in the KNOW

September 16, 2016

State Capitol - Photo Credit : Reuters

State Capitol – Photo Credit : Reuters

Gov. Brown Signs New Ag Overtime Requirements into Law

Ag Council is exceedingly disappointed Governor Jerry Brown signed into law AB 1066, the “Phase-In Overtime for Agricultural Workers Act of 2016,” on September 12. The governor did not release a statement when he signed the bill. Although AB 1066 is now law, we appreciate the active engagement of our members in the opposition and veto effort.

Understanding the Details of AB 1066

Going forward, the new law repeals current provisions regarding overtime for agricultural employees and establishes a schedule to phase-in revised overtime requirements over the course of four years starting in 2019 and culminating in the requirement to pay overtime after eight hours in a day or over 40 hours in a week by 2022.  Employers with 25 or fewer employees have an additional three years to comply with the overtime requirements. The phase-in for those employers begins in 2022 and compliance is mandated by 2025.

Currently, agricultural employees in California are paid overtime after 10 hours in a day and 60 hours in a week, and our state is only one of a handful in the nation to pay agricultural employees any overtime. The new law repeals those provisions and implements the following phase-in timeline requiring that overtime (one and one-half times the employee’s regular rate of pay) be paid after:

  • Nine and a half hours in a work day or in excess of 55 hours in a work week beginning January 1, 2019

– Begins in 2022 for small businesses (25 or fewer employees)

  • Nine hours in a work day or in excess of 50 hours in a work week beginning January 1, 2020

– Begins in 2023 for small businesses

  • Eight and a half hours in a work day or in excess of 45 hours in a work week beginning January 1, 2021

– Begins in 2024 for small businesses

  • Eight hours in a work day or in excess of 40 hours in a work week beginning January 1, 2022

– Begins in 2025 for small businesses

Starting January 1, 2022, AB 1066 mandates that any work performed by an agricultural employee after 12 hours in one day be compensated at the rate of no less than twice the employee’s regular rate of pay. Double the rate of pay after 12 hours is not presently required in agriculture.

Among other provisions, the recently signed bill authorizes the governor to delay implementation of the overtime pay provisions if the governor also suspends a scheduled increase to the state minimum wage. Further, the California Department of Industrial Relations is required to update Wage Order 14, which applies to wages, hours and working conditions in agricultural occupations, for consistency with AB 1066.

The signing of AB 1066 is discouraging and does not take into account the fact that California’s farmers and producers already comply with the strictest labor, water, air, and other regulatory compliance rules in the nation. And now, the agricultural community is the only sector to face both a new overtime rule for employees and the economic pressure and uncertainty of the minimum wage hike to $15.

Ag Council will continue to provide information to help our members understand the new law, and we encourage you to contact us with any questions at ph. (916) 443-4887.

Many Bills Still Await Action by Gov. Brown

Governor Jerry Brown has until September 30 to make decisions on hundreds of bills pending on his desk. Among the measures still awaiting consideration by the governor are the following bills:

Labor–Parental Leave

SB 654 (Jackson) mandates new maternity and paternity leave in California leading to higher costs and burdens on employers with as few as 20 employees. SB 654 requires employers to provide six weeks of protected employee leave to bond with a new child within one year of birth, adoption or foster placement.

The six weeks of leave is in addition to existing protected leave in California allowing employees up to four months of leave due to pregnancy. As a result, the measure would lead to over five months of protected leave for some employees and could be a hardship for small businesses with a limited workforce and resources. Further, SB 654 imposes another protected leave mandate on employers, which subjects businesses to the threat of costly litigation.

POSITION: Ag Council opposed the bill in the Legislature and requested a veto from the governor, along with a coalition of ag and business groups. A decision by the governor is pending.

Labor–Worker Safety

SB 1167 (Mendoza) directs Cal/OSHA to adopt an unwarranted blanket standard regarding indoor workers with the intent to protect them from heat-related illness and injury. The bill hamstrings the authority of Cal/OSHA to develop the appropriate scope and application of a regulation by forcing a one-size-fits-all standard onto California businesses.

SB 1167 is unnecessary because Cal/OSHA already has the ability to implement heat illness regulations through existing authority, which includes a more collaborative stakeholder process.

POSITION: Ag Council opposed this measure in the Legislature and has requested a veto of the bill. The governor has not yet made a decision on the bill.

With the September 30 deadline to sign or veto legislation quickly approaching, Ag Council will continue to apprise our members of actions taken by Governor Brown on these and other bills of interest to members.

i19538lb0Gov. Brown Signs Cap & Trade Expenditure Plan

On September 14 in Fresno, Governor Jerry Brown signed a $900 million cap and trade expenditure bill for 2016-2017 as part of a package of measures to reduce greenhouse gas emissions (GHG) with an emphasis on programs that benefit disadvantaged communities and clean transportation efforts. The bill, AB 1613, is the result of an agreement between the governor and Democrat legislative leaders on how to spend the majority of unallocated cap and trade dollars.

Governor Brown said during the signing ceremony in Fresno, “These cap and trade investments will help spur innovation of all kinds to curb carbon pollution. With these bills, we also will help communities hard hit by pollution and climate change.”

Funding for agriculture

Within the legislation, $65 million is allocated to the California Department of Food and Agriculture (CDFA) to be spent in the following manner:

  • $50 million for methane emissions reductions from dairy and livestock operations
  • $7.5 million for the Healthy Soils Program
  • $7.5 for the State Water Efficiency and Enhancement Program (SWEEP)

As background, several Ag Council members participate in the cap and trade regulatory program developed by the California Air Resources Board (ARB) to meet GHG reduction requirements.

By law, 60 percent of the annual cap and trade auction proceeds are distributed to areas such as affordable housing, public transit, sustainable communities and high-speed rail. About $462 million in reserve funds remain in the cap and trade fund for future appropriation.

To read more, click HERE.

Biomass Power to Benefit from New Law

An agreement to require utilities to procure biomass power, mainly from forest material, was signed into law on September 14 by Governor Jerry Brown. The biomass provisions contained within a cap and trade expenditure measure, SB 859, help provide certainty to some biomass facilities dealing with outdated contracts with utilities and facing closure. Under the new law, utilities must enter into five-year contracts for a modest 125 MWs of cumulative bioenergy capacity derived mostly from forest material.

The key purpose of the biomass provisions in SB 859 is to remove dead and dying trees from high hazard fire areas. However, there is some potential for agriculture to benefit from SB 859 in the long run as the measure allows certain biomass facilities to continue to operate. Biomass facilities serve an important function giving farmers the option to dispose of tree prunings or trees uprooted from planned orchard removals. Biomass also reduces open field burning, thereby benefitting air quality, and decreases wood waste going toward landfills.

Ag Council thanks Assemblyman Brian Dahle (R-Bieber) and others in the Legislature for championing this issue to give some certainty to biomass operations in California.

Click HERE to read more.

Expansion of Climate Change Policies Signed into Law

In case you missed it last week, Governor Jerry Brown took action to sign major climate change measures into law, SB 32 (Pavley) and AB 197 (Garcia) on September 8. The bills expand upon existing landmark climate change policies in California.

Currently, state law requires the California Air Resources Board (ARB) to lower greenhouse gas (GHG) emissions in the state to 1990 levels by the year 2020. The newly signed law, SB 32, requires ARB to reduce statewide emissions of GHGs to 40 percent below 1990 levels by 2030. SB 32 does not extend the existing cap and trade program, which is presently authorized through 2020. Removing the cap and trade extension from SB 32 is what allowed the measure to pass the Legislature by a simple majority, as opposed to a two-thirds vote. Ag Council opposed SB 32 because it gives unfettered regulatory authority to ARB to meet the new mandate.

AB 197 is intended to provide increased legislative oversight of ARB. The bill adds two non-voting lawmakers to the board at ARB, creates six-year term limits for ARB members and establishes a new legislative oversight committee. AB 197 directs ARB to consider the social costs of GHGs and requires a focus on climate change programs in disadvantaged communities. Ag Council opposed AB 197 because it undermines the cost effectiveness requirement under the current system and does not contain meaningful oversight of ARB going forward.

For more about the bills, and to read Governor Brown’s press statement, click HERE.