BILL ANALYSIS Ó AB 67 Page 1 Date of Hearing: March 18, 2015 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair AB 67 (Gonzalez) - As Introduced December 17, 2014 SUBJECT: Double Pay on the Holiday Act of 2015 SUMMARY: Enacts the "Double Pay on the Holiday Act of 2015," as specified. Specifically, this bill: 1)Defines "family holiday" to mean either December 25 or the fourth Thursday of November each year. 2)Provides that any work performed on a family holiday shall be compensated at no less than twice the employee's regular rate of pay. 3)Provides that "employee" does not include an employee covered by a valid collective bargaining agreement that meets specified criteria. FISCAL EFFECT: Unknown COMMENTS: This bill would enact the Double Pay on the Holiday Act of 2015 that would require an employer to pay at least two AB 67 Page 2 times the regular rate of pay to an employee for work on a family holiday, as defined. According to the author: "In recent years, Black Friday shopping deals have increasingly spread into the Thanksgiving holiday, forcing workers to miss out on celebrating the holiday and spending time with their families in order to keep their jobs. In some cases, this work has become mandatory, forcing workers to give up their holiday or risk losing their jobs. Many of these business practices have carried over to Christmas as well. The increasing commercialization of the holiday season has created significant public backlash, including petitions, media criticism and worker protests. This past Thanksgiving, millions of Americans worked at a dozen major retailers: Walmart, Macys, Sears/Kmart, Kohl's, Gap/Old Navy/Banana Republic, Target, Staples, JC Penney, Toys R Us, Sports Authority, Best Buy and Radio Shack. That includes nearly a million people at Walmart stores alone, and many more at food outlets like Starbucks. Current California law allows employers to mandate working scheduled overtime, and nationally there have been reports of retailers like Kmart threatening employees with termination if they don't work on Thanksgiving. In fact, more than three-fifths of the country's large employers have Thanksgiving shifts, while just one in five small businesses do the same. Recent polling found that half of Americans think that it's a AB 67 Page 3 bad idea for stores to be open on Thanksgiving, and despite talk about consumer demand, data shows that opening earlier didn't actually boost overall sales. Instead, sales on Thanksgiving Day just came out of Black Friday sales, meaning taking away employees' holiday didn't actually help the bottom line. Holiday work scheduling has inspired multiple petitions from workers and their families across the country. Nearly two-thirds of wealthy nations guarantee paid holidays, though the United States isn't one of them. On top of that, the United States is the only one not to guarantee any vacation days." Work Restrictions in Other States and "Blue Laws" This bill would appear to establish the first law in the nation that would require double pay for working on specified holidays. However, other state laws prohibit work from being performed on specified holidays or restrict the types of work that may performed on certain days, usually Sundays. Currently three states (Massachusetts, Rhode Island, and Maine) actually prohibit most retail stores, including grocery stores, from opening on Thanksgiving and Christmas. In Massachusetts, state law also prohibits stores from opening on the mornings of Columbus Day and Veterans Day without state permission. Maine allows certain sporting goods stores to remain open, an exemption that allows Maine-based outdoor retailer L.L. Bean to operate on a year-round basis. Many states and local jurisdictions have laws on the books that restrict work (or certain types of work) from being performed on Sundays. These laws are generally referred to as "blue laws." AB 67 Page 4 For example, more than 30 counties in the South have "blue laws" restricting the hours stores can open on Sundays. For instance, Aiken, South Carolina has a "blue law" that bans most stores from opening their doors before 1:30 on Sunday afternoons. Arizona previously limited alcohol sales hours on Sundays (10 a.m. to 2 a.m., the other six days of the week alcohol could be purchased starting at 6 a.m.). This law was repealed in 2010. Arkansas prohibits alcohol sales on Sundays. In addition, car dealerships may not open for sales on Sundays. Maine was the last New England state to repeal laws that prohibited department stores from opening on Sundays. The law prohibiting department stores from opening on Sundays was ended by referendum in 1990. Recent efforts to overturn the laws restricting automobile dealerships from opening on Sunday have died in committee in the Maine legislature. In addition in Maine, alcohol sales remain restricted between the hours of 1 a.m. and 7 a.m. Monday - Saturday and 1 a.m. and 9 a.m. on Sunday. In the past, certain state "blue laws" have been challenged on constitutional grounds. However, in the 1961 case of McGowan v. Maryland, 366 U.S. 420, the U.S. Supreme Court held that Maryland's laws violated neither the Free Exercise Clause nor the Establishment Clause of the First Amendment. It approved the state's blue law restricting commercial activities on Sunday, noting that while such laws originated to encourage attendance at Christian churches, the contemporary Maryland laws were intended to serve "to provide a uniform day of rest for all citizens" on a secular basis and to promote the secular values of "health, safety, recreation, and general well-being" through AB 67 Page 5 a common day of rest. That this day coincides with the Christian Sabbath is not a bar to the state's secular goals - it neither reduces its effectiveness for secular purposes nor prevents adherents of other religions from observing their own holy days. ARGUMENTS IN SUPPORT Supporters argue that this bill guarantees that employees are fairly compensated for the undue hardships associated with working on the traditional family holidays of Thanksgiving and Christmas. Like the author, they contend that the increasing commercialization of these holidays in recent years has forced workers to miss out on celebrating the holiday and spending time with their families in order to keep their jobs. In some cases, this work has become mandatory, forcing workers to give up their holiday or risk losing their jobs. They state that requiring employers in California to pay at least two times the regular rate of pay to an employee that works on Thanksgiving or Christmas will increase the level of respect for California's workers, assist in paying towards a living wage, and perhaps have retailers think twice about forcing a worker to miss a special holiday with his or her family. AB 67 Page 6 ARGUMENTS IN OPPOSITION Opponents argue that this bill will result in unavoidable cost increases for certain businesses. While some employers may close their place of business on a "family holiday" to accommodate their employees, others do not realistically have that option for their business models. For example, hospitals, medical facilities, and lodging accommodations, need to stay open even on "family holidays" for public benefit. Despite this, this bill would increase these employers' costs of doing business by forcing them to provide all employees with double pay. This mandate places such employers in an unfair predicament as they do not have the option to avoid those costs by closing down. Opponents also argue that this bill would create a competitive disadvantage for "brick-and-mortar" stores. They state that this bill would unilaterally increase the cost of doing business only for those employers who have a physical presence in California, thereby automatically placing them at a competitive disadvantage with online companies and out-of-state businesses that would not be subject to this cost. Opponents also argue that this bill is not explicitly limited to hourly paid employees, and therefore includes exempt, salaried employees. They contend that under this bill, no matter how long the exempt employee actually worked on a "family holiday," the AB 67 Page 7 exempt employee would be entitled to double compensation for the entire day, thereby significantly increasing the cost of all employers. This mandate would create a windfall for exempt employees who may work only an hour on a "family holiday." Finally, opponents argue that this bill violates constitutional rights to religious freedom. They state: "Forcing a non-Christian employer to recognize Christmas as a unique workday by paying all employees double their regular rate of pay is likely a violation of that employer's constitutional free exercise of religion. See Sands v. Morongo Unified School District, 53 Cal.3d 863, 879 (1991)(quoting Justice O'Connor that '[i]f government is to be neutral in matters of religion, rather than showing either favoritism or disapproval . . ., government cannot endorse the religious practices and beliefs of some citizens without sending a clear message to nonadherents that they are outsiders or less than full members of the political community.'") (citations omitted); Catholic Charities of Sacramento, Inc. v. Superior Ct., 32 Cal.4th 527, 547-548 (2004)(stating "[t]he government may not regulate beliefs as such by compelling or punishing their affirmation, nor may it target conduct for regulation only because it is undertaken for religious reasons . . ."). [This bill] is not neutral on its face, but rather, affirmatively recognizes Christmas as a "family holiday" on which employers must provide double compensation to all employees. This is a government endorsement of a Christian holiday, to the detriment of all other non-Christian religious denominations and beliefs. AB 67 Page 8 Similarly, forcing an employer, especially those who are immigrants and do not embrace American culture to recognize Thanksgiving as a special "family holiday" fails to embrace other cultures and beliefs. The Legislature should not mandate certain days as more significant based upon religious or cultural beliefs that are not maintained by all." In addition, the Construction Employers' Association opposes this bill unless amended because the collective bargaining exemption only applies if the agreement provides for paid sick days. They contend that this requirement is not germane to the bill and the exemption should be limited to the subject matter of the bill. COMMITTEE STAFF COMMENT: As discussed above, certain state or local laws that prohibit work (or certain work) from being performed on Sundays have generally been held to survive constitutional scrutiny. See, for example, McGowan v. Maryland, 366 U.S. 420 (1961), discussed above. AB 67 Page 9 In addition, federal law making Christmas a national holiday has similarly survived constitutional challenge. For example, a 1999 case argued that the federal recognition of Christmas as a holiday violated the First Amendment's establishment clause. However, the U.S. District Court rejected that argument. Ganulin v. U.S., 71 F.Supp. 2d 824 (S.D. Ohio 1999). In 2000, the 6th U.S. Circuit Court of Appeals affirmed the lower court decision, and the U.S. Supreme Court subsequently refused to grant certiorari. In a somewhat unusual precedent, the District Court Judge (Susan J. Dlott) prefaced her opinion with the following nine-stanza poem: The Court will address plaintiff's seasonal confusion erroneously believing Christmas merely a religious intuition. Whatever the reason constitutional or other, Christmas is not an act of Big Brother! Christmas is about joy and giving and sharing, it is about the child within us, it is most about caring! One is never jailed for not having a tree, for not going to church, for not spreading glee! The Court will uphold seemingly contradictory causes, *826 decreeing "the establishment" and "Santa" both worthwhile AB 67 Page 10 "Claus(es)!" We are all better for Santa, the Easter bunny too, and maybe the great pumpkin, to name just a few! An extra day off is hardly high treason. It may be spent as you wish, regardless of reason. The Court having read the lessons of "Lynch" refuses to play the role of the Grinch! There is room in this country and in all our hearts too, for different convictions and a day off too! Nevertheless, as discussed above, opponents argue that this bill, in mandating employers (including private employers) to pay premium wages for work performed on Christmas and Thanksgiving, violates constitutional rights to religious freedom. REGISTERED SUPPORT / OPPOSITION: Support CA Conference Board of the Amalgamated Transit Union CA Conference of Machinists AB 67 Page 11 California Immigrant Policy Center California Labor Federation, AFL-CIO California Nurses Association California School Employees Association California Teamsters Public Affairs Council Engineers & Scientists of California International Longshore & Warehouse Union Professional & Technical Engineers UNITE-HERE Utility Workers Union of America Opposition Agricultural Council of California Alhambra Chamber of Commerce AB 67 Page 12 Associated General Contractors CalChamber California Association of Bed and Breakfast Inns California Association of Health Services at Home California Attractions and Parks Association California Automotive Wholesalers Association California Broadcasters Association California Citrus Mutual California Cotton Ginners Association California Employment Law Council California Farm Bureau Association California Grocers Association California Hotel & Lodging Association California Manufacturers & Technology Association California New Car Dealers Association California Newspaper Association California Pool & Spa Association California Restaurants Association Camarillo Chamber of Commerce Construction Employers' Association Culver City Chamber of Commerce El Dorado Hills Chamber of Commerce & California Welcome Center Fullerton Chamber of Commerce Goleta Valley Chamber of Commerce Greater Conejo Valley Chamber of Commerce Greater Riverside Chambers of Commerce Greater San Fernando Valley Chamber of Commerce Lake Tahoe South Shore Chamber of Commerce Long Beach Area Chamber of Commerce Maxim Healthcare Services Motion Picture Association of America National Association of Theatre Owners of California/Nevada (NATO) Oxnard Chamber of Commerce Rancho Cordova Chamber of Commerce Redondo Beach Chamber of Commerce & Visitors Bureau San Jose Silicon Valley Chamber of Commerce Santa Clara Chamber of Commerce & Convention-Visitors Bureau Southwest California Legislative Council AB 67 Page 13 Southwest California Legislative Council Torrance Chamber of Commerce Valley Industry and Commerce Association Western Agricultural Processors Association California Dairies, Inc. Western Growers Association Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091