California Phases in More State Law Overtime Pay for Agriculture Workers

California Governor Brown has signed AB 1066, or the Phase-In Overtime for Agricultural Workers Act of 2016. The new law does two things. 

• First, it phases in for agriculture employees the same overtime requirements that apply to all California hourly employees – i.e., overtime after 8 hours per day, 40 hours per week, and for the first 8 hours on the seventh consecutive day in a workweek; double time after 12 hours per day, and after 8 hours on the seventh consecutive day in a workweek. 
• Second, it eliminates the existing agricultural exemption in Labor Code Section 554(a) relating to one day’s rest in seven worked. As a result, starting January 1, 2017, employers of agricultural employees will not be permitted to “cause [their] employees to work more than six days in seven.” 

Overtime and Double Time Phase-In Schedule

Currently, California Wage Order No. 14 requires overtime for agriculture employees after 10 hours per day, 60 hours per week. For employers with more than 25 employees, AB 1066 gradually changes California law over a four-year period beginning in 2019.

AB 1066 adds Labor Code Sections 857-864 to the California Labor Code, specifically covering agriculture employees. It requires California Wage Order No. 14 to be updated consistent with the new sections. 

Section 860 creates a schedule that phases-in overtime requirements for California agriculture employees over the course of four years, from 2019 to 2022, to match those that apply to all California hourly employees per Labor Code Section 510. Below shows the scheduled phase-in of daily and weekly overtime and double time for agriculture employees:

Seventh Consecutive Day in a Workweek Overtime and Double Time

Under new Labor Code Section 862(b), starting January 1, 2019, agricultural employees will be entitled to overtime for the first 8 hours of work on the seventh consecutive day in a workweek, and double time for time worked in excess of 8 hours on the seventh consecutive day in a workweek. 

Employers of 25 or fewer employees have an additional three years to comply with the phasing in of these overtime requirements. The Governor is authorized to delay the implementation of these overtime pay provisions if the Governor also suspends the implementation of a scheduled state minimum wage increase.

Practical Impact

The elimination of the exemptions may lead to higher labor costs and an increase in the cost of produce. Because California is the nation’s largest agriculture state, even with the phase-in of the overtime requirements, consumers across the country may be impacted.