Two New Potential “Job-Killers” – September 2016 Legislative Update

The California Legislature recently passed two pieces of legislation that, if signed into law, would once again increase the burden on California employers. The employment bills are now sitting on Governor Jerry Brown’s desk waiting for review – just two of nearly 800 bills Governor Brown must make a decision on by September 30, 2016.

Farmworker Overtime Compensation

AB 1066 seeks to modify the overtime rules applicable to California farmworkers, so as to bring them in line with other California employees.  Currently, farmworkers receive overtime compensation (time and a half) when they work more than 10 hours in a day, or more than 60 hours in a single workweek.  In contrast, most California employees receive overtime compensation when they work more than 8 hours in a day, or more than 40 hours in a single workweek.

If Governor Brown signs AB 1066 into law, the new overtime laws for farmworkers would be phased in over a period of four years.  Overtime compensation would be owed as follows: (1) in 2019, for time worked over 9.5 hours in a day, or 55 hours in a week; (2) in 2020, for time worked over 9 hours in a day, or 50 hours in a week; (3) in 2021, for time worked over 8.5 hours in a day, or 45 hours in a week; and (4) in 2022, for time worked over 8 hours in a day, or 40 hours in a week.  Double time compensation would be owed for time worked over 12 hours in a day beginning in 2022.  Agricultural businesses with fewer than 25 employees would have an additional three (3) years to comply with the new overtime rules. Other provisions of the Labor Code regarding compensation for overtime work would apply to farmworkers beginning January 1, 2017.

Although Governor Brown has historically supported agricultural workers’ rights and signed the Agricultural Labor Relations Act in 1975, he has more recently been critical of the United Farm Workers Union (a backer of this bill).  There is no clear indication on how he will decide AB 1066.

New Parent Leave Act

SB 654, entitled the New Parent Leave Act, would expand the California Family Rights Act (“CFRA”) to include smaller businesses (fewer than 50 employees) in limited circumstances.  The bill would allow the parents of newborn or adopted children up to six (6) weeks of unpaid, protected parental leave when they work for businesses with between 20 and 49 employees.  In calculating a business’s number of employees, all employees within a 75-mile radius would be aggregated.  Leave would be required to be taken within one (1) year of the new child’s birth or adoption. Employees would be entitled to use accrued vacation and sick time, and to receive up to 60% of their paycheck through California’s disability insurance program.

To be eligible for New Parent Leave, employees would be required to have worked for the business for at least a year, with at least 1250 hours worked in the preceding year.  Businesses would not be required to provide New Parent Leave to both parents, where both are employed by the same business.

The bill is aimed to provide job protection to employees who otherwise have chosen not to taken Paid Family Leave for fear of termination (as Paid Family Leave provides income replacement but not job protection).  Employers would have to maintain health insurance and guarantee reinstatement to the same or a comparable position.  If passed, SB 654 will be effective on January 1, 2018.

The bill’s predecessor, SB 1166, which would have applied to businesses with 10 or more employees and offered up to 12 weeks of leave, was rejected by the legislature.  SB 654 is much more limited in nature, but there is no telling whether Governor Brown will sign or veto the legislation.

Holden Law Group will stay tuned and issue an update once Governor Brown acts on both of these new pieces of legislation.