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California Governor Signs Ag Overtime Bill

By Steve Adler
California Farm Bureau Federation

Now that Gov. Jerry Brown has signed the agricultural overtime bill, Assembly Bill 1066, employment specialists are working to interpret its provisions and help farmers and ranchers prepare for them.

The new law will entitle agricultural employees to premium pay after eight hours of work in a day or 40 hours in a week, making California the first state in the nation to do so. Implementation will be phased in starting in 2019. Other changes not involving overtime pay will go into effect Jan. 1.

Changes contained in the bill include:
The current 10-hour workday for agriculture, which has been in place since 1976, will be phased down for employers with more than 25 employees in four half-hour steps annually. The phase-down starts Jan. 1, 2019, when farmers or ranchers will have to pay employees 1½ times their regular rate of pay after 9½ hours worked in a workday. In 2020, premium pay begins after nine hours and in 2021, after 8½ hours. The last step will lower the daily overtime threshold to eight hours, effective Jan. 1, 2022.

Progressively lower caps on weekly straight-time hours also will be imposed on larger employers, effective on the first day of each of the same years. Currently, the threshold is 60 hours in a week. The imposition of those caps will start on Jan. 1, 2019, with a requirement to pay time-and-a-half after 55 hours worked in a workweek. In 2020, the cap reduces to 50 hours and in 2021 to 45 hours. On Jan. 1, 2022, the law imposes a 40-hour weekly cap plus a requirement to pay double time for hours worked over 12 in a workday.

Each of those phase-in steps will be delayed for three years for employers of 25 or fewer employees. For those employers, imposition of the phase-in steps will start on Jan. 1, 2022, and end on Jan. 1, 2025, along with a requirement to pay double time for hours worked over 12 in a workday.
AB 1066 will also subject agriculture, effective Jan. 1, 2017, to the “one day’s rest in seven” provisions of the Labor Code, although days of rest can be accumulated throughout the month due to business necessity.

Two Predictions
Bryan Little, California Farm Bureau Federation director of employment policy, says AB 1066 represents another development that triggers higher labor costs and will likely accelerate a trend toward agricultural mechanization. California’s minimum wage is now $11 per hour and will increase to $12 per hour on Jan. 1, 2017. It will top out at $15 per hour on Jan. 1, 2022. Little predicts two things for the near future: First, new machines will be developed to perform tasks that currently require hand labor; second, farmers will elect to grow crops that require less labor.
“We will also see more consolidation. Larger growers are better able to manage the cost of compliance than smaller growers, because they can spread the cost over more things. So it is going to cause some real changes in the next five or 10 years in order to cope with this,” he says.

Steve Adler is associate editor of Ag Alert. He may be contacted at sadler@cfbf.com. The California Farm Bureau Federation contributed this article.