Hot on the heals of establishing a mandatory 3 days of sick pay for all employees in the state, California is now considering Double Pay for certain holidays. Please read the analysis below from the California Chamber of Commerce Alert Bulletin regarding this legislation (more commentary at the end):
Assembly Committee Passes Double Holiday Pay Bill
March 20, 2015 Jennifer Barrera
The Assembly Labor and Employment Committee this week approved a California Chamber of Commerce-opposed bill requiring double pay for work on certain days.
During testimony to the committee on AB 67 (Gonzalez; D-San Diego) CalChamber Policy Advocate Jennifer Barrera explained that the bill increases costs, creates a competitive disadvantage, and potentially violates employers’ constitutional rights by forcing employers to recognize certain days as “family holidays” and compensate all employees with double pay for work performed on those days.
Violates Religious Freedom
AB 67 provides that employers shall compensate an employee at no less than twice the employee’s regular rate of pay on a “family holiday,” defined as “December 25 of each year” and “the fourth Thursday of November of each year,” commonly referred to as Christmas and Thanksgiving.
While the recognition of these holidays may seem benign to some persons, employers who have non-Christian-based beliefs or are immigrants to America might not see the recognition the same way. The Legislature should not mandate certain days as more significant based upon religious or cultural beliefs that are not maintained by all.
Further questions about the First Amendment implications of AB 67 were raised during the hearing and directed at Barrera, but she was stopped from answering them by the committee chair, who cited procedural precedent issues.
Unavoidable Increase in Costs
Although some employers may close their place of business on a “family holiday” to accommodate their employees, others do not realistically have that option for their business models.
AB 67 would also unilaterally increase the cost of doing business only for those employers who have a physical presence in California, thereby automatically placing them at a competitive disadvantage with online companies and out-of-state businesses that would not be subject to this cost.
Recently, the Legislature tried to even the playing field between online retailers and brick-and-mortar stores in the sales-tax arena. AB 67 would further distort this playing field by increasing the cost of doing business for local employers, as opposed to online retailers, who would not have to comply.
Regular Rate of Pay/PAGA Enforcement
Determining the regular rate of pay of many employees requires a detailed calculation that goes beyond just an employee’s hourly pay. As defined by the Division of Labor Standards Enforcement, the “regular rate of pay includes a number of different kinds of remuneration, for example hourly earnings, salary, piecework earnings, commissions, certain bonuses, and the value of meals and lodging.” While this calculation is performed for overtime purposes, it is subject to good faith errors as to what types of “remuneration” should be included in the calculation.
Due to being included in Section 511.5 of the Labor Code, the provisions of AB 67 are subject to the Private Attorneys General Act (PAGA) (Labor Code Section 2699 et seq.). Therefore, errors in calculating the regular rate of pay or failures to comply with other provisions of this mandate would add another threat of litigation against California employers.
AB 67 passed the Assembly Labor and Employment Committee 5-2.
Ayes: Chu (D-San Jose), Hernández (D-West Covina), Low (D-Campbell), McCarty (D-Sacramento), Thurmond (D-Richmond.
Noes: Harper (R-Huntington Beach), Patterson (R-Fresno).
The bill now heads to the Assembly Appropriations Committee; no hearing date has been set.
This bill puts a direct strain on any employer who works with living beings, animal or human. Zoos, dairies, pet stores, aviaries, animal conservatories, laboratories and research facilities, all would fall under this. Not mentioned are the thousands of employees who work with the elderly and infirmed. Now, many places fully staff on the holidays so that people who may not have family or a place to celebrate a holiday, have a great day. Now they will cut back to a bare minimum of workers and hours and this will also reduce the enjoyment of holidays for those people.
This is a well intentioned bill but not a well thought out bill. Notice that Sick Pay, Paid leave, and now Holiday pay do not affect the State employees because they can just close on those days or they already have a better package of specialties, or, what the heck, it is just tax payer money so there are no real consequences to State agencies. Hmmmm……..
One positive, there is almost no reason to join a union any more. They are already in the California Legislature.
We ask that you contact your representatives and express your opinion about this legislation.