BILL NUMBER: AB 1470 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 6, 2015
INTRODUCED BY Assembly Member Alejo
(Coauthors: Assembly Members Brown, Daly, and Dodd)
FEBRUARY 27, 2015
An act to add Section 510.5 to the Labor Code, relating to
employment.
LEGISLATIVE COUNSEL'S DIGEST
AB 1470, as amended, Alejo. Working hours: overtime.
Existing law, with certain exceptions, establishes 8 hours as a
day's work and a 40-hour workweek, and requires payment of prescribed
overtime compensation for additional hours worked. Existing law
establishes the Division of Labor Standards Enforcement in the
Department of Industrial Relations for the enforcement of labor laws,
including overtime payment. Under existing law, a person who
violates the provisions regulating work hours is guilty of a
misdemeanor.
This bill would establish a rebuttable presumption that an
employee is exempt from overtime pay an employee with
a if the employee earns total gross annual
compensation of at least $100,000 if that employee also
and regularly performs any of the exempt duties
or responsibilities of an executive, administrative, or professional
employee as set forth in the Industrial Welfare Commission Wage
Orders. This bill, to rebut the presumption, would require
evidence that the employee did not earn total gross annual
compensation of at least $100,000, that the employee did not earn at
least $1,000 per week, as specified, or that the employee
did not regularly perform at least one exempt duty of an executive,
administrative, or professional employee. This bill would only
apply to an employee whose primary duty includes office or nonmanual
work, as described. By expanding the scope of an existing
crime, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 510.5 is added to the Labor Code, to read:
510.5. (a) An There shall be a rebuttable
presumption that an employee is exempt from Section 510 if the
employee with earns total gross annual
compensation of at least one hundred thousand dollars ($100,000)
is exempt from Section 510, if the employee
and also customarily and regularly performs any one or more of
the exempt duties or responsibilities of an executive,
administrative, or professional employee as set forth in the
Industrial Welfare Commission Wage Orders.
(b) (1) "Total gross annual compensation" shall include at least
one thousand dollars ($1,000) per week paid on a salary or fee basis.
Total gross annual compensation may also include commissions,
nondiscretionary bonuses, and other nondiscretionary compensation
earned during a 52-week period. Total gross annual compensation does
not include board, lodging, and other facilities, and does not
include payments for medical insurance, payments for life insurance,
contributions to retirement plans, and the cost of other fringe
benefits.
(2) If an employee's total gross annual compensation does not meet
the minimum amount established in subdivision (a) by the last pay
period of the 52-week period, the employer may, during the last pay
period or within one month after the end of the 52-week period, make
one final payment sufficient to achieve the required total. If an
employer fails to make that payment, this section shall not apply.
(3) An employee who does not work a full year for the employer,
either because the employee is newly hired after the beginning of the
year or ends the employment before the end of the year, is exempt
from Section 510 pursuant to this section if the employee receives a
pro rata portion of the minimum amount established in subdivision
(a), based upon the number of weeks that the employee will be or has
been employed. An employer may make one final payment as described in
paragraph (2) within one month after the end of employment, or this
section shall not apply.
(4) The employer may utilize any 52-week period as the year, such
as a calendar year, a fiscal year, or an anniversary of hire year. If
the employer does not identify some other year period in advance,
the calendar year will apply.
(c) If an employee has a total gross annual compensation of at
least one hundred thousand dollars ($100,000), there will be a
rebuttable presumption that the employee is exempt from the
provisions of Section 510.
(c) The presumption created under subdivision (a) shall be
rebutted only by evidence of one or more of the following:
(1) The employee did not earn total gross annual compensation of
at least one hundred thousand dollars ($100,000).
(2) The employee did not earn at least one thousand dollars
($1,000) per week paid on a salary or fee basis.
(3) The employee did not customarily and regularly perform at
least one exempt duty or responsibility of an executive,
administrative, or professional employee as set forth in the
Industrial Welfare Commission Wage Orders.
(d) This section applies only to employees whose primary duty
includes performing office or nonmanual work.
(e) (1) This section does not apply to nonmanagement
production-line workers and nonmanagement employees in maintenance,
construction, and similar occupations, such as carpenters,
electricians, mechanics, plumbers, iron workers, craftsmen, operating
engineers, longshoremen, construction workers, laborers, and other
employees who perform work involving repetitive operations with their
hands, physical skill, and energy, regardless of the amount of their
compensation.
(2) This section does not apply to an employee covered under a
valid collective bargaining agreement that expressly provides for the
wages, hours of work, and working conditions of employees, including
premium wage rates for all overtime hours worked.
SEC. 2. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.