BILL ANALYSIS Ó AB 2757 Page 1 Date of Hearing: April 6, 2016 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair AB 2757 (Gonzalez) - As Amended March 30, 2016 SUBJECT: Agricultural Workers: wages, hours, and working conditions SUMMARY: Enacts the Phase-In Overtime for Agricultural Workers Act of 2016, as specified. Specifically, this bill: 1)Provides that, beginning July 1, 2017, any person employed in an agricultural occupation shall not be employed more than nine and one-half hours in any one workday or work in excess of 55 hours in any one workweek, unless the employee receives one and one-half times that employee's regular rate of pay for all hours worked over nine and one-half hours in any workday or over 55 hours in any workweek. 2)Provides that, beginning January 1, 2018, any person employed in an agricultural occupation shall not be employed more than nine hours in any one workday or work in excess of 50 hours in any one workweek, unless the employee receives one and one-half times that employee's regular rate of pay for all hours worked over nine hours in any workday or over 50 hours in any workweek. AB 2757 Page 2 3)Provides that, beginning January 1, 2019, any person employed in an agricultural occupation shall not be employed more than eight and one-half hours in any one workday or work in excess of 45 hours in any one workweek, unless the employee receives one and one-half times that employee's regular rate of pay for all hours worked over eight and one-half hours in any workday or over 45 hours in any workweek. 4)Provides that, beginning January 1, 2020, any person employed in an agricultural occupation shall not be employed more than eight hours in any one workday or work in excess of 40 hours in any one workweek, unless the employee receives one and one-half times that employee's regular rate of pay for all hours worked over eight hours in any workday or over 40 hours in any workweek. 5)Provides that the term "employed in an agricultural occupation" has the same meaning as in a specified Wage Order of the Industrial Welfare Commission. 6)Provides that, beginning January 1, 2020, any work performed by a person employed in an agricultural occupation 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. 7)Provides that all other provisions of existing law regarding compensation for overtime work shall apply to workers in an agricultural occupation beginning January 1, 2017. AB 2757 Page 3 8)Requires the Department of Industrial Relations to update Industrial Welfare Commission Wage Order 14 to be consistent with this bill. 9)Makes related legislative findings and declarations. FISCAL EFFECT: Unknown COMMENTS: In 1938, Congress passed the Fair Labor Standards Act (FLSA), which established minimum requirements with respect to specified labor standards, including minimum wage and overtime. The overtime provisions of the FLSA were not extended to agricultural employees. However, as with all provisions of the FLSA, states are allowed to exceed the requirements laid out in the federal law. 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 Industrial Welfare Commission (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. AB 2757 Page 4 With respect to meal periods, the applicable wage order provides that every employer shall "authorize and permit" agricultural employees to take a meal period after five hours of work. This language differs from the statutory meal period language applicable to other employees that prohibits an employer from employing a worker longer than five hours without "providing" a meal period. In addition, the wage order does not require a second meal period after the tenth hour of work (as the statute requires for other employees). ARGUMENTS IN SUPPORT: This bill is sponsored by the United Farm Workers (UFW), who argues that farm workers engage in back-breaking work every day. Few occupations in today's America are as physically demanding and exhausting as farm work. Yet no job in America requiring such demand on the human body pays less for a long day's work than what this bill is asking for farm workers. UFW states that is has been 77 years since farm workers were excluded from the wage protections and maximum hour standards through the enactment of the FLSA. Excluding farm workers is part of our country's shameful legacy that initially targeted African-American who were farm workers in the 1930s. They argue that excluding farm workers from overtime was wrong in 1938, and is wrong today. AB 2757 Page 5 UFW argues that this bill rights a wrong that can no longer be justified or tolerated in a society where equal rights and equal justice are supposed to be more than academic theories or political rhetoric. Similarly, the Mexican American Legal Defense and Educational Fund MALDEF argues that, even though California's farms workers 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. The enactment of the Fair Labor Standards Act of 1938 has excluded farm workers from wage protections and maximum hour standards for the last 78 years. This can no longer be justified or tolerated. This bill is a commonsense solution that will make farm workers eligible for overtime pay like every other worker. ARGUMENTS IN OPPOSITION: A coalition of agricultural employers and others opposes this bill, arguing that, because farmers, their employees and their operations are critically affected by the uncontrollable whims AB 2757 Page 6 of nature and the seasonality of agricultural production, agriculture needs greater flexibility in scheduling work than do other industries. They contend that state and federal laws recognize this reality. There remains widespread agreement that wage laws in other industries and businesses cannot be equated with those in farming due to farming's unpredictability, seasonality of work, and the dynamics of the weather and compressed harvest season. Federal law completely exempts persons employed in agriculture from overtime pay, but California long ago established an overtime pay requirement for agricultural employees. Opponents note that California is one of only a few states that require premium pay for overtime worked by farm workers. California's regulation is one of the most generous in its coverage and requires agricultural workers receive overtime pay for hours worked over 10 in a workday. They state that California farmers value and respect their workers. In fact, many farmers voluntarily provide health benefits, vacation pay, and 401 (k) retirement plans for their employees. Opponents believe this bill will backfire, hurting family farmers and cutting agricultural workers' paychecks. California's family farmers cannot successfully compete with other states and nations if they are forced to increase their production costs. Profit margins in agriculture are thin - farmers cannot remain successful if they must absorb these additional costs. They contend that the cost of farming has risen by 36 percent over the past few years; inputs like seeds, AB 2757 Page 7 fertilizer and electricity have all become significantly more expensive. Consequently, farmers will likely avoid the additional costs imposed by this bill by limiting worker hours and hiring more farm workers to make up the difference whenever possible. PRIOR RELATED LEGISLATION AB 1313 (Allen) of 2012 proposed to extend the 8-hour daily overtime rule to agricultural employees. However, AB 1313 failed passage on concurrence on the Assembly Floor. AB 1313 was similar to SB 1121 (Florez) from 2010, which was vetoed by Governor Schwarzenegger. The Governor's veto message stated (in part): "Unfortunately, this measure, while well-intended, will not improve the lives of California's agricultural workers and instead will result in additional burdens on California businesses, increased unemployment, and lower wages. In order to remain competitive against other states that do not have such wage requirements, businesses will simply avoid paying overtime. Instead of working 10-hour days, multiple crews will be hired to work shorter shifts, resulting in lower take home pay for all workers. Businesses trying to compete under the new wage rules may become unprofitable and go out of AB 2757 Page 8 business, resulting in further damage to our already fragile economy." REGISTERED SUPPORT / OPPOSITION: Support American Federation of State, County, and Municipal Employees Asian Americans Advancing Justice -CA CA Conference Board of Amalgamated Transit Union CA Conference of Machinists CA League of United Latin American Citizens CA State Conference for NAACP CA State Conference of the NAACP California Employment Lawyers Association California Federation of Teachers AB 2757 Page 9 California Immigration Policy Center California Labor Federation California Rural Legal Assistance Foundation California Teamsters Public Affairs Council Center on Policy Initiatives Coalition for Humane Immigrant Rights of Los Angeles Consumer Attorneys of California Courage Campaign Dolores Huerta Foundation Engineers & Scientists of CA, IFPTE Local Farmworker Justice Hilary Rodham Clinton Honorable Norma J. Torres, Member of Congress Human Rights Watch International Brotherhood of Teamsters AB 2757 Page 10 International Longshore and Warehouse Union La Cooperativa Campesina de California Los Angeles Alliance for a New Economy Los Angeles Mayor, Eric Garcetti Mexican American Legal Defense and Educational Fund National Association of Social Workers - California Chapter Professional and Technical Engineers, IFPTE Local 21 Sacramento Central Labor Council SAG-AFTRA Service Employees International Union California UNITE HERE UNITE HERE Local 30 United Farm Workers United Food and Commercial Workers Utility Worker Union of America, Local 132 AB 2757 Page 11 Western Center on Law & Poverty Opposition Agricultural Council of California Almond Hullers & Processors Association California Agricultural Aircraft Association California Association of Nurseries & Garden Centers California Association of Winegrape Growers California Association Wheat Growers California Blueberry Association California Cattlemen's Association California Chamber of Commerce California Citrus Mutual AB 2757 Page 12 California Cotton Ginners Association California Cotton Growers Association California Dairies, Inc. California Farm Bureau Federation California Fresh Fruit Association California Pear Growers Association California Seed Association California Tomato Growers Association Family Winemakers of California Far West Equipment Dealers Association Nisei Farmers League Western Agricultural Processors Association Western Growers Association AB 2757 Page 13 Western Plant Health Association Western United Dairymen Wine Institute Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091