AB 1066 PASSES ASSEMBLY, UPDATE! SIGNED BY GOVERNOR BROWN

(updated comments) The governor signed AB 1066 into law and already we are seeing some of the consequences of that action.  One point being discussed is the exemption on page 3 of the document that exempts employers with collective bargaining agreements.  This is actually true for all wage orders and many labor regulations.  However, it drives speculation that the UFW was behind this action to increase their shrinking ranks.  We shall see.

You can go on-line and read the entire Bill and all of the amendments  https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201520160AB1066  , but here is a short description:

First, presently Dairies, Ranch and farm labor are under wage order 14 in California.  If allows employees to work a 10 hour day or 60 hour workweek without overtime payment.  Now, beginning in 2019, employers with over 25 employees, will begin to work under new hourly rules.  Smaller employers with 25 or less employees, will start January 1, 2022.  It is a gradual reduction, but the numbers do not add up to a 6 day week anymore.  For instance, the first reduction is at 9 1/2 hours a day or 55 hours in a week.  Well, 6 days at 9 1/2 hours would be 57 hours for the week, so you would be into 2 hours of overtime or cut one of the days shorter.  This bad math continues on the rest of the reduction schedule until you are at 8 hours per day or 40 hours in a week which means employees will only work 5 days.

Here is what this will look like over the next few years:

 

AB1066

Change in Wage Order 14 to 8-hour work day

ALL DATES BEGIN ON JANUARY 1…….

EMPLOYERS w\ 25 OR LESS EMPLOYEES                                                                 EMPLOYERS w\ 26 OR MORE EMPLOYEES

2022 change to 9 ½ hours per day or 55 hours per week                             2019 change to 9 ½ hours per day or 55 hours per week

2023 change to 9 hours per day or 50 hours per week                                2020 change to 9 hours per day or 50 hours per week

2024 change to 8 1/2 hours per day or 45 hours per week                          2021 change to 8 1/2 hours per day or 45 hours per week

2025 change to 8 hours per day or 40 hours per week                                 2022 change to 8 hours per day or 40 hours per week

Further, beginning in 2022, there will be double time pay for all hours over 12 hours in a day.

Finally, I feel I must point out the math in this legislation.  It is tied to the minimum wage increases that are also being increased year after year until 2023 when all employers will be at $15 per hour and continue to increase thereafter.  Here is a little math for you:

If an employee makes $10 per hour now, and working 60 hours, they earn $600 per week.   When the new regulations are in place, an employee will make $15 per hour and work 40 hours and earn $600 per week.  So the employee is going to be no better off after a 50% increase in pay and the employer will be paying the same amount of money for  33% less productive work each week.  (this does not include increases in other employer required taxes and payments).  One other thing to note, you will no longer have to provide 30 hours of sick pay.  Under the new 8 hour day, you will only be required to provide 24 hours of sick pay benefits so the employee actually loses 6 hours of Paid Sick leave.

So, how does this law benefit the employee?  Well the employee will have more time to take a second job to increase their income.  However, the idea of this law was so employees had more “family” time.  Instead, they may be working more hours with a second job, likely not getting a day off at all and more tired and prone to being injured at work.  Not sure how any of this benefits the employee, but remember, all they told the farm workers was that they would be getting more overtime and didn’t mention their hours could be cut.

TWO NOTES OF WARNING!!

First, if you are not already, you really need to move toward paying an hourly rate.  You need to establish a time clock or other time keeping system, and log all hours worked.  Paying by the day, “salary” or other methods are going to get you in more trouble and could cost thousands of dollars.  You need to rely on HR Mobile Services, Inc. or your attorney to keep you out of trouble and follow their directions.

Second, be very careful of employees working at 2 locations that you are a partner or owner in.  For instance, if an employee works 5 days for you, they may want to work at another job.  They can work at another business that you are connected to under certain conditions

  • The other business must be completely separate with a it’s own FEIN number
  • It must be a separate payroll and a separate paycheck just like you get at any second job
  • You cannot be the person directing or encouraging the employee to work at the other job
  • Any disciplinary actions from one job cannot carry over to the other job

Understand that these 2 locations must be just like the employee is working at a dairy and a restaurant.  The can be in the same industry, but they have to be completely separated legally or you will be exposed as trying to circumvent the law and this could bring PAGA and other penalties in a Labor Commission hearing.

Please understand that there is plenty of time for changes, additions or other adjustments to this new law before it begins, so  pay attention to this space and to our mailings in the future.  WE WILL FIGURE THIS OUT TOGETHER!

 

 

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