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AB-2610 Employees: meal periods.(2017-2018)

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Date Published: 05/10/2018 09:00 PM
AB2610:v97#DOCUMENT

Amended  IN  Assembly  May 10, 2018
Amended  IN  Assembly  March 15, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2610


Introduced by Assembly Member Aguiar-Curry

February 15, 2018


An act to amend Sections 226.2 and Section 512 of the Labor Code, relating to employment.


LEGISLATIVE COUNSEL'S DIGEST


AB 2610, as amended, Aguiar-Curry. Piece-rate compensation: Employees: meal periods.

Existing law requires employers to provide itemized statements to employees at the time wages are paid that show, among other things, gross wages earned and total hours worked. Existing law requires the itemized statements for employees who are compensated on a piece-rate basis to state separately the total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period, among other things. Existing law requires those employees to be compensated for rest and recovery periods and other nonproductive time at, or above, specified minimum hourly rates, separately from any piece-rate compensation.

Existing law, until January 1, 2021, establishes an affirmative defense to a claim or cause of action for recovery of wages, damages, liquidated damages, statutory penalties, or civil penalties based solely on the employer’s failure to timely pay the employee the compensation due for rest and recovery periods and other nonproductive time for time periods prior to and including December 31, 2015, if the employer complied with prescribed requirements by no later than December 15, 2016, subject to certain exceptions.

This bill would make nonsubstantive changes to these provisions.

Existing law generally prohibits an employer from requiring an employee to work more than 5 hours per day without providing a meal period of not less than 30 minutes. Existing law excepts employees in specified occupations that meet certain conditions from this prohibition and authorizes the Industrial Welfare Commission to adopt a working condition order permitting a meal period to commence after 6 hours of work if the order is consistent with the health and welfare of affected employees.
This bill would authorize a commercial driver employed by a motor carrier transporting nutrients and byproducts from a licensed commercial feed manufacturer to a customer located in a remote rural location to commence a meal period after 6 hours of work, if the regular rate of pay of the driver is no less than one and one-half times the state minimum wage and the driver receives overtime compensation in accordance with specific provisions of existing law.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.Section 226.2 of the Labor Code, as added by Section 4 of Chapter 754 of the Statutes of 2015, is amended to read:
226.2.

This section shall apply for employees who are compensated on a piece-rate basis for any work performed during a pay period. This section shall not be construed to limit or alter minimum wage or overtime compensation requirements, or the obligation to compensate employees for all hours worked under any other statute or local ordinance. For the purposes of this section, “applicable minimum wage” means the highest of the federal, state, or local minimum wage that is applicable to the employment, and “other nonproductive time” means time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.

(a)For employees compensated on a piece-rate basis during a pay period, the following shall apply for that pay period:

(1)Employees shall be compensated for rest and recovery periods and other nonproductive time separately from piece-rate compensation.

(2)The itemized statement required by subdivision (a) of Section 226 shall, in addition to the other items specified in that subdivision, separately state the following, to which the provisions of Section 226 shall also be applicable:

(A)The total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period.

(B)Except for employers paying compensation for other nonproductive time in accordance with paragraph (7), the total hours of other nonproductive time, as determined under paragraph (5), the rate of compensation, and the gross wages paid for that time during the pay period.

(3)(A) Employees shall be compensated for rest and recovery periods at a regular hourly rate that is no less than the higher of:

(i)An average hourly rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods.

(ii)The applicable minimum wage.

(B)For employers who pay on a semimonthly basis, employees shall be compensated at least at the applicable minimum wage rate for the rest and recovery periods together with other wages for the payroll period during which the rest and recovery periods occurred. Any additional compensation required for those employees pursuant to clause (i) of subparagraph (A) is payable no later than the payday for the next regular payroll period.

(C)(i)Employers who meet the requirements in clause (ii) shall have until April 30, 2016, to program their payroll systems to perform and record the calculation required by clause (i) of subparagraph (A) and comply with the itemized statement requirements in paragraph (2), so long as the employer pays piece rate employees for all rest and recovery periods at or above the applicable minimum wage from January 1, 2016, to April 30, 2016, inclusive, and pays the difference between the amounts paid and the amounts that would be owed under clause (i) of subparagraph (A), together with interest calculated in accordance with subdivision (c) of Section 98.1, by no later than April 30, 2016.

(ii)For an employer to meet the requirements of this subparagraph, all of the following shall apply:

(I)The employer was acquired by another legal entity on or after July 1, 2015, and before October 1, 2015.

(II)The employer employed at least 4,700 employees in this state at the time of the acquisition.

(III)The employer employed at least 17,700 employees nationwide at the time of the acquisition.

(IV)The employer was a publicly traded company on a national securities exchange at the time of the acquisition.

(4)Employees shall be compensated for other nonproductive time at an hourly rate that is no less than the applicable minimum wage.

(5)The amount of other nonproductive time may be determined either through actual records or the employer’s reasonable estimates, whether for a group of employees or for a particular employee, of other nonproductive time worked during the pay period.

(6)An employer who is found to have made a good faith error in determining the total or estimated amount of other nonproductive time worked during the pay period shall remain liable for the payment of compensation for all hours worked in other nonproductive time, but shall not be liable for statutory civil penalties, including, but not limited to, penalties under Section 226.3, or liquidated damages based solely on that error, provided that both of the following are true:

(A)The employer has provided the wage statement information required by subparagraph (B) of paragraph (2) and paid the compensation due for the amount of other nonproductive time determined by the employer in accordance with the requirements of paragraphs (4) and (5).

(B)The total compensation paid for any day in the pay period is no less than what is due under the applicable minimum wage and any required overtime compensation.

(7)An employer who, in addition to paying any piece-rate compensation, pays an hourly rate of at least the applicable minimum wage for all hours worked, shall be deemed in compliance with paragraph (4).

(b)Notwithstanding any other statute or regulation, the employer and any other person shall have an affirmative defense to any claim or cause of action for recovery of wages, damages, liquidated damages, statutory penalties, or civil penalties, including liquidated damages pursuant to Section 1194.2, statutory penalties pursuant to Section 203, premium pay pursuant to Section 226.7, and actual damages or liquidated damages pursuant to subdivision (e) of Section 226, based solely on the employer’s failure to timely pay the employee the compensation due for rest and recovery periods and other nonproductive time for time periods prior to and including December 31, 2015, if, by no later than December 15, 2016, an employer complies with all of the following:

(1)The employer makes payments to each of its employees, except as specified in paragraph (2), for previously uncompensated or undercompensated rest and recovery periods and other nonproductive time from July 1, 2012, to December 31, 2015, inclusive, using one of the formulas specified in subparagraph (A) or (B):

(A)The employer determines and pays the actual sums due together with accrued interest calculated in accordance with subdivision (c) of Section 98.1.

(B)The employer pays each employee an amount equal to 4 percent of that employee’s gross earnings in pay periods in which any work was performed on a piece-rate basis from July 1, 2012, to December 31, 2015, inclusive, less amounts already paid to that employee, separate from piece-rate compensation, for rest and recovery periods and other nonproductive time during the same time, provided that the amount by which the payment to each employee may be reduced for amounts already paid for other nonproductive time shall not exceed 1 percent of the employee’s gross earnings during the same time.

(2)Payment shall not be required for any part of the time period specified in paragraph (1) for which either of the following apply:

(A)An employee has, prior to August 1, 2015, entered into a valid release of claims not otherwise banned by this code or any other applicable law for compensation for rest and recovery periods and other nonproductive time.

(B)A release of claims covered by this subdivision executed in connection with a settlement agreement filed with a court prior to October 1, 2015, and later approved by the court.

(3)By no later than July 1, 2016, the employer provides written notice to the department of the employer’s election to make payments to its current and former employees in accordance with the requirements of this subdivision and subdivision (c).

(A)The notice must include the legal name and address of the employer and must be mailed or delivered to the Director of Industrial Relations, Attn: Piece-Rate Section, 226.2 Election Notice, 1515 Clay Street, 17th Floor, Oakland, CA 94612. The director may provide for an email address to receive notices electronically in lieu of postal mail.

(B)The department shall post on its Internet Web site either a list of the employers who have provided the required notice or copies of the actual notices. The list or notices shall remain posted until March 31, 2017.

(4)The employer calculates and begins making payments to employees as soon as reasonably feasible after it provides the notice referred to in paragraph (3) and completes the payments by no later than December 15, 2016, to each employee to whom the wages are due, or to the Labor Commissioner pursuant to Section 96.7 for any employee whom the employer cannot locate.

(5)The employer provides each employee receiving a payment with an accompanying accurate statement that contains all of the following information:

(A)A statement that the payment has been made pursuant to this section.

(B)A statement as to whether the payment was determined based on the formula in subparagraph (A) of paragraph (1), or on the formula in subparagraph (B) of paragraph (1).

(C)If the payment is based on the formula in subparagraph (A) of paragraph (1), a statement, spreadsheet, listing, or similar document that states, for each pay period for which compensation was included in the payment, the total hours of rest and recovery periods and other nonproductive time of the employee, the rates of compensation for that time, and the gross wages paid for that time.

(D)If the payment is based on the formula in subparagraph (B) of paragraph (1), a statement, spreadsheet, listing, or similar document that shows, for each pay period during which the employee had earnings during the period from July 1, 2012, through December 31, 2015, inclusive, the gross wages of the employee and any amounts already paid to the employee, separate from piece-rate compensation, for rest and recovery periods and other nonproductive time.

(E)The calculations that were made to determine the total payment made.

(c)An employer who makes a reasonable and good faith effort to make the payments described in paragraph (1) of subdivision (b), and to provide the accurate statement described in paragraph (5) of subdivision (b), to all employees, but who solely through good faith error fails to make a payment to one or more employees as described in paragraph (1) of subdivision (b), or to provide an accurate statement as described in paragraph (5) of subdivision (b), shall not lose the affirmative defense set forth in subdivision (b) as a result of that good faith error if the employer, within 30 days of discovery or notice of the error, makes the payment described in paragraph (1) of subdivision (b) together with accrued interest calculated in accordance with subdivision (c) of Section 98.1 for any delay in payment after December 15, 2016, to the employees and accompanies the payment with an accurate statement as described in paragraph (5) of subdivision (b). The employer shall have the burden of proving that a failure to pay an employee was solely the result of good faith error.

(d)(1)The employer shall use due diligence, including, but not limited to, the use of people locator services, to locate and pay former employees who no longer work for the employer in the event that former employees have relocated. For payments made to the Labor Commissioner pursuant to paragraph (4) of subdivision (b), the employer shall pay the Labor Commissioner an additional administrative fee equal to one-half of 1 percent of the aggregate payments made, or two thousand five hundred dollars ($2,500), whichever is less, for deposit into the Labor Enforcement and Compliance Fund.

(2)Any payments made to the Labor Commissioner pursuant to paragraph (4) of subdivision (b) shall be accompanied by a statement, in both printed and electronic format, that identifies each employee for whom payment is made, the amount payable to that employee, and if available, the employee’s last known address and social security number.

(3)The employer shall preserve all records of hours worked, calculations of hours worked, and records of payments made to employees and the Labor Commissioner pursuant to subdivision (b) and this subdivision, until December 16, 2020, and furnish the records related to an employee on request by the employee.

(e)Beginning on January 1, 2016, and ending on July 1, 2016, if the employer has not provided the notice required by paragraph (3) of subdivision (b), or ending on December 15, 2016, if the employer has provided the notice required by paragraph (3) of subdivision (b), the statute of limitations shall be tolled for that period of time for any claims based on failure to fully compensate employees compensated on a piece-rate basis for rest and recovery periods and other nonproductive time prior to January 1, 2016.

(f)Any notice to the Labor and Workforce Development Agency on or before December 31, 2015, pursuant to paragraph (1) of subdivision (a) of Section 2699.3, alleging violations based upon failure to properly compensate employees for rest and recovery periods, is void as to those alleged violations. Beginning January 1, 2016, and subject to the tolling provisions of subdivision (e), an aggrieved employee or representative shall give written notice by certified mail to both the Labor and Workforce Development Agency and the employer of any violations based on failure to compensate employees fully for rest and recovery periods and other nonproductive time.

(g)The provisions in subdivisions (b), (c), (d), (e), and (f) shall not apply to any of the following:

(1)Damages and penalties previously awarded in an order or judgment that was final and not subject to further appeal as of January 1, 2016.

(2)Claims based on the failure to provide paid rest or recovery periods or pay for other nonproductive time for which all of the following are true:

(A)The claim was asserted in a court pleading filed prior to March 1, 2014, or was asserted in an amendment to a claim that relates back to a court pleading filed prior to March 1, 2014, and the amendment or permission for amendment was filed prior to July 1, 2015.

(B)The claim was asserted against a defendant named with specificity and joined as a defendant, other than as an unnamed (DOE) defendant pursuant to Section 474 of the Code of Civil Procedure, in the pleading referred to in subparagraph (A), or another pleading or amendment filed in the same action prior to January 1, 2015.

(3)Claims that employees were not advised of their right to take rest or recovery breaks, that rest and recovery breaks were not made available, or that employees were discouraged or otherwise prevented from taking such breaks.

(4)Claims for unpaid wages, damages, and penalties that accrue after January 1, 2016.

(5)Claims for paid rest or recovery periods or pay for other nonproductive time that were made in any case filed prior to April 1, 2015, when the case contained by that date an allegation that the employer has intentionally stolen, diminished, or otherwise deprived employees of wages through the use of fictitious worker names or names of workers that were not actually working.

(6)An employer that is a new motor vehicle dealer, as defined by Section 426 of the Vehicle Code.

(h)Amendment to assert the affirmative defense provided in subdivision (b) in actions filed on or after March 1, 2014, unless final and not subject to further appeal as of January 1, 2016, shall be permitted.

(i)Nothing in this section shall limit or bar any action or proceeding by the Labor Commissioner or any private party for any failure to provide a rest and recovery period in accordance with any provision of this code, any order of the Industrial Welfare Commission, or any regulation adopted by the Department of Industrial Relations or any of its divisions, other than actions or proceedings based solely on the employer’s failure to timely pay the compensation due for rest and recovery periods.

(j)Nothing in this section precludes a judge from awarding statutory, contractual, or common fund attorney’s fees or costs in connection with an action filed before October 1, 2015.

(k)This section shall remain in effect only until January 1, 2021, and as of that date is repealed.

SEC. 2.Section 226.2 of the Labor Code, as added by Section 5 of Chapter 754 of the Statutes of 2015, is amended to read:
226.2.

This section shall apply for employees who are compensated on a piece-rate basis for any work performed during a pay period. This section shall not be construed to limit or alter minimum wage or overtime compensation requirements, or the obligation to compensate employees for all hours worked under any other statute or local ordinance. For the purposes of this section, “applicable minimum wage” means the highest of the federal, state, or local minimum wage that is applicable to the employment, and “other nonproductive time” means time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.

(a)For employees compensated on a piece-rate basis during a pay period, the following shall apply for that pay period:

(1)Employees shall be compensated for rest and recovery periods and other nonproductive time separately from piece-rate compensation.

(2)The itemized statement required by subdivision (a) of Section 226 shall, in addition to the other items specified in that subdivision, separately state the following, to which the provisions of Section 226 shall also be applicable:

(A)The total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period.

(B)Except for employers paying compensation for other nonproductive time in accordance with paragraph (7), the total hours of other nonproductive time, as determined under paragraph (5), the rate of compensation, and the gross wages paid for that time during the pay period.

(3)(A) Employees shall be compensated for rest and recovery periods at a regular hourly rate that is no less than the higher of:

(i)An average hourly rate determined by dividing the total compensation for the workweek, exclusive of compensation for rest and recovery periods and any premium compensation for overtime, by the total hours worked during the workweek, exclusive of rest and recovery periods.

(ii)The applicable minimum wage.

(B)For employers who pay on a semimonthly basis, employees shall be compensated at least at the applicable minimum wage rate for the rest and recovery periods together with other wages for the payroll period during which the rest and recovery periods occurred. Any additional compensation required for those employees pursuant to clause (i) of subparagraph (A) is payable no later than the payday for the next regular payroll period.

(4)Employees shall be compensated for other nonproductive time at an hourly rate that is no less than the applicable minimum wage.

(5)The amount of other nonproductive time may be determined either through actual records or the employer’s reasonable estimates, whether for a group of employees or for a particular employee, of other nonproductive time worked during the pay period.

(6)An employer who is found to have made a good faith error in determining the total or estimated amount of other nonproductive time worked during the pay period shall remain liable for the payment of compensation for all hours worked in other nonproductive time, but shall not be liable for statutory civil penalties, including, but not limited to, penalties under Section 226.3, or liquidated damages based solely on that error, provided that both of the following are true:

(A)The employer has provided the wage statement information required by subparagraph (B) of paragraph (2) and paid the compensation due for the amount of other nonproductive time determined by the employer in accordance with the requirements of paragraphs (4) and (5).

(B)The total compensation paid for any day in the pay period is no less than what is due under the applicable minimum wage and any required overtime compensation.

(7) An employer who, in addition to paying any piece-rate compensation, pays an hourly rate of at least the applicable minimum wage for all hours worked, shall be deemed in compliance with paragraph (4).

(b)This section shall become operative on January 1, 2021.

SEC. 3. SECTION 1.

 Section 512 of the Labor Code is amended to read:

512.
 (a) An employer shall not employ an employee for a work period of more than five hours per day without providing the employee with a meal period of not less than 30 minutes, except that if the total work period per day of the employee is no more than six hours, the meal period may be waived by mutual consent of both the employer and employee. An employer shall not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of not less than 30 minutes, except that if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.
(b) (1) Notwithstanding subdivision (a), the Industrial Welfare Commission may adopt a working condition order permitting a meal period to commence after six hours of work if the commission determines that the order is consistent with the health and welfare of the affected employees.
(2) Notwithstanding paragraph (1), a commercial driver employed by a motor carrier transporting nutrients and byproducts from a commercial feed manufacturer subject to Section 15051 of the Food and Agricultural Code to a customer located in a remote rural location may commence a meal period after six hours of work, if the regular rate of pay of the driver is no less than one and one-half times the state minimum wage and the driver receives overtime compensation in accordance with Section 510.
(c) Subdivision (a) does not apply to an employee in the wholesale baking industry who is subject to an Industrial Welfare Commission wage order and who is covered by a valid collective bargaining agreement that provides for a 35-hour workweek consisting of five 7-hour days, payment of one and one-half times the regular rate of pay for time worked in excess of seven hours per day, and a rest period of not less than 10 minutes every two hours.
(d) If an employee in the motion picture industry or the broadcasting industry, as those industries are defined in Industrial Welfare Commission Wage Order Numbers 11 and 12, is covered by a valid collective bargaining agreement that provides for meal periods and includes a monetary remedy if the employee does not receive a meal period required by the agreement, then the terms, conditions, and remedies of the agreement pertaining to meal periods apply in lieu of the applicable provisions pertaining to meal periods of subdivision (a) of this section, Section 226.7, and Industrial Welfare Commission Wage Order Numbers 11 and 12.
(e) Subdivisions (a) and (b) do not apply to an employee specified in subdivision (f) if both of the following conditions are satisfied:
(1) The employee is covered by a valid collective bargaining agreement.
(2) The valid collective bargaining agreement expressly provides for the wages, hours of work, and working conditions of employees, and expressly provides for meal periods for those employees, final and binding arbitration of disputes concerning application of its meal period provisions, premium wage rates for all overtime hours worked, and a regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.
(f) Subdivision (e) applies to each of the following employees:
(1) An employee employed in a construction occupation.
(2) An employee employed as a commercial driver.
(3) An employee employed in the security services industry as a security officer who is registered pursuant to Chapter 11.5 (commencing with Section 7580) of Division 3 of the Business and Professions Code, and who is employed by a private patrol operator registered pursuant to that chapter.
(4) An employee employed by an electrical corporation, a gas corporation, or a local publicly owned electric utility.
(g) The following definitions apply for the purposes of this section:
(1) “Commercial driver” means an employee who operates a vehicle described in Section 260 or 462 of, or subdivision (b) of Section 15210 of, the Vehicle Code.
(2) “Construction occupation” means all job classifications associated with construction by Article 2 (commencing with Section 7025) of Chapter 9 of Division 3 of the Business and Professions Code, including work involving alteration, demolition, building, excavation, renovation, remodeling, maintenance, improvement, and repair, and any other similar or related occupation or trade.
(3) “Electrical corporation” has the same meaning as provided in Section 218 of the Public Utilities Code.
(4) “Gas corporation” has the same meaning as provided in Section 222 of the Public Utilities Code.
(5) “Local publicly owned electric utility” has the same meaning as provided in Section 224.3 of the Public Utilities Code.