The Assembly yesterday passed a bill that could drive up costs of commodities to consumers by removing the existing overtime exemption allowed for agricultural employers.
AB 1066 (Gonzalez; D-San Diego) would establish new overtime rules for agricultural employers. Starting in 2019, employers with more than 25 employees will be required to pay overtime after 9 and a half hours of work. Each year thereafter, such employers’ overtime burden will increase by a half hour, until they are required to pay overtime to employees who work more than 8 hours by 2022. This incremental increased overtime mandate will not start for employers with 25 employees or less until 2022.
This bill is similar to AB 2757 (Gonzalez; D-San Diego), which failed passage on the Assembly Floor earlier this year.
A large coalition of agricultural employers, grower and agriculture associations, local chambers of commerce and the California Chamber of Commerce are opposed to AB 1066.
In its letter to the Assembly, the coalition highlights the following concerns with the bill:
AB 1066 will hurt farmworkers:
- $1.5 billion in reduced wages;
- $4,500 in reduced income per farmworker;
- 16% reduction in farmworker income.
AB 1066 will hurt farm production:
- $5.4 billion loss in crop production;
- The removal of 1.25 million acres of farm land from production;
- 2% decrease in crop production.
AB 1066 will hurt the economy:
- Up to 78,000 lost farm, processing, transportation, and support industry jobs;
- $7.8 billion in lost income statewide .
Farmers in California must compete with farmers in other states and countries that already have far lower wage costs. The buyers of California agricultural products—big box and traditional grocery chains, restaurant chains—set the price they will pay farmers. If California farmers cannot meet the stated price, the buyers can and do purchase from farmers in other states and countries.
California is already at a competitive disadvantage with other major agriculture production states. It is one of only a few states that require any overtime pay for agricultural workers, and the California requirement for daily overtime is already the most expensive. AB 1066 will only exacerbate that competitive disadvantage.
The coalition urges the Assembly not to view this bill in isolation. California saddles its farmers with the highest regulatory costs and compliance burdens in the nation. Below is a painfully partial list:
- Electricity costs for industrial users that are 63.4% higher than the national average.
- Gasoline costs nearly one-third higher than the national average.
- Diesel costs 14% higher than the national average.
- The highest workers’ compensation premium rates in the nation.
- California-only restrictions on use of approved crop protection tools that increase the risk of crop loss due to pests and disease.
- Water supply costs driven by regulatory loss of surface water supplies, forcing farmers to drill new and deeper wells, pay more for energy to pump, and scramble to purchase expensive water (if it can be found and conveyed) from others.
Unfortunately, AB 1066 will end up hitting many agricultural workers in the wallet. Farmers may be forced to pay higher overtime costs during peak harvest, but for the tens of thousands of workers who are employed year round (thinning trees, preparing ground for planting, etc.) the pressures of cost avoidance will translate to fewer hours worked as farmers add additional employees to avoid overtime costs, the coalition letter states.
AB 1066 passed the Assembly 44-32 on August 29.
Ayes: Alejo (D-Salinas), Arambula (D-Kingsburg), 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), Dababneh (D-Encino), Daly (D-Anaheim), C. 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), Hernández (D-West Covina), Holden (D-Pasadena), Jones-Sawyer (D-South Los Angeles), Linder (R-Corona), 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), Quirk (D-Hayward), Rendon (D-Paramount), Ridley-Thomas (D-Los Angeles), Rodriguez (D-Pomona), Salas (D-Bakersfield), Santiago (D-Los Angeles),Stone (D-Scotts Valley), Thurmond (D-Richmond), Ting (D-San Francisco), Weber (D-San Diego), Williams (D-Carpinteria)
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), Cooper (D-Elk Grove), Dahle (R-Bieber), Dodd (D-Napa), Frazier (D-Oakley), Gaines (R-El Dorado Hills),Gallagher (R-Yuba City), Gray (D-Merced), Grove (R-Bakersfield) ,Hadley (R-Torrance), Harper (R-Huntington Beach), 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).
No Vote Recorded: Eggman (D-Stockton), Irwin (D-Thousand Oaks), Levine (D-San Rafael), Wood (D-Healdsburg).
The bill now heads to the Governor’s desk.
Staff Contact: Jennifer Barrera