New Overtime Requirements Need Attention

Brian German Agri-Business, Regulation

Several regulatory changes will be affecting the cost of labor this year, including new labor laws that pertain to minimum wage, workday and overtime requirements, as well as paid leave time.  Employers will need to pay special attention to employee scheduling and payment rates to ensure they are operating under the updates.

overtime requirementsParameters set forth by Assembly Bill 1066 a few years ago are beginning to take shape this year, lowering the threshold for overtime pay requirements.  “This year we’ve now been reduced to a 9.5-hour workday and anything after 9.5 hours in a day you have to pay overtime or 55 hours in a week, anything after 55 hours total in your workweek now requires the payment of overtime,” said AgSafe President and CEO Amy Wolfe. 

The new labor laws affecting overtime will have a significant impact on many farming operations, as the typical work schedule is comprised of a six-day workweek.  Working the maximum 9.5 hours a day, six days per week would mean that two hours of overtime will have to be paid on the sixth day.  This will be the first year in a multi-year process which will ultimately end with agricultural employees working an eight-hour day in a 40-hour workweek by 2022.

The reduction of hours before overtime begins has also appeared to create a discrepancy in the requirements for paid leave time.  With the ten-hour workday, employees have traditionally received 30 hours of paid leave, equating to three days of leave time.  However, three days of leave would now only be 28.5 hours, as the hours in a workday have been reduced.  Wolfe noted that Chief Council and President of the Ventura County Agricultural Association Rob Roy is working to get a conclusive answer but encourages erring on the side of caution in the meantime.

Overtime Matrix Courtesy of Rob Roy

“Folks need to continue providing 30 hours of leave.  It is what the state would view, is that it is the employees’ best interest,” said Wolfe.  “It is an issue that the bright legal minds of our industry are aware of and they are taking the appropriate steps to get thoughtful and definitive clarification from the regulators.”

Wolfe also highlighted the impact the new overtime requirements will have on irrigators, who have traditionally been exempt from certain aspects of hourly requirements.  “Irrigators are no longer exempt from the overtime laws, and for some of our commodities this is a big change,” Wolfe noted, “you’re looking at ‘what does a workday look like’ and if their time is spanning across two workdays, how does that play into 9.5 hours before you’re having to deal with overtime?”

Other new labor laws relate to pay rates, as this year marks another scheduled uptick in California’s minimum wage.  Employers with 26 or more employees are now required to pay at least $12 per hour and employers with 25 or fewer employees have to pay at least $11 per hour.

Listen to Taylor Hillman’s full interview with Wolfe.

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Brian German

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Ag News Director, AgNet West