BILL ANALYSIS Ó AB 2230 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2230 (Chu) As Amended June 22, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(May 23, 2016) |SENATE: | 38-0 |(August 15, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (vote not relevant) Original Committee Reference: INS. SUMMARY: Amends an existing overtime exemption for private school teachers to tie the exemption to comparable public school teacher salaries, rather than the state minimum wage. The Senate amendments delete the contents of the bill and instead provide that an existing overtime exemption for private school teachers applies if, on and after July, 2017, the employee earns the greater of the following: 1)No less than 100% of the lowest salary offered by any school district to a person who is in a position that requires the person to have a valid California teaching credential and is not employed in that position pursuant to an emergency permit, AB 2230 Page 2 intern permit, or waiver. 2)The equivalent of no less than 70% of the lowest schedule salary offered by the school district or county in which the private school is located to a person who is in a position that requires the person to have a valid California teaching credential and is not employed in that position pursuant to an emergency permit, intern permit, or waiver. EXISTING LAW: 1)Requires any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek to be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee. 2)Exempts private school teachers from the requirements of overtime if the teacher is paid a monthly salary that is the equivalent of at least twice the state minimum wage for full time employment. 3)Defines a private school teacher as an employee who is primarily engaged in the duty of imparting knowledge to pupils by teaching, instructing, or lecturing and customarily and regularly exercises discretion and independent judgment in performing the duties of a teacher. 4)Sets the current California minimum wage at $10 per hour. 5)Starting January 1, 2017, incrementally increases the state's minimum wage, depending on the size of the employer and future economic conditions, to $15 per hour and then ties annual minimum wage increases to the United States Consumer Price Index (CPI), which is a measure of inflation. (Labor Code Section (LAB) 1182.12) AB 2230 Page 3 FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: Under existing law, private school teachers are exempted from overtime if they make at least twice the minimum wage. Starting in January 1, 2017, the State of California will begin to gradually increase the state minimum wage, which will eventually be indexed to the consumer price index (CPI) once the minimum wage reaches $15 per hour. The CPI increase would be calculated on August 1st and take effect the January 1 of the following year. For private schools that calculate their budgets prior the beginning of the school year, this can present a moving target for calculating the level of wages that would trigger the overtime exemption. This bill would simplify this calculation by tying private school wages to a set percentage of comparable public school wages. Supporters note that private school teachers are currently exempted from overtime if they are paid twice the minimum wage. However, supporters note that this calculation is arbitrary and not based on the day-to-day realities of the teaching profession and local economic variation. Supporters argue that this bill will address these inadequacies by tying the private teacher overtime to the salaries of public school teachers, establishing a wage floor for private school teachers that will increase in step with earnings received by public school counterparts. Supporters also argue that this bill will help ensure that private school teachers employed in more affluent communities receive higher levels of compensation, while still ensuring that private school teachers who teach in less affluent areas are not denied reasonable compensation. Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: AB 2230 Page 4 0003687