BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: June 23, 2010 2009-2010 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: AB 569
Author: Emmerson
Version: As Amended June 16, 2010
SUBJECT
Meal periods: exemptions.
KEY ISSUE
Should the Legislature exempt employees in certain industries
from meal period laws if the employees are covered by a
collective bargaining agreement?
PURPOSE
To provide greater meal period flexibility in certain industries
for employees covered by a collective bargaining agreement.
ANALYSIS
Existing law requires, with certain exemptions, that all
employees receive a meal break of 30 minutes before the start of
the 5th hour of work, unless the work period is no more than six
hours and both the employer and the employee choose to waive the
meal period by mutual consent.
Meal period exemptions apply to:
a) Employees in the wholesale baking industry, when covered
by a collective bargaining agreement;
b) Employees in the motion picture industry, when covered
by a collective bargaining agreement; and
c) Public transit bus drivers covered by a collective
bargaining agreement.
Existing law requires that if the work period is more than ten
hours, a second meal period of 30 minutes must also be granted
to an employee. This second meal period can be waived by the
mutual consent of the employer and employee, but only if the
work period is no more than 12 hours, and the first meal period
was not waived.
Existing law states that if an employer fails to provide a meal
break, the employer must give the employee one hour of
additional premium wages at the employee's regular rate of
compensation for each workday that a meal period was not
provided. If unpaid, existing law requires that this wage
accrues for 30 days and the statute of limitations on its
collection runs for 3 years.
Existing wage orders state that employees in the transportation
and construction industries must be relieved of all duty during
the meal break. Otherwise, the meal break is considered "on
duty" and counted as work. An "on duty" meal break may be
allowed only when the nature of the work prevents an employee of
being relieved of all work duties, and when a written agreement
between the employer and employee for an on-the-job paid meal
break period is agreed to. The employee may revoke the
agreement in writing at any time.
This bill would exempt employees in the following industries:
Construction;
Commercial drivers in the transportation industry, as
defined;
Security officers employed by private patrol operators;
and
Gas companies, electric companies, and publicly owned
utilities
Those employees are only exempted if they are covered by a
collective bargaining agreement, and that agreement:
1) Expressly provides for the wages, hours of work, and
working conditions of employees, and expressly provides for
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
meal periods for those employees,
2) Provides final and binding arbitration of disputes
concerning application of its meal period provisions, and
3) Provides a premium wage rates for all overtime hours
worked, and a regular hourly rate of pay of not less than
30 percent more than the state minimum wage rate.
This bill would also declare that these meal period exemptions
do not affect the nature or scope of existing law related to
meal periods for employees or employers not specifically covered
by the exemptions.
COMMENTS
1. Legislative Background:
In 1999, AB 60 (Knox) became law, which included the codification
of the Industrial Welfare Commission (IWC) Wage Order requirement
that all employers provide a meal period for their employees.
Prior to AB 60, meal periods had been required by the regulatory
IWC Wage Orders, but, with the exception of a few industries, were
not statutorily required. The following year, AB 2509 (Steinberg)
created the monetary punishment for employers who do not provide a
meal period for their employees.
In 2002, the Department of Labor Standards Enforcement (DLSE)
enforcement manual interpreted the requirement of the employer to
provide a meal period as a responsibility that falls directly on
the employer to ensure that the employee takes a meal period, much
as it is the employer's responsibility to ensure that his or her
employee is paid the minimum wage.
Two years later, the DLSE sought to create emergency
regulations to define the requirement to provide a meal period
to "supply" or "make available". These regulations were
withdrawn in 2005, and the DLSE decided to not move forward
with further meal period regulations in 2006. This left the
2002 DLSE interpretation intact.
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
During this period, Wage Order 16, which applied to
construction employees, contained a collective bargaining
exemption for construction employees. However, in 2006, a
California Court of Appeal held in Bearden v. U.S. Borax, Inc
that this collective bargaining exemption contained in Wage
Order 16 conflicted with the Labor Code and was therefore
invalid.
On July 22, 2008, the California Court of Appeal in Brinker
Restaurant Corporation v. Superior Court of San Diego County
(Hohnbaum) (2008) interpreted existing law and the IWC Wage
Order meal period provisions as a requirement for employers to
provide meal periods by making them available, but need not
ensure that they are taken. Employers, however, cannot impede,
discourage or dissuade employees from taking meal periods.
However, On October 22, 2008, the California Supreme Court
granted review of the California Court of Appeal decision in
Brinker Restaurant Corp. v. Superior Court of San Diego County
(Hohnbaum). The Supreme Court's grant of review supersedes the
Court of Appeal's decision. The Supreme Court is expected to
confirm, among other things, whether the meal period laws and
regulations impose upon employers a responsibility to ensure
that employees actually take the meal period, or rather that
the employer's obligations is simply to make that meal period
available to the employee and afford the employee the
opportunity to take the meal period.
Until the Supreme Court can clarify the meaning of Labor Code
512, the new position of the DLSE is that "[t]aken together,
the language of the statute and the regulation, and the cases
interpreting them demonstrates compelling support for the
position that employers must provide meal periods to employees
but do not have an additional obligation to ensure that such
meal periods are actually taken." (Emphasis added.)
AB 569 would exclude commercial drivers and construction
employees covered by a collective bargaining agreement from
Labor Code 512, which would side-step the question of the
provision of a meal period for other employees in these
industries.
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations
2. Collective Bargaining Exemptions in Other States:
Excluding California, of the 19 states where meal periods for
non-minor employees are provided in statute, 10 states
(Connecticut, Delaware, Illinois, Kentucky, Maine, Minnesota,
Nebraska, Nevada, North Dakota, and Oregon) exempt collective
bargaining agreements that address meal periods from meal
period law.
Other states have regulatory or industry-specific collective
bargaining exemptions. Massachusetts has the possibility for
regulatory exemptions, and explicitly mentions collective
bargaining agreements in the statute that creates the
regulatory exemptions. Washington has collective bargaining
exemptions for employees in the construction industry.
California's collective bargaining exemptions were discussed
above.
3. Who Does this Exemption Apply to in the Transportation
Industry?
Unlike previous incarnations of this bill, the "commercial
driver" exemption has been broadened to include not just
individuals with a commercial license, but also paratransit
vehicles and commercial vehicles used to transport individuals
or property for hire. Paratransit vehicles are vehicles
primarily used to transport disabled persons, persons with
disabilities, and persons who are 55 years old or older.
Examples of vehicles for hire would include limousines, taxis,
and sedans.
4. Proponent Arguments :
The supporters of AB 569, which includes United Parcel Service
(UPS) and Associated General Contractors (AGC), argue that
this bill will provide an immediate necessary flexibility for
collectively bargained commercial drivers and employees of the
construction industry. UPS notes that, while they continue to
support broader approaches to meal period flexibility, UPS
argues that it cannot continue to discipline their
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations
collectively bargained drivers when flexible solution agreed
to by management and employers is available.
Associated General Contractors (AGC) argues that the various
interpretations of meal period law by enforcement officials
have led to significant confusion and litigation. AGC reports
that in order to avoid liability, contractors are forced to
police their workforce to their meal periods without
interruption. Although many construction companies operate
under collective bargaining agreements, they have lost their
ability to bargain on the meal period issue due to Bearden v.
Borax. Finally, AGC notes that, in this economic climate,
providing flexibility for collectively bargained contractors
will supply key relief from litigation.
5. Opponent Arguments :
The California Nurses Association (CNA) argues that by carving
out groups of workers under collective bargaining agreements
will compromise basic labor law that protects the ability of
all workers to have a lunch break. CNA believes that carving
out specific industries will encourage other employers to push
for similar exemptions, which employers will use as a
take-away during negotiation. CNA notes that it is difficult
for RNs to receive meal breaks due to staffing issues and
nurse to patient ratio laws. CNA believes that the best way
for RNs to take their meal breaks is to be backed-up by
existing law, and therefore opposes any collective bargaining
carve out that could create a precedent for the healthcare
industry.
Other opponents, such as the California Manufacturing and
Technology Association, the California Hospital Association,
the Associated Builders and Contractors of California, and
other employer organizations, have taken an 'oppose unless
amended' position, arguing that AB 569 should be amended to
provide meal period flexibility to all employers. These
opponents feel that current meal period law is too rigid and
inflexible, and AB 569 should follow the example of other meal
period legislation that applied to all employers.
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 6
Senate Committee on Labor and Industrial Relations
6. Prior Legislation :
AB 2593 (Keene) of 2005, would have exempted commercial
drivers from meal period provisions. AB 2593 was vetoed by
the Governor in 2005. In his veto message, the Governor said
that he vetoed AB 2593 because it singled out a specific
industry, and the Governor felt it could imperil ongoing
litigation.
AB 1734 (Koretz), Statutes of 2005, Chapter 414, exempted
certain employees in the motion picture industry from meal
period requirements if they were covered by a valid collective
bargaining agreement with specified terms.
AB 3018 (Koretz) of 2003, which contained language identical
to AB 2593 of 2005, allowed commercial drivers to negotiate
meal period requirements if covered by a collective bargaining
agreement. It was vetoed by the Governor.
SUPPORT
United Parcel Service (UPS) - Sponsor
AFA Chapter
Associated General Contractors
CAL SMACNA
California Fence Contractors Association - CFCA
California Legislative Conference of the Plumbing, Heating and
Piping Industry CLC
Construction Employers' Association - CEA
Engineering & Utility Contractors Association - EUCA
Engineering Contractors' Association - ECA
Flasher Barricade Association
Marin Builders Association
MV Transportation, Inc. Fairfield, CA
National Electrical Contractors Association NECA
Southern California Contractors Association - SCCA
OPPOSITION
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 7
Senate Committee on Labor and Industrial Relations
Associated Builders and Contractors of California (Oppose Unless
Amended)
California Employment Lawyers Association (CELA)
California Hospital Association (Oppose Unless Amended)
California Manufacturers and Technology Association (Oppose
Unless Amended)
California Nurses Association/National Nurses Organizing
Committee
National Federation of Independent Business (Oppose Unless
Amended)
National Gypsum (Oppose Unless Amended)
USS-POSCO Industries (Oppose Unless Amended)
* * *
Hearing Date: June 23, 2010 AB 569
Consultant: Gideon L. Baum Page 8
Senate Committee on Labor and Industrial Relations