BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2230


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          Date of Hearing:   August 22, 2016


                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT


                                Tony Thurmond, Chair


          AB 2230  
          (Chu) - As Amended June 22, 2016


          SUBJECT:  Overtime compensation:  private elementary or  
          secondary academic institutions:  teachers


          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.  
          Specifically, this bill provides 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 percent 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, intern permit, or waiver.


          2)The equivalent of no less than 70 percent 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.









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          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 $10.00 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 U.S. Consumer Price Index (CPI),  
            which is a measure of inflation. (Labor Code §1182.12)
          
          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  








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          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. 


          REGISTERED SUPPORT / OPPOSITION:




          Support


          California Association of Private School Organizations








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          California Catholic Conference




          Opposition


          None on file.




          Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091