BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: SB 327 Hearing Date: September
11, 2015
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|Author: |Hernandez |
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|Version: |September 8, 2015 |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|Alma Perez-Schwab |
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Subject: Industrial Welfare Commission: wage orders: meal
periods.
KEY ISSUE
Should the Legislature clarify that health care employee meal
period waiver provisions in existing Industrial Welfare
Commission wage orders have been valid and enforceable since
October 1, 2000 in order to address a recent court ruling?
ANALYSIS
Existing law:
(Labor Code §512)
1) Prohibits an employer from requiring an employee to work
more than five hours per day without providing a meal
period of not less than 30 minutes, except that if the
total workday is no more than six hours, the meal period
may be waived by mutual consent of both the employer and
employee.
2) Prohibits an employer from requiring an employee to work
more than 10 hours per day without providing 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 only if the
first meal period was not waived.
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3) Exempts specified employees covered by a valid
collective bargaining agreement that expressly provides for
the wages, hours of work, and working conditions of
employees, as specified.
4) Establishes the Industrial Welfare Commission (IWC) to
regulate wages, hours and working conditions in California
and authorizes the Commission to adopt a working condition
order permitting a meal period to commence after six hours
of work if the commission determines that the order is
consistent with the health and welfare of the affected
employees. [Labor Code §512 (b)]
This Bill would enact 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.
COMMENTS
1. Background: Industrial Welfare Commission
Existing law requires the Industrial Welfare Commission (IWC)
to ascertain the wages paid to all employees in this state, to
ascertain the hours and conditions of labor and employment in
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the various occupations, trades, and industries in which
employees are employed in this state, and to investigate the
health, safety, and welfare of those employees. Existing law,
except as provided in that described meal period provision,
authorizes the commission to 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. The Division of Labor
Standards Enforcement, within the Department of Industrial
Relations for enforcement of labor laws, including orders of
the commission. IWC wage orders must be posted by all
employers in an area frequented by employees, where they may
be easily read during the workday.
Existing law requires the commission, by July 1, 2000, to
adopt wage, hours, and working conditions orders necessary to
ensure fairness in the establishment of employee workweek
schedules. Existing law further requires the commission, by
July 1, 2000, to conduct reviews of wages, hours, and working
conditions in specified industries and to adopt or modify
regulations necessary to protect the health, safety, and
welfare of workers in those industries. Existing wage orders
of the commission provide that employees in the health care
industry who work shifts in excess of 8 total hours in a
workday may voluntarily waive their right to 1 of their 2 meal
periods in a prescribed manner. Existing law prohibits an
employer from requiring an employee to work during a meal or
rest or recovery period mandated by an applicable statute, or
applicable regulation, standard, or order of the commission,
the Occupational Safety and Health Standards Board, or the
Division of Occupational Safety and Health, and establishes
penalties for an employer's failure to provide a mandated meal
or rest or recovery period.
The IWC is currently not in operation. The Division of Labor
Standards Enforcement (DLSE) continues to enforce the
provisions of the wage orders.
2. Gerard v. Orange Coast Memorial Medical Center
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),
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the California Court of Appeal concluded that certain language
contained in a Wage Order of the Industrial Welfare Commission
was invalid to the extent it conflicts with Labor Code Section
512. Specifically, Labor Code section 512 prohibits waiver of
the second meal period when an employee works more than 12
hours. Wage Orders 4 and 5, section 11(d) has allowed such
waivers for employees in the healthcare industry since 1993.
The Court also concluded that its ruling should be applied
retroactively.
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. 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 (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
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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,
employees in 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
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.
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?
3. Need for this bill?
Section 11(D) of Wage Order 5-2001 first became effective on
October 1, 2000. However, prior to that date, the Legislature
passed and the Governor signed Senate Bill 88 as an urgency
measure that became effective upon signature. SB 588 enacted
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Labor Code section 516, which reads as follows:
"Except as provided in Section 512, the IWC 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.
Proponents of the measure argue the need for clarification 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. This bill would provide that the health care employee
meal period wavier provisions in the existing wage orders were
valid and enforceable on and after October 1, 2000, and
continue to be valid and enforceable. The bill would state
that it is declarative of, and clarifies, existing law.
4. Proponent Arguments :
The California Hospital Association supports this measure,
stating:
"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?
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?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."
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.
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
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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."
5. Opponent Arguments :
The Consumer Attorneys of California opposes this measure
unless it is amended to be prospective only, stating:
"Should this bill be enacted, it would impact pending
litigation before the California Supreme Court, overturn a
recent California Appellate Court decision, Gerard v. Orange
Coast Memorial Medical Center 234 Cal. App. 4th 285 (2015),
and affected workers could lose wages as a result of its
passage.
CAOC has always opposed, and will continue to oppose, any
effort to affect pending litigation. It is simply against
public policy to legislatively affect a consumer's existing
legal right in a manner that retroactively guts a claim that
was already filed, in good faith, with the law of the date of
filing applicable."
CAOC further argues that SB 327 impacts pending litigation,
stating:
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"The California Supreme Court granted review on May 20, 2015
so this is pending litigation. 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 Wage
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? The proposed language would expressly make the
invalidated wage order valid and would state that it is
"declaratory of existing law." This bill is designed to impact
this pending court case."
According to CAOC, the effect of this legislation, granting
hospitals retroactive relief from liability for unpaid wages,
could be to deny workers past wages they have already earned.
They argue that the Court has already decided to issue a
ruling on these issues and they think it is best to wait for
the Supreme Court to issue its ruling in Gerard. CAOC argues
that these issues could be decided as early as next year and
rather than introduce a later gut and amend, they feel that
the best action would be to wait for the Supreme Court to
issue its ruling.
SUPPORT
United Nurses Association of California/Union of Health Care
Professionals (Sponsor)
Adventist Health
AFSCME
Anaheim Regional Medical Center
Arroyo Grande Community Hospital
Aurora Vista del Mar Hospital
Bakersfield Memorial Hospital
Beverly Hospital
California Children's Hospital Association
California Employment Law Council
California Hospital Association
California Hospital Medical Center, Los Angeles
California Labor Federation, AFL-CIO
California Retailers Association
Cedars-Sinai Medical Center
Citrus Valley Health Partners
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City of Hope
Civil Justice Association of California
Community Hospital of San Bernardino
Community Medical Centers
Corona Regional Medical Center
Delano Regional Medical Center
Desert Valley Hospital
Dignity Health
Dominican Hospital, Santa Cruz
El Camino Hospital
Enloe Medical Center
French Hospital Medical Center, San Luis Obispo
Gardens Regional Hospital and Medical center
Glendale Adventist Medical Center
Glendale Memorial Hospital & Health Center, Glendale
Glenn Medical Center
Good Samaritan Hospital
Hospital Corporation of America
Keck Hospital of USC
Kindred Hospital, Riverside/Ontario/Rancho Cucamonga
Kindred Hospital, San Francisco Bay Area
Lodi Memorial Health
Loma Linda University Health
Lompoc Valley Medical Center
Long Beach and Community Hospital Long Beach
Long Beach Memorial
Los Robles Hospital & Medical Center
Madera Community Hospital
Mammoth Hospital
Marian Region Medical Center, Santa Maria/West Santa Maria
Marin General Hospital
Marina Del Rey Hospital
Mark Twain St. Joseph's Hospital, San Andreas
Marshall Medical center
Memorial Care 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
Monterey Park Hospital
Northridge Hospital Medical Center
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O'Connor Hospital
Orange Coast Memorial Medical Center
Palo Verde Hospital
Palomar Health
Parkview Community Hospital Medical Center
Physicians for Healthy Hospitals
Pioneers Memorial Healthcare District
Providence Health & Services
Redlands Community Hospital
Saddleback Memorial Medical Center
Saint Agnes Medical Center
Saint Francis Memorial Hospital, San Francisco
San Antonio Regional Hospital
San Gorgonio Memorial Hospital
San Joaquin Valley Rehabilitation Hospital
Scripps Health
SEIU United Healthcare Workers West
Sequoia Hospital, Redwood City
Seton Medical Center
Sharp HealthCare
Sidley Austin LLP
Sierra Nevada Memorial Hospital, Grass Valley
Southwest Healthcare System Murrieta & Wildomar
St. Bernadine 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. Jude Medical Center, Fullerton
St. Mary Medical Center, Apple Valley
St. Mary's Medical Center, Long Beach/ San Francisco
Stanford Health Care
Stanford Health Care - Valley Care
Sutter Health
Torrance Memorial Medical Center
USC Norris Cancer Hospital
USC Verdugo Hills Hospital
Whittier Hospital Medical Center
Woodland Healthcare, Woodland
14-individuals
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OPPOSITION
Consumer Attorneys of California
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