The California Assembly yesterday passed a California Chamber of Commerce-opposed bill that requires double the “regular rate” of pay for work on Thanksgiving.
AB 67 (Gonzalez; D-San Diego) passed the Assembly 43-32. The bill unfairly targets two classifications of employers, increases their costs, and creates a competitive disadvantage by forcing employers to recognize Thanksgiving as a “family holiday” and compensate all employees with double the regular rate of pay for work performed on that day.
A previous version of the bill failed to pass the Assembly last year.
Yesterday’s Assembly Floor session discussion on AB 67 can be watched below:
CalChamber remains opposed to the amended version of AB 67 because the bill:
Discriminates Against Two Classifications of Employers
AB 67 now targets only two industries—retail store and grocery store establishments—to force them to pay double the “regular rate” of pay on a “family holiday,” defined as Thanksgiving. Any other employer that opens on Thanksgiving can continue to pay its employees minimum wage.
Creates Competitive Disadvantage for California Employers
AB 67 unilaterally increases the cost of doing business only for employers that have a “physical store” in California, thereby automatically placing them at a competitive disadvantage with online retailers and out-of-state businesses that would not be subject to this costly mandate.
Out-of-state employers that sell their merchandise online still could do so under AB 67 without the increased cost, yet a California-based employer could not.
Employees in These Industries Generally Receive Higher Compensation for Working on Thanksgiving
Many “retail store establishment” employers surveyed confirm they voluntarily pay their employees time-and-a-half for work performed on Thanksgiving.
Despite this general industry standard of higher compensation, AB 67 seeks to increase these employers’ costs even further by mandating double the “regular rate” of pay. If these targeted employers change their behavior and open at 12:01 a.m. on the Friday following Thanksgiving, employees will lose out on the extra compensation they currently are receiving for work performed on this day.
Regular Rate of Pay and PAGA Enforcement
AB 67 does not require double payment of the employee’s hourly rate, but rather double the employee’s “regular rate” of pay. The difference is significant.
Because AB 67 provisions are included in Section 511.5 of the Labor Code, they are subject to the Private Attorneys General Act (PAGA; Labor Code Section 2698 et seq.). Good faith errors in calculating the regular rate of pay or failing to comply with other AB 67 provisions would subject California employers to another threat of litigation.
Determining the regular rate of pay of many employees requires a detailed calculation that goes beyond an employee’s hourly pay. As defined by the Division of Labor Standards Enforcement (DLSE), the “regular rate of pay includes a number of different kinds of remuneration, for example hourly earnings, salary, piecework earnings, commissions, certain bonuses, and the value of meals and lodging, ” according to the DLSE enforcement policies manual.
AB 67 passed the Assembly 43-32 on January 27.
Ayes: Ayes: Alejo Luis (D-Salinas), Atkins (D-San Diego), Bloom (D-Santa Monica), Bonilla (D-Concord), Bonta (D-Oakland), Brown (D-San Bernardino), Burke (D-Inglewood), Calderon (D-Whittier), Campos (D-San Jose), Chau (D-Monterey Park), Chiu (D-San Francisco), Chu (D-San Jose), Eggman (D-Stockton), Garcia (D-Bell Gardens), Garcia (D-Coachella), Gatto (D-Glendale), Gipson (D-Carson), Gomez (D-Los Angeles), Gonzalez (D-San Diego), Gordon (D-Menlo Park), Gray (D-Merced), Hernández (D-West Covina), Holden (D-Pasadena), Jones-Sawyer (D-South Los Angeles), Levine (D-San Rafael), Lopez (D-San Fernando), Low (D-Campbell), McCarty (D-Sacramento), Medina (D-Riverside), Mullin (D-South San Francisco), Nazarian (D-Sherman Oaks), O’Donnell (D-Long Beach), Perea (D-Fresno), Quirk (D-Hayward), Rendon (D-Lakewood), Ridley-Thomas (D-Los Angeles), Rodriguez (D-Pomona), Santiago (D-Los Angeles), Stone (D-Scotts Valley), Thurmond (D-Richmond), Ting (D-San Francisco), Weber (D-San Diego), Williams (D-Carpinteria), Wood (D-Healdsburg).
Noes: Achadjian (R-San Luis Obispo), Allen (R-Huntington Beach), Baker (R-San Ramon), Bigelow (R-O’Neals), Brough (R-Dana Point), Chang (R-Diamond Bar), Chávez (R-Oceanside), Cooley (D-Rancho Cordova), Dababneh (D-Encino), Dahle (R-Bieber), Dodd (D-Napa), Frazier (D-Oakley), Gaines (R-El Dorado Hills), Gallagher (R-Yuba City), Grove R-Bakersfield), Hadley (R-Torrance), Harper (R-Huntington Beach), Irwin (D-Thousand Oaks), Jones (R-Santee), Kim (R-Fullerton), Lackey (R-Palmdale), Maienschein (R-San Diego), Mathis (R-Visalia), Mayes (R-Yucca Valley), Melendez (R-Lake Elsinore), Obernolte (R-Big Bear Lake), Olsen (R-Modesto), Patterson (R-Fresno), Steinorth (R-Rancho Cucamonga), Wagner (R-Irvine), Waldron (R-Escondido), Wilk (R-Santa Clarita).
Absent, Abstaining, Not Voting: Cooper (D-Elk Grove), Daly (D-Anaheim), Linder (R-Corona), Salas (D-Bakersfield).
The bill now heads to the Senate for policy committee hearings.
Staff Contact: Jennifer Barrera