California Expands Overtime, Wage & Hour Requirements for Agricultural Workers

After a phase-in period over several years, those employees eventually must be paid overtime after eight hours in a workday or 40 hours in a workweek. In addition, the bill extends the same meal period and day of rest rules to agricultural workers, as generally apply to other employees. The latter changes will be effective on January 1, 2017. The new overtime obligations phase in starting in 2019.

Under the Fair Labor Standards Act, federal law exempts agricultural workers from overtime. California’s Labor Code exempted agricultural workers from the portion of the Labor Code requiring overtime, meal periods, and days of rest, among other requirements. Since 1976, Industrial Welfare Commission Wage Order No. 14 (Agricultural Occupations) required payment of overtime at one and a half times an employee’s regular rate when an agricultural worker worked more than 10 hours in a workday. It also required overtime premiums on the seventh consecutive day of work in a workweek. The wage order generally covers occupations involving work in the field (e.g., harvesting, planting, tending crops or animals, and maintenance). Different wage orders, with California’s standard overtime rules, cover handling or processing crops away from the field.

AB 1066’s official title is the Phase-In Overtime for Agricultural Workers Act of 2016. Beginning in 2019, and depending on an employer’s size, the law gradually closes the difference between current overtime rules and the standard of overtime after eight hours in a workday or 40 hours in a workweek. For employers with 26 or more employees, the phase-in schedule is:

• January 1, 2019: overtime pay for work in excess of nine and one-half hours per day or 55 hours per workweek;
• January 1, 2020: overtime pay for work in excess of nine per day or 50 hours per workweek;
• January 1, 2021: overtime pay for work in excess of eight and one-half hours per day or 45 hours per workweek; and
• January 1, 2022: overtime pay for work in excess of eight hours per day or 40 hours per workweek.

For employers with 25 or fewer employees, the same changes phase in later over four years, between 2022 and 2025. The bill, however, does not specify how the number of employees should be calculated. Accordingly, that aspect may lead to confusion, especially with seasonal fluctuations in agricultural employment.

In addition to the eventual requirement of paying overtime at one and a half times an employee’s regular rate, after eight hours in a workday or 40 hours in a workweek, agricultural employers will have to pay double time after 12 hours in a workday. On the seventh consecutive day of work in a workweek, employers still will have to pay overtime at one and a half times an employee’s regular rate for the first eight hours of work, followed by double time after eight hours.

The new law grants the Governor authority to suspend the scheduled increases, if the Governor suspends California’s impending minimum wage increases. That law allows two suspensions based on economic circumstances.

As noted, AB 1066 eliminated the exemption of agricultural workers for certain wage and hour requirements in the Labor Code. Under this change, Labor Code section 512’s meal period requirements now will apply. They are different from the meal period requirements in Wage Order No. 14. The Labor Code requires that an employer “provide” a meal period within the first five hours of work; the wage order requires an employer to “authorize and permit” a meal period after five hours of work. The wage order also has no provision for a second meal period, while the Labor Code requires providing one within 10 hours, unless mutually waived. Agricultural employees also now will be subject to the requirement that they receive one day’s rest in seven, or the equivalent of that many days off in a month. 

AB 1066 represents an extremely significant change for California’s large agricultural industry and its employees. Employers will need to carefully consider these change and possible strategies. Not surprisingly, the California Department of Industrial Relations estimated a 10 to 20 percent increase in wage claims as a result, with confusion likely for employers and employees.