BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1066 (Gonzalez) - Agricultural workers: wages, hours, and working conditions ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 22, 2016 |Policy Vote: L. & I.R. 4 - 1 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Robert Ingenito | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 1066 would 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. Fiscal Impact: The Department of Industrial Relations (DIR) indicates that it would incur administrative costs of in the range of $326,000 to $586,000 in the first year, and $311,000 to $563,000 annually thereafter (Labor Enforcement and Compliance Fund). Background: In 1938, the Federal Fair Labor Standards Act (FLSA) was established to provide for minimum requirements with respect to certain labor standards, including minimum wage and overtime. AB 1066 (Gonzalez) Page 1 of ? The overtime provisions of FLSA were not extended to agricultural employees. 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. Despite this statutory exemption, the Industrial Welfare Commission (IWC), under its authority, promulgated 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. Proposed Law: This bill would (1) remove the exemption for agricultural employees regarding hours, meal breaks, and other specified working conditions, and (2) enact the Phase-In Overtime for Agricultural Workers Act of 2016, as specified. Specifically, the bill would, among other things, do the following: Provide 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. Provide 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. Provide 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. AB 1066 (Gonzalez) Page 2 of ? Provide 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. Provide that the term "employed in an agricultural occupation" has the same meaning as the term found in the IWC wage order for Agricultural Occupations. Provide 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. Provide that all other provisions of existing law regarding compensation for overtime work shall apply to workers in an agricultural occupation beginning January 1, 2019. Authorize the Governor to temporarily suspend the scheduled phase-in of overtime requirements set forth, under specified conditions. If the Governor makes such a determination, all implementation dates shall be postponed by an additional year. This authority shall end upon the final phase-in of overtime provisions, but not later than January 1, 2022. Require DIR 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. AB 1066 (Gonzalez) Page 3 of ? Related Legislation: AB 2757 (Gonzalez) of 2016, was almost identical to this bill. The bill failed passage on the Assembly floor. Staff Comments: DIR's fiscal estimate of the bill assumes a 10 to 20 percent increase in wage claims annually during the four-year implementation phase. These cost estimates reflect resources for additional staffing and outreach to employers and employees. The bill proposes a substantial shift in the industry and since the hours and rates of pay change annually during the implementation phase, DIR notes that employees may not know their rights and employers may not know which timeframe applies for any given year. Once the bill is fully implemented, potential uncertainty should subside, and consequently, costs are likely to be lower. -- END --