On September 12, 2016, California Governor Jerry Brown signed AB 1066.  The bill, which is the first of its kind in the nation, will entitle California farmworkers to the same overtime pay as most other hourly workers in California.

California law defines employees “employed in an agricultural occupation” broadly to include any employment relating to the cultivation or harvesting of agricultural commodities; the raising, feeding, and management of livestock; or the maintenance and improvement of a farm and/or farm equipment.  Prior to the signing of AB 1066, such employees were entitled to time-and-a-half pay after working 10 hours in a day or 60 hours in a week.  This is substantially different from the overtime laws for other California employees, where overtime pay typically kicks in after eight hours in a day or 40 hours in a week.

The practice of exempting certain agricultural employees from overtime laws originated with the federal Fair Labor Standards Act (FLSA), which sets federal requirements related to minimum wage, overtime pay, and child labor.  The FLSA was enacted in 1938 and originally exempted certain agricultural employees from both federal minimum wage and overtime pay.  Today, these employees remain exempt from the FLSA’s overtime pay requirements.

AB 1066 gradually lowers the number of hours that farmworkers must work prior to entitlement to time-and-a-half pay.  Commencing January 1, 2019, most people employed in an agricultural occupation are entitled to overtime pay after working more than nine and one-half hours in any given workday or more than 55 hours in a workweek.  On January 1, 2020, those numbers decrease to nine hours in a workday and 50 hours in a workweek.  Starting January 1, 2021, overtime must be paid after eight and one-half hours in a workday and 45 hours in a workweek.  And as of January 1, 2022, the law requires time-and-a-half pay after eight hours in a workday and 40 hours in a workweek, which is the same as most other California occupations.  The law also provides that beginning January 1, 2022, farmworkers are entitled to twice their regular rate of pay for any work in excess of 12 hours in one day.  For smaller employers, those who employ 25 or fewer employees, the initial phasing-in process begins on January 1, 2022; employees who work for these smaller employers are not entitled to AB 1066’s double-time pay requirement until January 1, 2025.

The law also grants the Governor the power to temporarily suspend the scheduled phase-in of these new overtime requirements.  This authority, however, ends on January 1, 2025.

Agricultural employers and trade associations in Washington, Oregon, and Idaho closely tracked the process of AB 1066 in California.  Many are concerned about the economic impacts to the already thin margins in their own agricultural industries if their legislatures were to follow California’s lead.  Jenny Dresler, Director of State Public Policy for the Oregon Farm Bureau, provided her organization’s perspective on AB 1066:

“Oregon Farm Bureau is concerned about the harmful impacts of AB 1066 to California’s agricultural community and the possibilities of similar legislation and consequences in Oregon.  Many Oregon farm and ranch families cannot increase the price of their products.  Mandating overtime for Oregon agriculture would bring drastic cost increases that many family farmers would be unable to absorb.  We also are concerned that a California-style overtime law will force farmers to reduce hours for farm employees.  This would be another state mandated increase in labor costs—one that that the ag community simply cannot afford.”

While the phase-in of AB 1066 will not begin until 2019, employers with agricultural operations in California should promptly begin revising their employment processes to ensure compliance.  As for non-California employers, they should track their own legislatures to determine if similar laws are being drafted in their states.

 

[Thanks to Kirk Maag for guest-blogging. Kirk advises clients in natural resource industries, including water suppliers, forest products companies, agribusinesses, and manufacturers.]