BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 327|
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UNFINISHED BUSINESS
Bill No: SB 327
Author: Hernandez (D), et al.
Amended: 9/9/15
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE LABOR AND IND. REL. COMMITTEE: 4-0, 9/11/15 (pursuant
to Senate Rule 29.10)
AYES: Mendoza, Stone, Leno, Mitchell
NO VOTE RECORDED: Jackson
ASSEMBLY FLOOR: Not available
SUBJECT: Industrial Welfare Commission: wage orders: meal
periods
SOURCE: United Nurses Associations of California/Union of
Health Care Professionals
DIGEST: This bill clarifies that health care employee meal
period waiver provisions in existing Industrial Welfare
Commission wage orders have been valid and enforceable since
October 1, 2000.
Assembly Amendments gut and amend the previous contents of this
bill relating to alcoholic beverages in order to address the
meal period waiver provisions issue.
ANALYSIS:
Existing law:
1)Prohibits an employer from requiring an employee to work more
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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.
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 of employees 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:
1)Provides that, notwithstanding any other law, the healthcare
employee meal period waiver provisions of specified Wage
Orders of the IWC were valid and enforceable on and after
October 1, 2000, and continue to be valid and enforceable.
2)Provides that this provision is declarative of and clarifies
existing law.
3)Makes related legislative findings and declarations.
4)Contains an urgency clause.
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Background
The Industrial Welfare Commission: Existing law requires the IWC
to ascertain the wages paid to all employees in this state, to
ascertain the hours and conditions of labor and employment in
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, is
responsible for the 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.
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), 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.
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
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shifts of 12 hours or less?
?[T]he conflict between section 11(D) and section 512(a) 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?
Stated need for the 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 SB 88
(Sher, Chapter 492) enacting Labor Code Section 516, which reads
as follows:
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"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 this bill 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 provides 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. This bill states that it is declarative
of, and clarifies, existing law.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified9/11/15)
United Nurses Association of California/Union of Health Care
Professionals (source)
Adventist Health
AFSCME
Anaheim Regional Medical Center
Arroyo Grande Community Hospital
Aurora Vista del Mar Hospital
Avanti Hospitals
Bakersfield Memorial Hospital
Beverly Hospital
California Children's Hospital Association
California Employment Law Council
California Hospital Association
California Hospital Medical Center, Los Angeles
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California Labor Federation
California Retailers Association
Cedars-Sinai Medical Center
Citrus Valley Health Partners
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
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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
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
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Torrance Memorial Medical Center
USC Norris Cancer Hospital
USC Verdugo Hills Hospital
Valley Children's Hospital, Madera
Whittier Hospital Medical Center
Woodland Healthcare, Woodland
14 individuals
OPPOSITION: (Verified9/11/15)
Consumer Attorneys of California
ARGUMENTS IN SUPPORT: The California Hospital Association
supports this
bill, stating that this bill will clarify that employees in the
healthcare industry
can continue to waive one of their two meal periods pursuant to
IWC Wage Orders
4 and 5, even when their shift exceeds 12 hours. Absent
clarification that these
wage orders have been valid since they were adopted in June
2000, hospitals will
be liable for a missed meal period premium on any day an
employee worked even
one minute over the 12-hour mark. They argue that this could
result in millions of
dollars in liability, as well as scheduling changes throughout
the hospital industry.
Proponents further argue that while the California Supreme Court
recently accepted review of the Gerard case, 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 eight-hour shifts or taking
some other action to minimize potential liability moving
forward. They argue that 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
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analysis.
Proponents also argue the benefits of the flexibility of
alternate work schedules, which allows for greater staffing
flexibility and better patient care. Proponents further state
that rather than risk overturning 22 years of settled
regulation, they are asking for a legislative solution that
would simply codify the existing regulation into law.
ARGUMENTS IN OPPOSITION:The Consumer Attorneys of California
(CAOC) opposes this bill unless it is amended to be prospective
only, and argue that 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 argues that 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.
With regards to the pending litigation concern, CAOC argues that
the proposed language would expressly make the invalidated wage
order valid and would state that it is "declaratory of existing
law." They argue that this bill is designed to impact this
pending court case. Further, CAOC argues that 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.
Prepared by:Alma Perez / L. & I.R. / (916) 651-1556
9/11/15 19:26:27
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