BILL ANALYSIS Ó AB 67 Page 1 ASSEMBLY THIRD READING AB 67 (Gonzalez) As Amended January 25, 2016 Majority vote ------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+---------------------| |Labor |5-2 |Roger Hernández, Chu, |Harper, Patterson | | | |Low, McCarty, | | | | |Thurmond | | | | | | | |----------------+-----+----------------------+---------------------| |Appropriations |10-5 |Gomez, Bonta, |Bigelow, Chang, | | | |Calderon, Eggman, |Gallagher, Jones, | | | |Gordon, Holden, |Wagner | | | |Quirk, Rendon, Weber, | | | | |Wood | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Enacts the "Double Pay on the Holiday Act of 2016," as specified. Specifically, this bill: 1)Defines "family holiday" to mean the fourth Thursday of AB 67 Page 2 November each year. 2)Provides that any work performed at a retail store establishment or a grocery store establishment on a family holiday shall be compensated by the employer at no less than twice the employee's regular rate of pay. 3)Defines "retail store establishment" to mean a physical store within the state with more than 50% of its revenue generated from merchandise subject to the state's sales and use tax, including, but not limited to, electronics, appliances, clothing, furniture, sporting goods, health and personal products, or a limited line of food products for onsite consumption. A "retail store establishment" does not include a store located in a hotel, amusement park, or movie theater. 4)Defines "grocery store establishment" to mean a physical store within the state that sells primarily household foodstuffs for offsite consumption, including, but not limited to, the sale of fresh produce, meats, poultry, fish, deli products, dairy products, canned foods, dry foods, beverages, and baked or prepared foods. Other household supplies or products are secondary to the primary purpose of food sales. 5)Provides that "employee" does not include an employee covered by a valid collective bargaining agreement that meets specified criteria. 6)Provides that "employee" does not include an employee who is exempt from the payment of an overtime rate of compensation for executive, administrative, and professional employees pursuant to wage orders issued by the Industrial Welfare Commission, as specified. AB 67 Page 3 7)Provides that "employee" does not include an employee who is employed by an employer with 500 or fewer employees. 8)Provides that "employee" does not include an employee who is employed as a first responder or emergency personnel. FISCAL EFFECT: According to the Assembly Appropriations Committee, unknown General Fund costs, potentially in the low millions, to provide state employees and in home supportive services (IHSS) providers not covered by a valid collective bargaining agreement with two times the regular rate of pay for work provided on a "family holiday". There are 462,000 IHSS providers, many of whom work on Thanksgiving or Christmas and are not covered under a valid collective bargaining agreement. For illustration, if 10% of IHSS providers were provided double pay for one day of work, the state would incur costs of approximately $4.7 million. COMMENTS: This bill would enact the Double Pay on the Holiday Act of 2015 that would require an employer to pay at least two times the regular rate of pay to an employee for work on a family holiday, as defined. Supporters argue that this bill guarantees that employees are fairly compensated for the undue hardships associated with working on the traditional family holiday of Thanksgiving. They contend that the increasing commercialization of the holiday 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. AB 67 Page 4 Opponents argue that this bill will result in unavoidable cost increases for certain businesses. 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. Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0002563