Nut again! Ag Overtime Bill is Reintroduced

Q:     I thought the ag overtime bill failed?  Why am I hearing about it again?

A:     On April 28, 2016, we posted a blog entitled “Lettuce Get Back to Work” discussing AB 2757 that would change the way agricultural workers are paid overtime.  Currently, agricultural employees are paid overtime after 10 hours instead of 8 hours (which is the standard for most other industries).  In addition, there is currently no daily double time after 12 hours for agricultural workers, which is also standard for other industries.  The argument has always been that the seasonal nature of agriculture makes excluding it from other standard industry rules reasonable.   Many individuals oppose the bill for economic reasons as well. Specifically, opponents argue that this new overtime requirement will drive agriculture out of the state and will lead to greater plantings of less labor-intensive crops, thus hurting the very people an increase in overtime was intended to help.  On the flip side, proponents argue that what is fair for other industries is also fair for agriculture – particularly in light of the difficult nature of farm work.  Nonetheless, on June 2, 2016 the arguments against changing the overtime requirements for agriculture workers failed, but by a very slim margin.

On August 22, 2016, AB 1066, a bill almost identical to AB 2757, passed in the senate, thus setting up another tight vote in the assembly.  AB 1066 allows for the overtime requirements to be phased in over a period of four years, starting on January 1, 2019, meaning that the bill will be in full effect on January 1, 2022.  Unlike its predecessor bill, AB 1066 further provides that employers who employ 25 or fewer employees have an additional three years to phase in the new overtime requirements – thereby not making them mandatory until 2025.

Agricultural employers should note, however, that if the bill is passed, they cannot simply opt out of these overtime requirements by using farm labor contractors.  This is due to section 2810.3 of California’s Labor Code, which imposes liability on a business for a labor contractor’s failure to comply with Labor Code provisions addressing wages and hours (e.g. overtime).

Lettuce Get Back to Work

Q:     I run a custom farming operation where we often need our employees to work over 8 hours in a day during our busy seasons. Most of our employee’s understand that the short window of harvest means a relatively short season of long hours. However, I heard that a bill was introduced in Sacramento with a strong likelihood of passing which would impose much stricter overtime requirements for farm workers.  Tell me it is not sow![1]

A:     You heard correctly. On April 6, the Assembly Labor & Employment Committee passed AB 2757 which seeks to “phase-in” overtime requirements for agricultural workers over the next four years, beginning in 2017. The impacts of this bill are feared to increase labor costs associated with farming and the agricultural industry. First, AB 2757 would require agricultural employers to pay overtime premium pay (at a rate of 1.5 times an employee’s regular rate of pay) to their employees after 8 hours in any work day, and 40 hours in any work week.[2]  Currently, the operative wage order for farm workers only requires daily overtime if the employees works more than 10 hours.  Second, it would require premium pay at the rate of two times the employee’s regular rate of pay for any work after 12 hours in a day. Currently, there is no double time for farm workers.  Furthermore, AB 2757 will repeal the agricultural exemption from the “one days’ rest in seven” requirement in the Labor Code, requiring agricultural employers to provide employees at least one day off each work week even during peak season.

Proponents characterized AB 2757 as “clean-up” legislation righting decades of unfair exclusion of farm workers from the right to 8-hour work days and 40-hour work weeks.[3] The Farm Bureau and a broad coalition of employer groups opposed the bill, arguing that the legislation will actually reduce farm workers’ income as affected employers will elect to have employees work 8 hours per day and avoid overtime premium pay, rather than the current practice of paying workers at their regular rate of pay for as many as 10 hours a day for as many as 6 days a week during busy harvest periods when enough work is available to work those hours.[4]

The farming interests argue the current law was meant to account for the variable nature and seasonality of farming.

AB 2757 passed the committee by a 5-2 party-line vote and was referred to the Assembly Appropriations Committee. Here, at Baker Manock & Jensen we will continue to track the bill as well as others that affect Valley businesses.

[1] http://www.dictionary.com/browse/sow

[2] http://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201520160AB2757

[3] http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_04510500/ab_486_cfa_20150411_153203_asm_comm.html

[4] http://www.farmbureauvc.com/new/assets/pdf-forms/friday-review/friday-review-4-8-2016.pdf

This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. The hypothetical question is posed to illustrate a point and does not contemplate all potential legal considerations This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.