BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   THIRD READING 


          Bill No:  AB 67
          Author:   Gonzalez (D), et al.
          Amended:  8/3/16 in Senate
          Vote:     21 

           SENATE LABOR & IND. REL. COMMITTEE:  3-1, 6/8/16
           AYES:  Mendoza, Leno, Mitchell
           NOES:  Stone
           NO VOTE RECORDED:  Jackson

           SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           ASSEMBLY FLOOR:  43-32, 1/27/16 - See last page for vote

           SUBJECT:   Double Pay on the Holiday Act of 2016


          SOURCE:    United Food & Commercial Workers

          DIGEST:   This bill enacts the Double Pay on the Holiday Act of  
          2016 requiring a grocery or retail store establishment employer  
          to pay two times the regular rate of pay to an employee for work  
          on Thanksgiving Day. This bill defines grocery store  
          establishment and retail store establishment and, among other  
          things, specifies that a retail store establishment does not  
          include a retail store located in an amusement park.


          Senate Floor Amendments of 8/3/16 further clarify the exemption  
          of amusement parks by specifying that "retail store  
          establishment" does not include a retail store establishment  
          located in an amusement park or in a retail, dining, and  
          entertainment area under common control of the amusement park. 








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          ANALYSIS:  


          Existing law: 


          1)Defines a full workday as eight hours of labor, and 40 hours  
            as a workweek. Any additional hours worked must be compensated  
            with the payment of overtime wage rates.  (Labor Code §510)


          2)Requires the payment of overtime compensation as follows:


             a)   Work in excess of eight hours a day, and over 40 hours  
               in a workweek, and the first eight hours worked on the  
               seventh day of a workweek shall be compensated at the rate  
               of no less than 1 times the regular pay rate.


             b)   Work in excess of 12 hours in one day shall be  
               compensated at the rate of no less than twice the regular  
               rate of pay for an employee.


             c)   Work in excess of eight hours on any seventh day of a  
               workweek shall be compensated at the rate of no less than  
               twice the regular pay rate.


          3)Provides that the overtime compensation requirements do not  
            apply to certain executive, administrative and professional  
            employees that meet specified criteria for exemption.


          4)States that any person who violates these overtime wage  
            provisions is guilty of a misdemeanor. 


          This bill:









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          1)Enacts the Double Pay on the Holiday Act of 2016 requiring any  
            work performed at a retail or grocery store establishment on a  
            family holiday to be compensated at no less than twice the  
            employee's regular rate of pay.


          2)Defines "family holiday" as the fourth Thursday of November of  
            each year.


          3)Defines "retail store establishment" as a physical store  
            within the state with more than 50 percent of its revenue  
            generated from merchandise subject to the state's sales and  
            use taxes, including, but not limited to, electronics,  
            appliances, clothing, furniture, sporting goods, health and  
            personal products. A "retail store establishment" includes a  
            retail food facility, if the retail food facility is located  
            within a retail store establishment.  A "retail store  
            establishment" does not include a retail store establishment  
            located in an amusement park, hotel, movie theater, a new  
            motor vehicle dealer, as defined, or a ski resort. 


          4)Defines "grocery store establishment" as 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. A "grocery  
            store establishment" includes a separate retail food facility  
            that is located within a grocery store establishment and  
            primarily sells food for onsite consumption. A "grocery store  
            establishment" does not include a store that occupies 5,000  
            square feet or less of floor space and that sells  
            transportation fuels in conjunction with, and at the same  
            physical location as, household foodstuffs for offsite  
            consumption.


          5)Provides that "employee" does not include the following: 


             a)   An employee covered by a valid collective bargaining  







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               agreement that meets specified criteria, including the  
               payment of holiday premium pay and a regular hourly rate of  
               pay of not less than 30 percent more than the state minimum  
               wage.


             b)   An employee who is exempt from the payment of overtime  
               under the executive, administrative, and professional  
               employee exemption under current law. 


             c)   An employee who is employed by an employer with 500 or  
               fewer employees.


          6)Specifies that these provisions do not apply to a retail food  
            facility unless it is a grocery store establishment, or is  
            located within a retail store establishment, or is located  
            within a grocery store establishment and primarily sells food  
            for onsite consumption. 


          7)Specifies that "retail food facility" has the same meaning as  
            in Section 113789 of the Health and Safety Code. 


          Background


          Black Friday, the day following Thanksgiving Day in the United  
          States, and the sales that many stores offer to entice customers  
          has set the beginning of the holiday shopping season in motion  
          for many decades.  Black Friday has routinely been the busiest  
          shopping day of the year; with stores opening their doors to  
          customers as early as 4:00am.  However, in recent years there  
          has been a changing trend of starting the Black Friday specials  
          early - on Thanksgiving Day. Several large retailers have  
          started opening their doors as early as 5:00pm on Thanksgiving  
          Day and staying open overnight in an attempt to appeal to the  
          sale seeking shoppers. 


          Although appealing to many, these retail practices come with  
          several consequences including that of making high demands on  







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          staff who are needed in order to keep such long open hours, and  
          especially for those required to work on Thanksgiving Day.  
          Additionally, both customers and employees face health and  
          safety risks due to insufficient staff for the high number of  
          consumers walking in the door.  Even as many stores stretch  
          their hours into the holiday, there has been some push back from  
          several retailers who have decided to do the opposite and close  
          their stores completely on Thanksgiving Day giving their  
          employees the opportunity to spend the day with their families  
          and friends for the holiday. 


          Need for the bill?  California law does not require that an  
          employer provide its employees with paid holidays, that it close  
          its business on any holiday, or that employees be given the day  
          off for any particular holiday. Hours worked on holidays,  
          Saturdays, and Sundays are treated like hours worked on any  
          other day of the week.  Employers are free to create their own  
          policies regarding holidays and can choose to give their  
          employees time off from work with pay, but nothing in the law  
          requires such a practice. Additionally, there is nothing in the  
          law mandating that an employer pay an employee a special premium  
          for work performed on a holiday, Saturday, or Sunday, other than  
          the overtime premium required for work performed in excess of  
          eight hours in a workday or 40 hours in a workweek.  


          According to the author, the recent trend of Black Friday  
          shopping deals spreading into the Thanksgiving holiday is  
          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 and as such, the  
          author believes that employees should be fairly compensated for  
          the undue hardships associated with working on the traditional  
          family holiday. This bill requires retail and grocery store  
          employers to pay at least two times the regular rate of pay to  
          an employee for work on Thanksgiving Day. 




          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes








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          SUPPORT:   (Verified8/4/16)


          United Food & Commercial Workers, Western States Council  
          (source)
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Employment Lawyers Association
          California Immigrant Policy Center
          California Labor Federation
          California Nurses Association
          California School Employees Association
          California State Association of Electrical Workers
          California State Pipe Trades Council
          California Teamsters Public Affairs Council
          Communication Workers of America, District 9
          Engineers & Scientists of California
          Professional & Technical Engineers
          UNITE HERE, AFL-CIO
          International Longshore & Warehouse Union
          United Farm Workers
          Utility Workers Union of America
          Western States Council of Sheet Metal Workers


          OPPOSITION:   (Verified8/4/16)


          Agricultural Council of California
          Alhambra Chamber of Commerce
          Brea Chamber of Commerce
          California Association of Bed and Breakfast Inns
          California Chamber of Commerce
          California Employment Law Council
          California Grocers Association
          California Hotel & Lodging Association
          California League of Food Processors
          California Pool & Spa Association
          California Restaurants Association 
          California Retailers Association  
          California Travel Association 
          Camarillo Chamber of Commerce
          CAWA - Representing the Automotive Parts Industry







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          Cerritos Regional Chamber of Commerce
          Chambers of Commerce Alliance of Ventura and Santa Barbara  
          Counties
          Computing Technology Industry Association - CompTIA
          Culver City Chamber of Commerce
          Desert Hot Springs Chamber of Commerce and Visitors Center
          East Valley Legislative Advocacy Council
          El Dorado County Chamber of Commerce
          El Dorado Hills Chamber of Commerce & California Welcome Center
          Gateway Chambers Alliance
          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
          North Lake Tahoe Chamber of Commerce
          North Orange County Chamber
          Orange County Business Council 
          Oxnard Chamber of Commerce
          Rancho Cordova Chamber of Commerce
          Redondo Beach Chamber of Commerce & Visitors Bureau
          San Diego Regional Chamber of Commerce
          San Jose Silicon Valley Chamber of Commerce
          Santa Clara Chamber of Commerce & Convention-Visitors Bureau
          Santa Maria Valley Chamber of Commerce Visitor & Convention  
          Bureau
          Simi Valley Chamber of Commerce
          Southwest California Legislative Council
          Torrance Chamber of Commerce
          Valley Industry and Commerce Association


          ARGUMENTS IN SUPPORT:     According to proponents, in recent  
          years, Black Friday shopping deals have increasingly spread into  
          the Thanksgiving holiday, forcing workers to miss out on  
          celebrating the holiday 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. The author and proponents argue that this bill simply  
          seeks to provide employees with double pay in order to meet the  
          increase in consumer demand on Thanksgiving Day and "pre"-Black  
          Friday shopping.  Proponents believe this bill would guarantee  







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          that employees are fairly compensated for the undue hardships  
          associated with working on the traditional family holiday of  
          Thanksgiving.  


          ARGUMENTS IN OPPOSITION:     A coalition of opponents argue that  
          this bill unfairly targets two classifications of employers,  
          retail and grocery store establishments, increases their costs,  
          and creating a competitive disadvantage by forcing them to  
          recognize Thanksgiving as a "family holiday" and compensate all  
          employees with double the regular rate of pay for work on that  
          day. Any other employer who opens on Thanksgiving can continue  
          to pay their employees minimum wage. Opponents also argue that  
          this bill unilaterally increases the cost of doing business only  
          for those employers who have a "physical store" in California,  
          thereby automatically placing them at a competitive disadvantage  
          with online retailers and out-of-state businesses not subject to  
          this costly mandate. 


          Additionally, opponents argue that many of the "retail store  
          establishment" employers surveyed confirmed they voluntarily pay  
          their employees time and a half for work on Thanksgiving. They  
          also note that numerous grocery store establishments also pay  
          increased compensation on Thanksgiving, as negotiated through  
          the collective bargaining process, yet would still be subject to  
          the provisions of AB 67 as they do not qualify for the  
          collective bargaining exemption.  


          Also of concern to opponents is the requirement that employers  
          pay double the employee's "regular rate" of pay rather than  
          double the "hourly rate," a significant different, they argue,  
          as the determination of the regular rate of pay requires a  
          detailed calculation that goes beyond just an employee's hourly  
          pay. They argue that good faith errors made in calculating the  
          regular rate of pay or failure to comply with other provisions  
          of AB 67 would be subject to Private Attorneys General Act and  
          add another threat of litigation against California employers.  
          Lastly, opponents argue that this bill provides preferential  
          treatment for one day out of the year that not all recognize as  
          a family holiday and may be offensive to those that believe  
          other days within the year deserve that recognition.  








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          A restaurant specific point of opposition comes from the  
          California Restaurant Association which argues that this bill,  
          although exempting a share of the restaurant community, leaves  
          many subject to the double-pay requirements based on the mere  
          fact that they operate within retail or grocery establishments  
          even though they are separate and independent. They argue that  
          these restaurants will face unfair competition as they will be  
          forced to pay double hourly pay to its employees while  
          restaurants outside a retail or grocery store, but in the same  
          shopping center or across the street, do not.  


          ASSEMBLY FLOOR:  43-32, 1/27/16
          AYES:  Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,  
            Campos, Chau, Chiu, Chu, Eggman, Cristina Garcia, Eduardo  
            Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger  
            Hernández, Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty,  
            Medina, Mullin, Nazarian, O'Donnell, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Santiago, Mark Stone, Thurmond,  
            Ting, Weber, Williams, Wood, Atkins
          NOES:  Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,  
            Chávez, Cooley, Dababneh, Dahle, Dodd, Frazier, Beth Gaines,  
            Gallagher, Grove, Hadley, Harper, Irwin, Jones, Kim, Lackey,  
            Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen,  
            Patterson, Steinorth, Wagner, Waldron, Wilk
          NO VOTE RECORDED:  Cooper, Daly, Linder, Salas

          Prepared by:Alma Perez-Schwab / L. & I.R. / (916) 651-1556
          8/5/16 11:08:23


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