BILL ANALYSIS
AB 244
Page 1
Date of Hearing: March 19, 2003
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Paul Koretz, Chair
AB 244 (Maze) - As Amended: March 10, 2003
SUBJECT : Wages: overtime.
SUMMARY : This bill eliminates various statutory requirements
relating to hours worked, daily overtime, alternative workweek
schedules, meal periods, and days of rest. Specifically, this
bill :
1)Defines a day's work as eight hours of labor unless employers
and employees have agreed by contract as to the number of
hours that constitute a day's work.
2)Eliminates the statutory requirement that work in excess of
eight hours a day, in excess of 40 hours a week, and the first
eight hours on the seventh day of work are to be compensated
at no less than one and one-half times the regular rate of
pay, and deletes corresponding exemptions for certain
classifications of employees.
3)Eliminates the statutory requirement that work in excess of 12
hours a day and in excess of eight hours on the seventh day of
work are to be compensated at no less than twice the regular
rate of pay, and deletes corresponding exemptions for certain
classifications of employees.
4)Eliminates the procedure by which the employees of an employer
may adopt an alternative workweek schedule that allows
employees to work no more than ten hours per day within a
40-hour workweek without receiving overtime.
5)Eliminates the requirement that employers provide meal periods
of not less than 30 minutes to employees who work in excess of
five hours per day and a second meal period to employees who
work in excess of ten hours per day.
6)Eliminates the procedure by which an employer may allow an
employee to make up lost work time during the same workweek
without paying daily overtime.
7)Eliminates the current overtime and alternative workweek
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exemption for employees covered by valid collective bargaining
agreements that meet certain conditions and instead provides
that the chapter of the Labor Code dealing with hours of work,
overtime, meal periods, and days of rest shall not apply when
the employer and a labor organization representing employees
of the employer have entered into any valid collective
bargaining agreement respecting the hours of work of the
employees.
8)Expands the exemption from the day of rest requirement for
emergency situations to exempt the entire chapter of the Labor
Code dealing with hours of work, overtime, meal periods, and
days of rest for emergency situations as well as work
performed in the necessary care of animals, crops or
agricultural lands.
9)Expands the exemption from the day of rest requirement for an
employee whose total hours of work do not exceed 30 hours in
any week or six hours in any day to cover the entire chapter
of the Labor Code dealing with hours of work, overtime, meal
periods, and days of rest.
10)Broadens the authority of the Chief of the Division of Labor
Standards Enforcement (DLSE) to exempt any employer or
employees from the day of rest requirement to allow the Chief
to exempt any employer or employees from the entire chapter of
the Labor Code dealing with hours of work, overtime, meal
periods, and days of rest.
11)Amends the provision of the Labor Code dealing with days of
rest to provide that nothing contained therein shall affect
any contracts in effect on the date of the amendment.
12)Requires any employer who intends to use a flexible
scheduling technique, as permitted by an order of the
Industrial Welfare Commission and requiring a vote of the
affected employees, to make full written disclosure to all
affected employees, except to those employees on leave of
absence for any cause. This bill requires that any disclosure
within the health care industry shall include meetings, duly
noticed, for the specific purpose of discussing the effects of
flexible scheduling.
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EXISTING LAW
1)Defines a day's work as eight hours of labor.
2)Requires that any work in excess of eight hours day, in excess
of 40 hours a week, and the first eight hours on the seventh
day of work are to be compensated at no less than one and
one-half times the regular rate of pay, and provides
corresponding exemptions for certain classifications of
employees.
3)Requires that any work in excess of 12 hours a day and in
excess of eight hours on the seventh day of work are to be
compensated at no less than twice the regular rate of pay, and
provides corresponding exemptions for certain classifications
of employees.
4)Allows employees of an employer to adopt a regularly scheduled
alternative workweek that authorizes work by the affected
employees for no longer than ten hours per day within a 40-
hour workweek without the payment of overtime. Such
alternative workweek schedules are permissible only if they
receive approval in a secret ballot election by two-thirds of
the affected employees.
5)Requires an employer to provide a meal period of not less than
30 minutes to an employee who works more than five hours per
day. Requires an employer to provide a second meal period if
an employee works more than ten hours per day, except that the
second meal period may be waived by mutual consent if the
employee works less than 12 hours and has not waived the first
meal period.
6)Permits an employee, upon written request, to make up lost
work time during the same workweek without incurring daily
overtime.
7)Provides an exemption to the overtime and alternative workweek
provisions of the law to an employee covered by a valid
collective bargaining agreement if the agreement expressly
provides for wages, hours of work, and working conditions of
the employees, and if the agreement provides premium wage
rates for all overtime hours worked and a regularly hourly
rate of pay at least 30% above the state minimum wage.
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8)Provides that an employee is entitled to one day's rest in
seven. Provides an exemption from the day of rest requirement
in cases of emergency or where work is performed in protection
of life or property from loss or destruction, and to railroad
common carriers.
9)Provides an exemption from the day of rest requirement for an
employee whose hours worked do not exceed 30 hours in any week
or six hours in any day.
10)Authorizes the Chief of DLSE to exempt any employer or
employee from the day of rest requirement when, in his or her
judgment, hardship will result.
FISCAL EFFECT : Unknown
COMMENTS :
This bill effectively repeals various provisions of AB 60
(Knox), the "Eight-Hour-Day Restoration and Workplace
Flexibility Act of 1999."
Brief Background on AB 60
Beginning in 1913, the Industrial Welfare Commission (IWC) had
jurisdiction over working hours only of women and minors.
Exercising its authority, the IWC established daily overtime
after eight hours for those groups. In 1974, the discriminatory
impact of this approach was struck down in federal court. The
IWC's efforts to adopt new wage orders led to a protracted legal
battle. In 1980, the California Supreme Court upheld the
adoption of final wage orders incorporating the eight-hour day
for male and female employees.
Those wage orders remained in effect until January 1, 1998, when
the IWC amended five of them to eliminate daily overtime and
provide that: "No overtime pay shall be required for hours
worked in excess of any daily number" (Emphasis added). That
action resulted in an unsuccessful legal challenge, legislation
including SB 680 (1997) which was passed but vetoed by Governor
Wilson, and ultimately AB 60, which was successfully passed and
signed by Governor Davis effective January 1, 2000.
AB 60 established daily overtime after eight hours as the
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general rule in California. It contained two prominent features
related to flexibility. First, it provided for the adoption of
alternative workweek schedules pursuant to an employee election.
Second, it allowed employees to take off time for a personal
obligation and makeup that time during the same workweek without
payment of daily overtime. AB 60 also codified wage order
requirements for meal periods after five hours of work, and
added a requirement for a second meal period after ten hours of
work.
Arguments in Support
Supporters contend that AB 60 has been devastating to small
business and has created an unnecessary hardship for employees.
Supporters state that many types of flexible schedules are no
longer available to employees because of the change in overtime
rules. Therefore, reinstatement of the 40-hour workweek in
California would allow employees to work individually designed
work schedules that can help accommodate and balance the demands
of both home and work. Supporters also argue that this bill
will make California businesses more competitive.
Arguments in Opposition
Opponents argue that this bill would repeal the core wage and
hour laws of the state of California designed to protect
California workers. This bill would, among other things, repeal
the requirement for daily overtime and the right to receive meal
and rest breaks on the job. Opponents state that the eight-hour
day has been the law in California since 1913, when it was first
enacted for the protection of women and children. It was
extended to male employees in the late 1970s and has been a
universal feature of California labor law for 30 years, with the
exception of a brief period in the 1990s when the eight-hour day
was repealed by the Wilson administration. Opponents state that
current law provides important protection to current workers
against being forced to work long hours, unsafe working
conditions, and difficulties relating to child care.
Opponents also argue that one of the essential reasons for the
overtime pay law is to encourage employers to hire new employees
rather than burdening incumbent employees with extra work time.
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Therefore, the current law is an important tool in alleviating
the relatively high rate of unemployment.
Other Bills
Two similar measures, SBX1 (Poochigian) and SB 1010
(Poochigian), have been introduced in the Senate this year.
REGISTERED SUPPORT / OPPOSITION :
Support
American Electronic Association
American Specialty Health Plans
Association of California Water Agencies
Automotive Aftermarket Services
Barthuli & Associates Insurance Services, Inc.
BIOCOM, San Diego
California Beer and Beverage Distributors
California Chamber of Commerce
California Independent Petroleum Association
California Manufacturers & Technology Association
California Natural Gas Producers Association
California Restaurant Association
Chico Chamber of Commerce
Flores Lund Consultants
Home Health Care, Inc.
Irvine Chamber of Commerce
Kornberg Associates
Modesto Chamber of Commerce
National Federation of Independent Business
Northern California Medical Associates
Redondo Beach Chamber of Commerce & Visitors Bureau
Robert Talbott
Sierra Select Distributors, Inc.
Tulare Chamber of Commerce
Visalia Chamber of Commerce
Waste Recovery West. Inc.
Yoder & Co. CPA
Opposition
American Federation of State, County and Municipal Employees,
AFL-CIO
California Conference Board of the Amalgamated Transit Union
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California Conference of Machinists
California Correctional Supervisors Organization
California Labor Federation, AFL-CIO
California School Employees Association
California State Association of Electrical Workers
California State Council of Laborers
California State Employees Association
California State Pipe Trades Council
California Teamsters Public Affairs Council
Coalition of California Utility Employees
Elevator Constructors International Union
Engineers and Scientists of California, Local 20
Hotel Employees, Restaurant Employees International Union
International Association of Plumbing and Mechanical Officials
Professional and Technical Engineers, Local 21
Region 8 States Council of the United Food & Commercial Workers
Service Employees International Union (SEIU)
Western States Council of Sheet Metal Workers
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091