BILL ANALYSIS Ó
SB 327
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Date of Hearing: September 8, 2015
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
SB
327 (Ed Hernandez) - As Proposed to be Amended September 8, 2015
SENATE VOTE: (vote not relevant)
SUBJECT: Industrial Welfare Commission: wage orders: meal
periods
SUMMARY: Enacts provisions of law related to the provision of
meal periods to employees in the health care industry.
Specifically, this bill:
1)Provides that, notwithstanding any other law, the healthcare
employee meal period waiver provisions of specified Wage
Orders of the Industrial Welfare Commission (IWC) were valid
and enforceable on and after October 1, 2000, and continue to
be valid and enforceable.
2)Provide that this provision is declarative of and clarifies
existing law.
3)Makes related legislative findings and declarations.
4)Contains an urgency clause.
FISCAL EFFECT: Unknown
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COMMENTS: This bill responds to a recent decision by the
California Court of Appeal regarding the provision of meal
periods for employees in the health care industry.
In Gerard v. Orange Coast Memorial Medical Center, 234 Cal. App.
4th 285 (2015), the Court of Appeal held that certain language
contained in a Wage Order of the Industrial Welfare Commission
(IWC) was invalid to the extent it conflicts with Labor Code
Section 512.
Labor Code Section 512(a) provides in pertinent part as follows:
"An employer may not employ an employee for a work period of
more than 10 hours per
day without providing the employee with a second meal
period of not less than 30 minutes, except that if the
total hours worked is no more than 12 hours, the second
meal period may be waived by mutual consent of the employer
and the employee only if the first meal period was not
waived."
Section 512 was enacted in 1999, as part of Assembly Bill 60
which, among other things, codified California's daily overtime
requirement and required the IWC to review its wage orders and
readopt orders conforming to the Legislature's expressed
intentions. Section 512 set out statutory meal period
requirements for the first time, which previously had been
contained only in the IWC Wage Orders.
Thereafter, the IWC held public hearings and adopted revised
wage orders for each industry, including the current version of
Wage Order No. 4 and Wage Order No. 5. With only limited
exceptions, the IWC's 2001 wage orders embraced section 512's
meal period requirements, and did not impose different ones.
Thus, as to the majority of its 2001 wage orders, the IWC did
not impose a different meal period requirement than that spelled
out in section 512.
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The IWC had originally modified the meal waiver requirements in
wage order Nos. 4 and 5 in 1993, in response to a health care
industry petition to permit its employees to waive a second meal
period on longer shifts in order to leave earlier. The IWC later
extended similar waiver rights to all employees covered by these
wage orders and three others, but that extension was among many
wage order changes repealed by the Legislature (under AB 60) in
1999.
Thereafter, health care representatives and other stakeholders
persuaded the IWC to at least preserve expanded waiver rights
for their industry, along the lines of those originally afforded
in 1993. Accordingly, wage orders Nos. 4-2001 and 5-2001 each
contains a provision absent from other wage orders, permitting
health care employees to waive one of two meal periods on longer
shifts.
Specifically, Section 11(D) of Industrial Welfare Commission
Wage Orders 4-2001 and 5-2001 states in relevant part:
"Notwithstanding any other provision of this order,
employee is the health care industry who work shifts in
excess of eight (8) total hours in a workday may
voluntarily waive their right to one of their two meal
periods."
Wage Order 4 and 5 define "health care industry" to mean
"hospitals, skilled nursing facilities, intermediate care and
residential care facilities, convalescent care institutions,
home health agencies, clinics operating 24 hours per day, and
clinics performing surgery, urgent care, radiology,
anesthesiology, pathology, neurology or dialysis."
In addition, Wage Order 4 and 5 define "employees in the health
care industry" to mean any of the following:
Employees in the health care industry providing patient
care;
Employees in the health care industry working in a
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clinical or medical department, including pharmacists
dispensing prescriptions in any practice setting;
Employees in the health care industry working primarily
or regularly as a member of a patient care delivery team;
or
Licensed veterinarians, registered veterinary
technicians and unregistered animal health technicians
providing patient care.
Section 11(D) of Wage Order 5-2001 first became effective on
October 1, 2000. However, prior to that date, the Legislature
enacted and the Governor signed Senate Bill 88 as an urgency
measure that became effective upon signature. SB 588 enacted
Labor Code section 516, which reads as follows:
"Except as provided in Section 512, the Industrial Welfare
Commission may adopt or amend working condition orders with
respect to break periods, meal periods, and days of rest
for any workers in California consistent with the health
and welfare of those workers."
Therefore, the provisions of the statute and of the Wage Order
appear to conflict on their face. The Wage Order language
authorizes health care employees to waive their second meal
period for any shift over eight hours. However, the language of
the statute provides that the second meal period may be waived
only if the total hours worked does not exceed 12 hours.
The court resolved this conflict in favor of the statutory
provisions, stating:
"[T]here is a conflict between section 11(D) and section
512(a). As our Supreme Court recognized?section 11(D)
permits health care workers to waive their second meal
periods, even on shifts in excess of 12 hours, and thus
section 11(D) 'conflicts' with section 512(a), which limits
second meal period waivers to shifts of 12 hours or less?
?[T]he conflict between section 11(D) and section 512(a)
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creates an unauthorized additional exception to the general
rule set out in section 512(a), beyond the express
exception for waivers on shifts of no more than 12 hours?
?We see nothing in this legislative history to support
hospital's argument the additional regulatory exception
embodied in section 11(D) for shifts longer than 12 hours
is consistent with the Legislature's intent. To the
contrary, everything in this legislative history evidences
the intent to prohibit the IWC from amending its wage
orders in ways that conflict with meal period requirements
in section 512, including the proviso second meal periods
may be waived only if the total hours worked is less than
12 hours."
In addition, the Court of Appeal held that the plaintiffs were
entitled to seek premium pay under Labor Code section 226.7 for
any failure by the hospital to provide mandatory second meal
periods before the decision that falls within the governing
three-year statutory period. The Court noted, "there is no
compelling reason of fairness or public policy that warrants an
exception to the general rule of retroactivity for our decision
partially invalidating section 11(D)."
The California Supreme Court granted review on May 20, 2015.
The Court stated the issues on review as follows:
1) Is the health care industry meal period waiver
provision in section 11(D) of Industrial Welfare
Commission Order No. 5-2001 invalid under Labor Code
section 512, subdivision (a)?
2) Should the decision of the Court of Appeal partially
invalidating the Wage Order be applied retroactively?
ARGUMENTS IN SUPPORT
The California Hospital Association supports this measure,
stating:
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"This bill will clarify that employees in the healthcare
industry can continue to waive one of their two meal periods
pursuant to Wage Orders 4 and 5-2001, even when their shift
exceeds 12 hours. A recent court ruling, Gerard v. Orange
Coast Memorial Medical Center, could jeopardize this option,
thus jeopardizing the availability to 12-hour shifts. Absent
clarification that Wage Orders 4 and 5, section 11(D) has been
valid since it was adopted by the Industrial Welfare
Commission in June 2000, hospitals will be liable for a missed
meal period premium on any day an employee worked even 1
minute over the 12-hour mark. This could result in millions of
dollars in liability, as well as scheduling changes throughout
the hospital industry?
?While the California Supreme Court recently accepted review
of the Gerard case, it nonetheless poses a significant adverse
impact on healthcare employers and employees, particularly
those working 12-hour shifts who want to waive one of their
meal periods so that they do not have to prolong their workday
by 30 minutes. Because it is unclear when and how the Supreme
Court will resolve the case, hospitals are faced with the
decision whether to immediately and significantly change their
scheduling practices, which may include extending the shift to
13 hours to accommodate a second, off-duty meal period,
reverting to 8-hour shifts or taking some other action to
minimize potential liability moving forward. Further, while
the Gerard appellate decision has been de-published similar
cases have already been filed and thus without clarification
of the law, hospitals currently risk facing expensive class
action litigation and potential retroactive liability in the
millions of dollars. As the Supreme Court evaluates the legal
issues raised in the Gerard case, clarification of the law by
the legislature is extremely important to the Court's
analysis. Thus, it is critically important for the Legislature
to reject the Court of Appeal decision and the rationale on
which it is based."
With respect to the legislative history of the IWC Wage Orders
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and the applicable statute, the California Hospital Association
states:
"Since 1993, healthcare employers have been able to offer a
meal period waiver that allows employees working 12-hour
shifts to voluntarily waive one of their two meal periods.
12-hour shifts are common in the healthcare industry, both in
unionized and non-unionized environments. Employees who work
12-hour shifts may frequently work a few minutes more than 12
hours due to clocking in a couple of minutes early or clocking
out a couple of minutes late.
In 1999, as part of AB 60, the California Legislature codified
the meal period rules which had formerly only been included in
the wage order. In Labor Code section 512, the Legislature
expressly required that employees working more than 10 hours
be provided a second meal period and also expressly provided
that employees could voluntarily waive the second meal period
so long as they did not work more than 12 hours.
At the same time, the Legislature specifically gave the
Industrial Welfare Commission (IWC) authority to determine
whether to continue to authorize 12-hour alternative workweek
schedules, in Labor Code 517. In Labor Code 516, the
Legislature also expressly authorized the IWC to adopt or
amend the wage orders with respect to meal periods,
notwithstanding the rules set forth in Labor Code 512.
After several hearings on the matter and significant
negotiation between labor and hospital representatives, the
IWC decided to maintain 12-hour shifts, with some variation,
and to maintain the special healthcare meal period waiver
rules, allowing employees in the healthcare industry to waive
one of their meal periods even when a shift exceeded 12 hours.
This action was taken on June 30, 2000 - the deadline set by
the Legislature for the IWC to determine whether to continue
12-hour shifts. These amendments went into effect on October
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1, 2000. The time between the adoption date of June 30 and
the effective date of October 1 was needed to accomplish
administrative activity, such as updating the wage orders.
On September 16, 2000, the Governor signed urgency
legislation, SB 88. That bill limited the IWC's authority to
establish meal period rules that conflicted with Labor Code
section 512. That law went into effect more than two months
after the IWC adopted Wage Order 5 and 14 other wage orders.
There is no evidence to suggest that SB 88 was intended to
invalidate the action the IWC took on June 30, 2000 with
respect to the healthcare meal period rules. In order to
preserve the status quo preferred by both hospitals and their
employees for over 20 years, as confirmed by the IWC in 2000,
a legislative clarification is necessary."
The United Nurses Association of California/Union of Health Care
Professionals (UNAC), supports this measure, stating:
"Under this wage order provision, UNAC members have for years
enjoyed the flexibility of alternate work schedules, which
allows for greater staffing flexibility and better patient
care. Patient outcomes are dramatically improved in
environments where the nurses and other health care
professionals can place priority on the needs of their
patients without interruption by an arbitrary meal period when
the shift runs long. (RNs are generally able to eat during
work time in break rooms.) In addition, allowing health care
workers the option of working longer shifts enables them to
take extra days off during the work week, which in turn
ensures that they are fully rested when they return to work to
provide better patient care. Moreover, hospitals have enjoyed
the ability to have fewer shift changeovers.
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However, in a recent decision, the appellate court declared
Section 11(D) invalid because it authorized second meal
waivers for shifts longer than 12 hours. This decision
completely upends well-established staffing schedules and will
result in a severe disruption of the lives of our members,
many of whom have built a schedule of work, child care, and
other obligations around the ability to waive a second meal
period."
Similarly, the Service Employees International Union, United
Healthcare Workers West (SEIU-UHW) supports this bill, stating:
"Twelve hour shifts are overwhelming preferred by healthcare
workers because they work a shorter work week (3 days on, 4
days off). They spend less time commuting and more time with
family and friends. The enhanced work-life balance increases
job satisfaction and less burn-out. This is the benefit that
nurses cite most often in surveys about their shift
preferences. Having four full days away from the job can allow
you to enjoy your personal life to a greater extent or spend
more time with family. Hospitals find that this in turn
translates into better staff morale, less staff turnover, and
reduced absenteeism?Rather than risk overturning 22 years of
settled regulation we are asking for a legislative solution
that would simply codify the existing regulation into law."
REGISTERED SUPPORT / OPPOSITION:
Support
Adventist Health
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AFSCME
Anaheim Regional Medical Center
Arroyo Grande Community Hospital
Bakersfield Memorial Hospital
Beverly Hospital
California Children's Hospital Association
California Hospital Association
California Hospital Medical Center, Los Angeles
California Retailers Association
Cedars-Sinai Medical Center
Citrus Valley Health Partners
Community Hospital of San Bernardino
Community Medical Centers
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Corona Regional Medical Center
Delano Regional Medical Center
Dignity Health
Dominican Hospital, Santa Cruz
French Hospital Medical Center, San Luis Obispo
Glendale Memorial Hospital & Health Center, Glendale
Glenn Medical Center
Good Samaritan Hospital
Hospital Corporation of America
Keck Hospital of USC
Loma Linda University Health
Lompoc Valley Medical Center
Long Beach and Community Hospital Long Beach
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Long Beach Memorial
Madera Community Hospital
Marian Region Medical Center, Santa Maria/West Santa Maria
Marina Del Rey Hospital
Mark Twain St. Joseph's Hospital, San Andreas
MemorialCare Health System
Mercy General, Sacramento
Mercy Hospital, Folsom/Bakersfield
Mercy Medical Center, Merced/Mt. Shasta/Redding
Mercy San Juan Medical Center, Carmichael
Mercy Southwest Hospital, Bakersfield
Methodist Hospital of Sacramento
Miller Children's and Women's Hospital
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Northridge Hospital Medical Center
Orange Coast Memorial Medical Center
Palomar Health
Physicians for Healthy Hospitals
Providence Health & Services
Saddleback Memorial Medical Center
Saint Agnes Medical Center
Saint Francis Memorial Hospital, San Francisco
San Gorgonio Memorial Hospital
SEIU United Healthcare Workers West
Sequoia Hospital, Redwood City
Seton Medical Center
Sharp HealthCare
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Sierra Nevada Memorial Hospital, Grass Valley
St. Bernardine Medical Center, San Bernardino
St. Elizabeth Community Hospital, Red Bluff
St. John's Pleasant Valley Hospital, Camarillo
St. John's Regional Medical Center, Oxnard
St. Joseph's Behavioral Health Center, Stockton
St. Joseph's Health, Orange
St. Joseph's Medical Center, Stockton
St. Mary's Medical Center, Long Beach/ San Francisco
Stanford Health Care
Sutter Health
United Nurses Association of California/Union of Health Care
Professionals (Sponsor)
USC Norris Cancer Hospital
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USC Verdugo Hills Hospital
Woodland Healthcare, Woodland
Opposition
None on file.
Analysis Prepared by:Ben Ebbink / L. & E. / (916)
319-2091