BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1066 (Gonzalez) - Agricultural workers:  wages, hours, and  
          working conditions
          
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          |Version: June 22, 2016          |Policy Vote: L. & I.R. 4 - 1    |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 1, 2016    |Consultant: Robert Ingenito     |
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          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.   







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          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.








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                 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.











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          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.


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