BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: February 24, 2010 2009-2010 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: SBX8 70
Author: Dutton
Version: As Introduced February 16, 2010
EIGHTH EXTRAORDINARY SESSION
SUBJECT
Meal Periods.
KEY ISSUE
Should the Legislature extend the time in which an employee can
take a meal period, redefine the employer's responsibility for
providing his or her employees a meal period, codify and expand
qualifying circumstances for on-duty meal period agreements,
remove the ability of employees to revoke on-duty meal period
agreements, and decrease the statute of limitations for failing
to provide a meal period?
PURPOSE
To grant employers greater flexibility to provide meal periods,
expand the number of qualifying circumstances for creating
on-duty meal period agreements, and also reduce the punishment
for failing to provide a meal period.
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.
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 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 , which are regulations established by the
Industrial Welfare Commission, allow for on-duty meal periods
where the employee is not relieved of work responsibilities, but
the employee is allowed to eat while they work. An on-duty meal
period may only be taken if the nature of the work prevents an
employee from being completely relieved of work, or if the
employee falls under the following circumstances:
a) Employed in the Public Housekeeping Industry and has
direct responsibility for children under 18 years of age or
who are not emancipated from the foster care system and are
receiving 24 hour residential care;
b) Employed in the public housekeeping industry and work at
a 24 hour residential care facility for the elderly, blind
or developmentally disabled individuals and regulations or
law require it, or if the meal is provided at no charge to
the employee and the employee eats with the residents or is
in sole charge of the residents.
All on-duty meal period agreements must be in writing, and the
employee may revoke the on- duty meal period agreement at any
time .
This Bill would:
1) Require an employer to provide an off-duty meal period
to his or her employee if the employee is covered by an
Industrial Welfare Commission wage order before the
conclusion of the sixth hour of work, unless the employee
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Senate Committee on Labor and Industrial Relations
works no more than six hours and both the employer and
employee agree to waive the employer's responsibility to
the meal period;
2) Remove the requirement that a second meal break given to
an employee who works more than 10 hours can only be waived
if the first meal period was taken, and instead requires
that only one of the meal periods needs to be taken;
3) Define, for the purposes of enforcement, an employer's
responsibility to provide a meal period as making a meal
period available without interference;
4) Define, for the purposes of providing a meal period, an
employer's responsibility to provide a meal period as
giving the employee an opportunity to take;
5) Permits the use of an on-duty meal period instead of an
off-duty meal period if all of the following requirements
are met:
The employer and the employee have entered
into a written agreement for an on-duty meal period;
The employee has an opportunity to eat while
on duty and is counted as time worked; and
The nature of the work prevents the employee
from being relieved of all duty.
SBX8 70, therefore, removes the obligation of the employer to
allow the revocation of an on-duty meal period agreement if the
employee requests it.
1) Provides that the "nature of work" requirement for
on-duty meal periods only applies if one of more of the
following conditions exist:
The employee works alone or is the only person
in the employee's job classification who is on-duty at
the location or in the department, or there are no
other qualified employees who can reasonably relieve
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the employee of all duty.
State or federal law imposes a requirement
that the employee remain on-duty at all times.
The nature of the work or the relevant
circumstances makes it unreasonable or unsafe for the
employee to be relieved of all duty.
The work product or process will be destroyed
or damaged by relieving the employee of all duty.
The employee works with perishable products,
including the transportation and delivery of those
products, and therefore cannot reasonably be relieved
of all duty.
The employee has direct responsibility for
children who are under 18 years of age or who are not
emancipated from the foster care system and who, in
either case, are receiving 24-hour residential care,
or is an employee of a 24-hour residential care
facility for the elderly, blind, or developmentally
disabled individuals.
1) Change an employer's punishment for not providing a meal
period to a simple penalty equal to an hour of work, rather
than a premium wage penalty of one hour of work, which
decreases the statute of limitations for enforcement
purposes from three years to one year.
COMMENTS
1. Legislative Background - Meal Periods:
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)
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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.
However, 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.
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
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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.)
2. Legislative Background - Premium Wage Penalties
On the question of the monetary punishment for not providing a
meal period, the question was somewhat muddled due to the
contradictory opinion letters issued by the Labor
Commissioner. The same 2004 DLSE regulations sought to change
the monetary punishment for failing to provide a meal period
to a penalty, rather than a premium wage, which would have
changed the statute of limitations to one year, rather than
three for an uncollected wage, but the regulations were not
put into action.
In 2005, the Labor Commissioner issued a Precedent Decision,
Hartwig v. Orchard Commercial, Inc., which again set the
monetary penalty to a penalty. The issue was litigated before
the California Supreme Court in Murphy v. Kenneth Cole
Productions, Inc., and in a 2007 decision, the California
Supreme Court found that the monetary punishment was a premium
wage, and therefore overturned the Labor Commissioner's
Precedent Decision, setting the statute of limitations to
three years.
SBX8 70, therefore, would seek to codify the language similar
to the DLSE regulations of 2004 by setting in code the
monetary punishment as a penalty and, for the purposes of
enforcement, define the provision of a meal period as not
interfering with an employee taking a meal period.
3. Staff Comments:
1) Defining "providing" and the issue of enforcement:
During this legislative session, multiple bills have come
before the Committee that seek to redefine the term "provide"
in Labor Code 512. The relevant language in 512 reads as
follows:
"An employer may not employ an employee for a
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work period of more than five hours per day
without providing the employee with a meal period
of not less than 30 minutes?." (Emphasis added.)
SBX8 70 seeks to define an employer responsibility to provide
a meal period as "giving the employee an opportunity to take",
which is similar to the interpretation the Brinker court
reached in defining what it means to provide a meal period.
The Brinker court ruled that, while employers cannot "impede,
discourage or dissuade" employees from taking a meal period,
they do not need to ensure meal periods are taken. As was
stated above, the Division of Labor Standards Enforcement
(DLSE) has also taken the position that employers do not need
to ensure that meal periods are taken.
As the Committee looks at these issues, it may want to take
into account issues that the Brinker court did not--- how
would the State enforce the availability of meal periods?
What does it mean to "give an opportunity to take" a meal
period to employees? If the discouragement or dissuasion of
meal periods was passive, would that violate existing meal
period law? What if it came from co-workers or was a part of
the culture of the workplace? As the responsibility of
providing the meal period is shifted from the employer to
simply being an available option for an employee, these
questions become germane and difficult to answer. The
Committee may want to consider if we are simply swapping the
question of the meaning of the word "provide" for the words
"impede, discourage or dissuade" or "to make available" or "to
interfere".
2) Other Enforcement Issues in SBX8 70:
As was discussed above, SBX8 70 creates a new definition for
"providing" a meal period. However, for the purposes of
enforcement, SBX8 70 creates a separate definition completely
different from the first (see page 3, lines 13 through 15):
(c) For purposes of this section, an
employer provides a meal or rest period
by making one available to the employee
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without interfering with its use.
(Emphasis added)
SBX8 70 does not, however, define what "interfering" or "to
interfere" means, running into similar challenges that many in
the business community ascribe to the statute's current use of
the term "provide". Blacks Law Dictionary (Seventh Edition,
1999) defines interference as "the act of meddling in
another's affairs" or "an obstruction or hindrance".
Miriam-Webster's Collegiate Dictionary (Tenth Edition, 2001)
gives a similar definition.
But it is unclear what would qualify as an obstruction or
hindrance as per Labor Code 512. While physically or
verbally preventing an employee from taking a meal period
would probably be viewed as an obstruction or hindrance, it is
unclear if a veiled or passive comment from an employer to an
employee suggesting that the employee not take a meal break
would.
Finally, creating a separate definition for the purposes
enforcement could easily create confusion for employers as to
which definition they should follow. Is it enough to simply
"give an opportunity to take" a meal period? Or does an
employer need to ensure that he or she doesn't "interfere"
with taking a meal period? And since "interfere" appears to
fall outside of the parameters of the Brinker court's
definition of "provide", SBX8 70 could create additional legal
liabilities for California's employers without resolving the
central issue in the Brinker case.
In short, the term "interference" may be too broad, and the
Committee may want to explore the use of other terminology, or
simply using the same definition in SBX8 70 when amending
Labor Code 226.7 and 512.
3) What is the full impact of stating that SBX8 70 is
declaratory of existing law?
The declaration at the end of SBX8 70 (page 5, lines 31-33)
creates several questions that the Committee may want to
explore further.
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The primary challenge with stating that SBX8 70 is declaratory
of existing law is that it appears the bill goes beyond
clarifying or declaring existing law. For example, changing
the requirements for when an employee who works more than 10
hours can waive his or her second meal period appears to be a
departure from Labor Code 512. While the on-duty meal
requirements are found in the IWC wage orders, SBX8 70 would
increase the number of circumstances where on-duty meal
periods would be allowable, as well as restrict the ability of
an employee to revoke the agreement.
In the arena of on-duty meal periods, stating that SBX8 70 is
declaratory of existing law has a particularly large potential
impact. As currently written, the language on on-duty meal
periods (page 4, lines 6-34) does not grant the ability of an
employee to revoke his or her written agreement to take an
on-duty meal period, as is explicitly granted by the
Industrial Welfare Commission (IWC) wage orders. Since IWC
wage orders are regulatory, SBX8 70 would take precedence, and
therefore would replace those existing on-duty meal period
agreements. If SBX8 70 were to become law, this could prevent
employees from revoking their on-duty meal period agreement,
irrespective of the fact that they had that right before SBX8
70 became law.
Finally, this language would also have a significant impact on
outstanding litigation and Labor Commissioner actions seeking
premium wage penalties from employers that failed to provide
meal periods to their employees, as the definition of
"provide" in SBX8 70 differs from the historical definition of
the Department of Labor Standards Enforcement's (DLSE)
definition of "provide", as was discussed above, and would
also impact the ongoing Brinker case.
4) What is the status of exempt employees under SBX8
70?
The Department of Labor Standards Enforcement (DLSE)
Enforcement manual states that, since Labor Code 512 does
not exclude any class of employee, all employees of the state
of California fall under its requirements, though premium wage
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penalties do not apply for employers who fail to provide a
meal period to an exempt employee. Exempt employees include
executives, administrators, supervisors, managers, and
professionals.
Exempt employees also include any employees directly employed
by the State or any political subdivision thereof, including
any city, county, or special district. While there is limited
case law on if Labor Code 512 applies to public sector
workers, it is probable that it does not, though this area of
the law remains largely untested.
Since SBX8 70 would amend Labor Code 512 to specifically
reference employees who are covered by Industrial Welfare
Commission (IWC) wage orders, and IWC wage orders do not cover
exempt employees, SBX8 70 would prevent meal period laws from
covering exempt employees.
5) The role of the Legislature and Meal Periods
With the passage of Proposition 14 on June 8, 1976, the people
empowered the Legislature to provide for the general welfare
of all employees, and that these powers may be conferred onto
a commission. Since that time, that role has been given to
the Industrial Welfare Commission (IWC), which promulgates
regulatory wage orders for general industrial categories of
employees. While the IWC has not been funded for several
years, the Commission does still exist. The Committee may
wish to consider if binding meal period law to a regulatory
process that the Legislature has limited control over would
best serve the employer and employee communities.
4. Possible Amendments:
1)On page 4, lines 38-40, and page 5, lines 1-3, the bill
instructs the Industrial Welfare Commission (IWC) to reprint
all IWC wage orders to be consistent with this law. On page
5, line 3, however, the line requires that the IWC "shall make
no other changes to the wage orders". This language could
prevent the IWC from taking any future action or establishing
wage orders. The Committee may want to consider striking line
3, which would prevent this problem.
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2) On page 3, lines 39 and 40, and page 4, lines 1-5, the
language is as follows:
Except as authorized by an Industrial Welfare
Commission wage order in effect as of January 1,
2008, if an employee works no more than 12 hours in
a workday, the employer and employee may agree to
waive the employer's duty of providing the employee
with either the first or the second meal period, but
not both.
This language is confusing for several reasons:
a) The phrase "Except as authorized by an Industrial
Welfare Commission wage order in effect as of January 1,
2008", is non-specific and confusing, as all of the Wage
Orders currently authorize a different process from what is
set down in SBX8 70. However, Wage Orders 4, 5, 12, and 14
do differ from what is currently in Labor Code 512 and
SBX8 70 appears to be referencing these Wage Orders with
this language. The Committee may wish to consider
specifically listing Wage Orders 4, 5, 12, and 14 in order
to clarify which industries are being exempted.
b) Outside of its context, this language could be
confusing, as it could be read to allow an employee to
waive their meal period if they work less than 12 hours.
Since many of California's workers work less than 12 hours,
this could be read to deprive them of their sole meal
period. The Committee may want to consider the insertion
of "more than 10 hours, but" after the word "works" on line
1, page 4, which would read as follows:
Except as authorized by an Industrial Welfare
Commission wage order in effect as of January 1,
2009, if an employee works more than 10 hours, but
no more than 12 hours in a workday, the employer and
employee may agree to waive the employer's duty of
providing the employee with either the first or the
second meal period, but not both.
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Senate Committee on Labor and Industrial Relations
5. Proponent Arguments :
Proponents argue that SBX8 70 would provide clarity and
guidance for compliance with meal period laws and regulations
by clarifying an employer's obligation to provide a meal
period and an employer's ability to enter into on-duty meal
period agreements. Proponents argue that this clarity is
needed due to the multiple interpretations of what it an
employer's obligation is to provide a meal period, as well as
the disruptive nature in the workplace of policies compelling
employees to take their meal periods in order to avoid
liability and litigation.
6. Opponent Arguments :
Opponents argue that SBX8 70 jeopardizes the fundamental right
of a meal period by an employee by shifting the responsibility
from the employer to the employee, who is at will and is
unlikely to feel free to take a meal period when facing the
threat of possible unemployment or employer coercion.
Opponents argue that this change will particularly hurt the
most vulnerable members of California's workforce, as they
will not feel empowered and able to request a meal period.
Opponents also argue that the on-duty meal period provisions
in SBX8 70 are too broad and could lead to understaffing and
pressure of workers to increase productivity. Finally,
opponents argue that current law sets a reasonable balance
between employers and employees, and that changing the
definition of providing a meal period will only create more
confusion, rather than clarity.
7. Legislation in the 2009-2010 Session :
SB 908 (Wyland) would exempt from meal period requirements an
employee in the transportation industry whose work places him
or her inside an armored car in shifts during a workday. SB
908 was recent referred to this Committee by Senate Rules, and
will be heard at a future date.
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SB 807 (Benoit) would grant employers greater flexibility to
provide meal periods, and also reduce the punishment for
failing to provide a meal period. SB 807 was returned to
Secretary of Senate pursuant to Joint Rule 56.
SB 665 (Cedillo) would allow an employer of a registered
security officer to provide on-duty meal periods if the
officer is covered by a valid collective bargaining agreement
containing specified terms or has a written on-duty meal
period agreement with his or her employer containing specified
terms. SB 665 was returned to Secretary of Senate pursuant to
Joint Rule 56.
SB 380 (Dutton) would grant employers greater flexibility to
provide meal periods, expand the number of qualifying
circumstances for creating on-duty meal period agreements,
exempt collective bargaining agreements from meal period law,
and state these amendments are declarative of existing law,
and would not be considered amendatory of existing law. SB
380 was returned to Secretary of Senate pursuant to Joint Rule
56.
AB 569 (Emmerson) would exempt employees in the construction
and transportation industry that are covered by a collective
bargaining agreement from meal period requirements. AB 569
was referred to this Committee last year, and will be heard at
a future date.
8. Prior Legislation :
SB 1539 (Calderon) of 2008 sought, among other things, to
allow the employer to satisfy the requirement to provide a
meal period if the meal period is available to an employee.
SB 1539 was heard in this Committee, amended to intent
language, and sent to the Senate Rules Committee.
SB 1192 (Margett) of 2008 sought to allow the employer to
satisfy the requirement to provide a meal period if the meal
period is available to an employee, as well as change the
punishment for an employer failing to provide a meal from a
premium wage to a penalty. The initial hearing for SB 1192
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was cancelled at the author's request.
SB 529 (Cedillo) of 2008 would have exempted utility workers,
construction workers, and security officers from certain meal
and rest period requirements. SB 529 was held in the inactive
file on the Assembly Floor.
AB 1711 (Levine) of 2007 would have allowed an employee to
complete his or her meal period before the conclusion of the
6th hour or work. The initial hearing for AB 1711 was
cancelled by the author.
AB 2509 (Steinberg) Statutes of 2000, Chapter 876, created the
wage premium penalty for an employer who fails to provide a
meal period.
AB 60 (Knox) Statutes of 1999, Chapter 134 codified the meal
period for all California employees.
SUPPORT
Adventist Health Central Valley Network
Alhambra Hospital Medical Center
Alvarado Parkway Institute Behavioral Health System
Association of Builders and Contractors of California
Banner Lassen Medical Center
California Bankers Association
California Chamber of Commerce
California Employment Law Council
California Hospital Association
California Independent Grocers Association
California Independent Petroleum Association
California Manufacturers & Technology Association
California Newspaper Publishers Association
California Restaurant Association
California Retailers Association
California Trucking Association
Children's Hospital Los Angeles
Coalinga Regional Medical Center
College Hospital Costa Mesa
Community Hospital of Long Beach
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Community Hospital of the Monterey Peninsula
Community Memorial Health System
Community Memorial Hospital of San Buenaventura, Ventura, CA
Corona Regional Medical Center (15 individual ltrs.)
Del Amo Hospital
Desert Regional Medical Center
Doctors Hospital of Manteca
Employers Group
Garden Grove Hospital & Medical Center
Gelndale Adventist Medical Center
Glenn Medical Center
Greater California Livery Association
Henry Mayo Newhall Memorial Hospital
Huntington Beach Hospital
John F. Kennedy Memorial Hospital
John Muir Health
Kindred Hospital San Francisco Bay Area
La Palma Intercommunity Hospital
Lakewood Regional Medical Center
Lodi Memorial Hospital
Los Alamitos Medical Center
Madera Community Hospital
Memorial Hospital of Gardena
MemorialCare Health System
Mission Community Hospital
Montclair Hospital Medical Center
National Federation of Independent Business
Oak Valley Hospital
Pacific Alliance Medical Center
Placentia-Linda Hospital
Presbyterian Intercommunity Hospital
Queen of the Valley Medical Center
Saint John's Health Center
San Antonio Community Hospital
San Ramon Regional Medical Center
Sharp HealthCare
Shasta Regional Medical Center
Sierra Pacific Industries
Sierra Vista Regional Medical Center, San Luis Obispo
Simi Valley Hospital
Sonora Regional Medical Center
Southern Mono Healthcare District dba Mammoth Hospital
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Southwest Healthcare System
St. Joseph Health System Sonoma County
Tenet and California Hospitals
Twin Cities Community Hospital
Ukiah Valley Medical Center
West Anaheim Medical Center
Western Growers
Western Manufactured Housing Communities
White Memorial Medical Center
OPPOSITION
California Federation of Teachers
California Labor Federation, AFL-CIO
California Nurses Association/National Nurses Organizing
Committee
California Rural Legal Assistance Foundation (CRLAF)
Consumer Attorneys of California
Service Employees International Union
* * *
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Senate Committee on Labor and Industrial Relations