday or over 45 in a week.
4. Provides that, beginning January 1, 2022, any person
employed in an agricultural occupation shall not be
employed more than 8 hours in any one workday or more than
40 hours in any one workweek, unless he/she receives 1
times that employee's regular rate of pay for all hours
worked over 8 in a workday or over 40 in a week.
5. Provides that the term "employed in an agricultural
occupation" has the same meaning as the term found in the
IWC wage order for Agricultural Occupations.
6. Provides that, beginning January 1, 2022, any person
employed in an agricultural occupation who works in excess
of 12 hours in one day shall be compensated at the rate of
no less than twice the employee's regular rate of pay.
7. Provides that all other provisions of existing law
regarding compensation for overtime work shall apply to
workers in an agricultural occupation beginning January 1,
2019.
8. Authorizes the Governor to temporarily suspend the
scheduled phase-in of overtime requirements set forth above
if the Governor suspends scheduled minimum wage increases
for specified "economic conditions" under provisions of law
enacted this year pursuant to Senate Bill 3 (Leno), Chapter
4, Statutes of 2016.
9. If the Governor makes such a determination, all
implementation dates shall be postponed by an additional
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year. This authority shall end upon the final phase-in of
overtime provisions, but not later than January 1, 2022.
10. Requires the Department of Industrial Relations to
update Industrial Welfare Commission Wage Order 14 to be
consistent with the requirements in this bill, except that
any existing provisions providing greater protections or
benefits to agricultural employees shall continue in full
force and effect.
11. Makes related legislative findings and declarations.
COMMENTS
1. Background on Agricultural Workers and Overtime:
In 1938, Congress passed the Fair Labor Standards Act (FLSA),
which established minimum requirements for labor laws in all
states. The FLSA establishes minimum wage, overtime pay,
recordkeeping, and youth employment standards affecting
employees in the private sector and in Federal, State, and
local governments. The overtime provisions of the FLSA were
not extended to agricultural employees. However, as with all
provisions with 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 eight-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 eight-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.
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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).
2. Existing Overtime Provisions: comparison among occupations
Pay overtime equal to 1 times the regular rate of pay:
§ For most occupations, all hours over 8 in one day or
over 40 in one week, and for the first eight hours of
work on the seventh day of work in a work week.
§ For personal attendants (specified domestic
workers), all hours over 9 in one day or over 45 in one
week.
§ For farmworkers, all hours over 10 in one day or
over 60 in one week, and for the first eight hours of
work on the seventh day in a workweek.
Pay double time:
§ For most occupations, all hours over 12 in one day
or over eight on the seventh day of work in a workweek.
§ For farmworkers, all hours over eight on the seventh
day of work in a workweek.
3. Need for this bill?
According to the California Research Bureau (CRB), California
remains the largest overall producer of agricultural goods by
value in the country, and is one of the largest agricultural
producing regions in the world. (CRB, Farmworkers in
California: A Brief Introduction, Oct. 2013) Unfortunately,
despite the success of the industry, the farmworkers that make
much of the production possible face a number of disadvantages
compared to California's population as a whole. According to
CRB, farmworkers are at higher risk for living in poverty, are
less likely to have health insurance, and typically lack the
resources necessary to change their situation. According to
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the US Department of Labor - Bureau of Labor Statistics, the
median annual wage for agricultural workers was $20,090 in May
2015. In California, the median wage for farmworkers in 2015
was $19,102 annually. The vast majority, 92 percent, of
farmworkers in California were Latino.
The author of the measure argues that on a daily basis,
farmworkers endure extreme working conditions and weather for
low pay and believes it is time for the Legislature to remove
the exemption for agricultural workers that excludes them from
the daily overtime requirements. This bill would remove the
exemption for agricultural employees regarding hours, meal
breaks, and other working conditions, including specified wage
requirements, and would create a schedule that would phase in
overtime requirements for agricultural workers, as defined,
over the course of 4 years, from 2019 to 2022.
4. Proponent Arguments :
The author of the measure argues that even though California's
farmworkers perform some of the most physically-demanding jobs
with pay and working conditions at levels that most Americans
would not tolerate, they continue to be excluded from overtime
laws enjoyed by most American workers. There are very few
occupations that are as physically demanding and exhausting as
agricultural work. Proponents argue that this exclusion can no
longer be justified or tolerated. They believe that by
ensuring that farmworkers are no longer excluded from overtime
laws, poverty among this population and the communities they
live in will be reduced.
Proponents argue that California agriculture is a wealthy,
mature industry that benefits from this unfair overtime
exclusion subsidy that is no longer justified. They note that
in its 2014 ag industry report, the California Department of
Food and Agriculture found that the state's 76,000+ farms and
ranches had combined revenue of approximately $54 billion. The
CDFA's Crop Year Report noted that this total represented a
substantial increase over 2013, and stated that California is
the leading US state in cash farm receipts with combined
commodities representing nearly 13 percent of the US total.
Proponents argue that the agricultural industry has been
profitable despite the fact that farmworkers are earning an
annual average salary of $14,000, and roughly 30 percent of
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households with farmworker income are below the poverty line
and 73 percent earn less than 200 percent of poverty (a
threshold used in many public assistance programs). Overall,
proponents believe it is time for California to support and
extend fair overtime compensation to hundreds and thousands of
agricultural workers.
5. Opponent Arguments :
A coalition of California agricultural producers are opposed
to the measure, noting that the previous bill (AB 2757) was
defeated in the Assembly and argue the following:
This bill will reduce the annual take home pay for
most agricultural employees. The average annual pay for a
milker on a California dairy will be reduced by 33% while
other seasonal agricultural employees could see earnings
decline by as much as 28%.
Farmers in California must compete with farmers in
other states and countries that already have far lower
wage costs. They argue that their buyers - big box and
traditional grocery and restaurant chains - set the price
they will pay, and if our farmers cannot meet these
prices, they will purchase from other states and
countries.
California is already at a competitive disadvantage
as it is one of only a few states that require any
overtime pay for agricultural workers, and our
requirement for daily overtime is already the most
expensive. This bill will exacerbate this disadvantage.
Opponents also note that this bill cannot be viewed in
isolation and argues that California saddles its farmers with
the highest regulatory costs and compliance burdens in the
nation. Among others, they state the following:
Electricity costs for industrial users that are
63.4% higher than the national average.
The highest workers' compensation premium rates in
the nation.
California-only restrictions on use of approved crop
protection tools that increase the risk of crop loss due
to pests and disease.
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Water supply costs driven by regulatory loss of
surface water supplies, forcing farmers to drill new and
deeper wells, pay more for energy to pump, and scramble
to purchase expensive water (if it can be found and
conveyed) from others.
According to opponents, this legislation will end up hitting
many agricultural workers in their wallet as farmers may be
forced to pay higher overtime costs during peak harvest, but
for the tens of thousands of workers who are employed year
round (thinning trees, preparing ground for planting, etc.)
the pressures of cost avoidance will translate to fewer hours
worked as farmers add additional employees to avoid overtime
costs.
Additional opposition from a coalition of suppliers and
consumers argues that cost and regulatory burdens of farming
are already much steeper than in other states and are on the
rise in response to the recent aggressive increase in the
State's minimum wage. They argue that it is likely that
reductions in acreage farmed and employee hours worked could
occur as farmers seek to manage rising costs in order to stay
competitive. They believe this will impact suppliers and
purchasers who will be forced to look elsewhere for the
ingredients they need to manufacturer their consumer goods and
suppliers will have to scale back their own operations as
customer orders for services and goods decrease.
6. Prior Legislation :
AB 2757 (Gonzalez) of 2016, was almost identical to this bill.
This bill (AB 1066) was amended to add co-authors and clarify
that any provisions of the existing IWC Wage Order for
Agricultural Occupations that provide greater protections or
benefits shall continue in full force and effect. AB 2757
failed passage on the Assembly floor.
AB 1313 (Allen) of 2012 and SB 1121(Florez) of 2010: AB 1313
proposed to extend the 8-hour daily overtime rule to
agricultural employees. However, AB 1313 failed passage on
concurrence on the Assembly Floor. AB 1313 was similar to SB
1121 from 2010, which was vetoed by Governor Schwarzenegger.
The Governor's veto message stated (in part):
"Unfortunately, this measure, while well-intended, will not
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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."
SUPPORT
United Farm Workers (Sponsor)
Alameda Labor Council
Alliance San Diego
American Civil Liberties Union of California
American Federation of State, County and Municipal Employees
Asian Americans Advancing Justice - California
California Catholic Conference
California Employment Lawyers Association
California Immigrant Policy Center
California Labor Federation
California Rural Legal Assistance Foundation
California State Conference of the National Association for the
Advancement of Colored People
California State Treasurer, John Chiang
Center of Policy Initiatives
Coalition for Humane Immigrant Rights of Los Angeles
Consumer Attorneys of California
Courage Campaign
Dolores Huerta Foundation
Don Saylor, Yolo County Supervisor
Equality California
Farmworker Justice
Food Empowerment Project
Kern, Inyo, and Mono Counties Central Labor Council
La Cooperativa Campesina de California
Latino Coalition for a Healthy California
League of United Latin American Citizens - California Chapter
Mayor Eric Garcetti, City of Los Angeles
Mexican American Legal Defense and Education Fund
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National Association of Social Workers - California Chapter
Religious Action Center of Reform Judaism
Sacramento Central Labor Council
Service Employees International Union
United Food & Commercial Workers Union - Western States Council
Western Center on Law and Poverty
OPPOSITION
Agricultural Council of California
Alhambra Chamber of Commerce
Almond Hullers & Processors Association
Association of California Egg Farmers
California Agricultural Aircraft Association
California Association of Nurseries & Garden Centers
California Association of Wheat Growers
California Association of Winegrape Growers
California Blueberry Association
California Cattlemen's Association
California Chamber of Commerce
California Citrus Mutual
California Cotton Ginners Association
California Cotton Growers Association
California Dairies, Inc.
California Farm Bureau Federation
California Fresh Fruit Association
California League of Food Processors
California Manufacturers & Technology Association
California Pear Growers Association
California Seed Association
California State Floral Association
California Tomato Growers Association
California Trucking Association
Family Winemakers of California
Far West Equipment Dealers Association
Gilroy Chamber of Commerce
Lodi Chamber of Commerce
Milk Producers Council
National Federation of Independent Business
Nisei Farmers League
Western Agricultural Processors Association
Western Growers Association
Western Plant Health Association
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Western United Dairymen
Wine Institute
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