BILL ANALYSIS                                                                                                                                                                                                    Ó






           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                       AB 1066|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                   THIRD READING 


          Bill No:  AB 1066
          Author:   Gonzalez (D), Bonta (D), Cristina Garcia (D), Roger  
                    Hernández (D), Jones-Sawyer (D), McCarty (D), and  
                    Thurmond (D), et al.
          Amended:  8/17/16 in Senate
          Vote:     21 

          PRIOR VOTES NOT RELEVANT

           SENATE LABOR & IND. REL. COMMITTEE:  4-1, 6/29/16
           AYES:  Mendoza, Jackson, Leno, Mitchell
           NOES:  Stone

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 8/11/16
           AYES:  Lara, Beall, Hill, McGuire, Mendoza
           NOES:  Bates, Nielsen

           SUBJECT:   Agricultural workers:  wages, hours, and working  
                     conditions


          SOURCE:    United Farm Workers


          DIGEST:  This bill removes an exemption in current law that  
          would extend the payment of overtime compensation to  
          agricultural employees after eight hours of work in a day or 40  
          in a week in a phased in implementation.


          Senate Floor Amendments of 8/17/16 delay implementation of these  
          provisions for small businesses of 25 or fewer employees by  
          three years; and specify that the Governor's authority to  








                                                                    AB 1066  
                                                                    Page  2


          suspend the scheduled overtime phase in will end upon the phase  
          in completion, previously in the bill, or January 1, 2025. 


          ANALYSIS:  


          Existing law:


           1) Defines a full workday as eight hours, and 40 hours as a  
             workweek. Overtime wage rates must be paid for time worked  
             beyond eight a day and 40 a week. 




           2) Requires, with some exceptions, the payment of overtime as  
             follows: 


                 Work in excess of eight hours a day and over 40 hours a  
               workweek, and the first eight hours on the 7th day in a  
               workweek shall be compensated at the rate of no less than 1  
                times the regular rate of pay.


                 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.


                 Work in excess of eight hours on any 7th day of a  
               workweek shall be compensated at no less than twice the  
               regular rate of pay. 


           1) Specifies that every person employed in any occupation of  
             labor is entitled to one day's rest in seven and no employer  
             shall cause his/her employees to work more than six days in  
             seven.


           2) Provides that employers who violate these provisions are  







                                                                    AB 1066  
                                                                    Page  3


             guilty of a misdemeanor. 


           3) Exempts any person employed in an agricultural occupation  
             from all these provisions.   (Labor Code §554)


           4) Establishes the Industrial Welfare Commission (IWC) to adopt  
             or amend working condition orders consistent with existing  
             law. 


           5) Provides that, under the IWC Wage Order 14, employees  
             working in an agricultural occupation, as defined, are  
             entitled to overtime as follows: 


                 Any work in excess of 10 hours in any one workday or  
               more than six days in any workweek, and the first eight  
               hours worked on the 7th day must be paid at 1  times the  
               employee's regular rate of pay;


                 All hours worked over eight on the 7th day of work must  
               be paid at double the employee's regular rate of pay.  




          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.  Employers of 25 or fewer  
             employees commencing January 1, 2022. 


           2) Provides that, beginning January 1, 2020, any person  
             employed in an agricultural occupation shall not be employed  
             more than nine hours in any one workday or more than 50 hours  







                                                                    AB 1066  
                                                                    Page  4


             in any one workweek, unless he/she receives 1  times that  
             employee's regular rate of pay for all hours worked over nine  
             in a workday or over 50 in a week. Employers of 25 or fewer  
             employees commencing January 1, 2023. 


           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.  Employers of 25 or fewer  
             employees commencing January 1, 2024. 


           4) Provides that, beginning January 1, 2022, any person  
             employed in an agricultural occupation shall not be employed  
             more than eight 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  
             eight in a workday or over 40 in a week.  Employers of 25 or  
             fewer employees commencing January 1, 2025. 


           5) Provides that the term "employed in an agricultural  
             occupation" has the same meaning as the IWC wage order  
             definition 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 pay rate.  Employers  
             of 25 or fewer employees commencing January 1, 2025.


           7) Provides that, except as specified, all other provisions of  
             existing law regarding compensation for overtime work shall  
             apply to workers in an agricultural occupation beginning  
             January 1, 2017.


           8) Authorizes the Governor to temporarily suspend the scheduled  
             phase-in of overtime requirements set forth above if the  







                                                                    AB 1066  
                                                                    Page  5


             Governor suspends scheduled minimum wage increases for  
             specified "economic conditions" under provisions of law  
             enacted this year pursuant to SB 3 (Leno, Chapter 4, Statutes  
             of 2016).


           9) Requires, if the Governor makes a determination to  
             temporarily suspend the scheduled overtime phase in, all  
             implementation dates to 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.


           10)Specifies that the Governor's authority to suspend the  
             scheduled overtime requirements shall end upon the phase in  
             completion, as specified, or January 1, 2025, whichever  
             occurs first.  


           11)Requires the Department of Industrial Relations (DIR) to  
             update IWC 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.


           12)Makes related legislative findings and declarations.




          Background


          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.







                                                                    AB 1066  
                                                                    Page  6




          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 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.




          Related/Prior Legislation


          AB 2757 (Gonzalez, 2016) was almost identical to this bill and  
          failed passage on the Assembly Floor.  The contents of AB 2757  
          were amended into this bill (AB 1066) and additionally added  
          co-authors and clarified 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.  
           


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes


          According to the Senate Appropriations Committee, the DIR  
          indicates that it would incur administrative costs 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).  

          SUPPORT:   (Verified8/18/16)







                                                                    AB 1066  
                                                                    Page  7




          United Farm Workers (source)
          California State Treasurer John Chiang
          Alameda Labor Council
          Alliance San Diego
          American Civil Liberties Union of California
          American Federation of State, County and Municipal Employees
          Amigos de los Rios
          Asian Americans Advancing Justice-California
          Audubon California
          Azul
          California Catholic Conference
          California Coastal Protection Network
          California Employment Lawyers Association
          California Environmental Justice Alliance
          California Immigrant Policy Center
          California Labor Federation
          California League of Conservation Voters
          California Rural Legal Assistance Foundation
          California Teachers Association
          Center for Biological Diversity
          Center for Environmental Health
          Center on Race, Poverty & the Environment
          Coalition for Humane Immigrant Rights of Los Angeles
          Coastal Environmental Rights Foundation
          Committees for Land, Air, Water and Species
          Consumer Attorneys of California
          Courage Campaign
          Dolores Huerta Foundation
          Don Saylor, Yolo County Supervisor
          Endangered Habitats League
          Environment California
          Environmental Center of San Diego
          Equality California
          Farmworker Justice
          Food Empowerment Project
          Friends Committee on Legislation
          La Cooperativa Campesina de California 
          Latino Coalition for a Healthy California
          League of United Latin American Citizens-California Chapter
          Lutheran Office of Public Policy CA
          Mayor Eric Garcetti, City of Los Angeles 
          Mexican American Legal Defense and Educational Fund







                                                                    AB 1066  
                                                                    Page  8


          National Association for the Advancement of Colored  
          People-California
          National Association of Social Workers-California Chapter
          Natural Resources Defense Council
          Pesticide Action Network
          Progressive Women of Napa Valley
          Religious Action Center of Reform Judaism 
          Sacramento Central Labor Council
          Sacramento Jewish Community Relations Council
          Save Our Shores
          Service Employees International Union
          Sierra Club California
          Southern California Watershed Alliance
          The Center of Policy Initiatives
          The Kern, Inyo, and Mono Counties Central Labor Council
          The League of United Latin American Citizens California Chapters
          Trust for Public Land
          United Food & Commercial Workers Union-Western States Council
          Voices for Progress
          Western Center on Law and Poverty


          OPPOSITION:   (Verified8/18/16)


          African American Farmers of California
          Agricultural Council of California 
          Alhambra Chamber of Commerce
          Almond Hullers & Processors Association 
          Association of California Egg Farmers
          California Agricultural Aircraft Association 
          California Association of Ag and Labor
          California Association of Nurseries & Garden Centers
          California Association of Wheat Growers 
          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 







                                                                    AB 1066  
                                                                    Page  9


          California Fresh Fruit Association 
          California League of Food Processors
          California Manufacturers & Technology Association
          California Pear Growers Association 
          California Producer Handler-Association
          California Seed Association 
          California State Floral Association 
          California Tomato Growers Association 
          California Trucking Association
          Community Alliance with Family Farmers
          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
          Ventura County Agricultural Processors Association
          Western Agricultural Processors Association 
          Western Growers Association 
          Western Plant Health Association 
          Western United Dairymen
          Wine Institute


          ARGUMENTS IN SUPPORT:     The author 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.  
          Proponents argue that this exclusion can no longer be justified  
          or tolerated.  


          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 agricultural 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. 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  
          households with farmworker income are below the poverty line and  







                                                                    AB 1066  
                                                                    Page  10


          73 percent earn less than 200 percent of poverty (a threshold  
          used in many public assistance programs). They argue that it is  
          time for California to support and extend fair overtime  
          compensation to hundreds and thousands of agricultural workers.


          ARGUMENTS IN OPPOSITION:     A coalition of California  
          agricultural producers are opposed to this bill, arguing the  
          following:


           This bill will hurt farmworkers: $1.5 billion in reduced  
            wages; $4,500 in reduced income per farmworker; 16% reduction  
            in farmworker income. 
           This bill will hurt farm production: $5.4 billion loss in crop  
            production; the removal of 1.25 million farmed acres; 7.2%  
            decrease in crop production. 
           This bill will hurt the economy: up to 78,000 lost farm,  
            processing, transport, and support industry jobs; $7.8 billion  
            in lost income statewide.
           Farmers in California must compete with farmers in other  
            states and countries that already have far lower wage costs. 
           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. They  
          argue that this bill will end up hitting many 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 the pressures of cost avoidance will  
          translate to fewer hours worked as farmers add additional  
          employees to avoid overtime costs.  


          Prepared by:Alma Perez-Schwab/ L. & I.R. / (916) 651-1556
          8/19/16 15:26:41









                                                                    AB 1066  
                                                                    Page  11


                                   ****  END  ****