The State Of California Issues A New Wage Order That Takes Effect On January 1, 2001

The State of California Issues A New Wage Order That Takes Effect On January 1, 2001

By William C Last, Jr.

In 1999, California enacted the “Eight- Hour Day Restoration and Workplace Flexibility Act” (commonly referred to as AB-60). As part of the new law, the Industrial Welfare Commission, on October 23, 2000, instituted a new Interim Wage Order for On-Site Contractors, Mixing, Drilling, and Logging Industries (Wage Order 16).

Among others, the order applies to all persons employed in the on‑site occupations of construction, including, but not limited to, work involving alteration, demolition, building, excavating, renovation, remodeling, maintenance, improvement, and repair work, and work for which a contractor's license is required. The portion of the Wage Order that impacts contractors will be effective on January 1, 2001. During the interim, the existing Wage Orders that affect the construction industry will remain in effect.

The remainder of this article will highlight the significant changes:

1. Minimum Wage The employer will be obligated to pay to each employee wages not less than six dollars and twenty‑five cents ($6.25) per hour for all hours worked, effective January 1, 2001, and not less than six dollars and seventy‑five cents ($6.75) per hour for all hours worked, effective January 1, 2002.

2.Hours and Days of Work

a. General Provisions Employees shall not be employed more than eight (8) hours in any workday, or more than forty (40) hours in any workweek unless the employee receives one and one‑half (11/2) times such employee's regular rate of pay for all hours in the workweek. Employment beyond eight (8) hours in any workday, or more than six (6) days in any workweek is permissible provided the employee is compensated for such overtime at not less than:

(1) One and one‑half (11/2) times the employee's regular rate of pay for all hours worked in excess of eight (8) hours up to and including twelve (12) hours in any workday, and for the first eight (8) hours worked on the seventh (7th) consecutive day of work in a workweek; and_ (2) Double the employee's regular rate of pay for all hours worked in excess of twelve (12) hours in any workday, and for all hours worked in an excess of eight (8) hours on the seventh (7th) consecutive day of work in any work week. (3) The overtime rate of compensation to be paid to a nonexempt full‑time salaried employee shall be computed by using one‑fortieth (1/40) of the employee's weekly salary as the employee's regular hourly rate of pay.

b. Alternative Workweek The new Order allows for a regularly scheduled alternative workweek.

The alternative work week must be instituted through an election by the affected employees. Each proposal for an alternative workweek schedule shall be in the form of a written agreement proposed by the employer who has control over wages, hours and working conditions of the affected employees, and adopted in a secret ballot election, held before the performance of work, by at least a two‑thirds (2/3) vote of the affected employees.

The alternative workweek schedule shall provide for work by the affected employees of no longer than ten (10) hours per day within a 40‑hour workweek without the payment to the affected employees of an overtime rate of compensation. An affected employee working longer than eight hours but no more than ten (10) hours in a day pursuant to an alternative workweek schedule adopted pursuant to this section shall be paid an overtime rate of compensation of not less than one and one‑half (11/2) times the regular rate of pay of the employee for any work in excess of the regularly scheduled hours established by the alternative workweek agreement and for any work in excess of forty (40) hours per week. An overtime rate of compensation of not less than double the employee's regular rate of pay shall be paid for any work in excess of twelve (12) hours per day and for any work in excess of eight hours on those days worked beyond the regularly scheduled workdays established by the alternative workweek agreement.

c. Reporting Time Each workday that an employee is required to report to the work site and does report, but is not put to work, or is furnished less than half of his or her usual or scheduled day's work, the employer shall pay him or her for half the usual or scheduled day's work, but in no event for less than two (2) hours nor more than four (4) hours at the employee's regular rate of pay, which shall not be less than the minimum wage. The foregoing reporting time pay provisions are not applicable when: (1) Operations cannot commence or continue due to threats to employees or property, or when recommended by civil authorities; or (2) Public utilities fail to supply electricity, water, or gas, or there is a failure in the public utilities, or sewer system; or (3) The interruption of work is caused by an Act of God or other cause not within the employer's control. This section shall apply to any employee covered by a valid collective bargaining agreement unless the collective bargaining agreement expressly provides otherwise.

d. Rest Periods All employees shall be authorized to take rest periods, which insofar as practicable, shall be in the middle of each work period. An employer can stagger rest periods to avoid interruption in the flow of work and to maintain continuous operations, or schedule rest periods to coincide with breaks in the flow of work that occur in the course of the workday. The authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time for every four (4) hours worked, or major fraction thereof. Rest periods shall take place at employer designated areas, which may include or be limited to the employees immediate work area. A rest period need not be authorized for employees whose total daily work time is less than three and one‑half (3 ½) hours. Authorized rest period time shall be counted as hours worked for which there shall be no deduction from wages. If an employer fails to provide an employee a rest period in accordance with the applicable provisions of this Order, the employer shall pay the employee one (1) hour of pay at the employee's regular rate of compensation for each work day that the rest period was not provided. In cases where a valid collective bargaining agreement provides final and binding mechanism for resolving disputes regarding enforcement of the rest period provisions, the collective bargaining agreement will prevail. This subsection shall not apply to any employee covered by a valid collective bargaining agreement if the collective bargaining agreement provides equivalent protection.

3. Meal Periods No employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than thirty (30) minutes, except that when a work period of not more than six (6) hours will complete the day's work the meal period may be waived by mutual consent of employer and employee. An employer may not employ an employee for a work period of more than ten (10) Hours per day without providing the employee with a second meal period of not less than thirty (30) minutes, except that if the total hours worked is no more than twelve (12) hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived. In all places of employment the employer shall provide an adequate supply of potable water, soap, or other suitable cleansing agent and single use towels for hand washing. If there is a collective bargaining agreement, meal periods, shall not apply if the agreement expressly provides for the wages, hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than thirty (30) percent more than the state minimum wage.

4. Miscellaneous: Seats Where practicable and consistent with applicable industry‑wide standards, all working employees shall be provided with suitable seats when the nature of the process and the work performed reasonably permits the use of seats. Temperature The temperature maintained in each interior work area shall provide reasonable comfort consistent with industry‑wide standards for the nature of the process and the work performed. Elevators Where practicable and consistent with applicable industry‑wide standards, adequate elevators, escalators, or similar service consistent with industry‑wide standards for the nature of the process and the work performed, shall be provided, when employees are employed sixty (60) feet or more above or forty eight (48) feet or more below ground level.

5. Penalties Any employer or any other person acting on behalf of the employer who violates, or causes to be violated, the provisions of this order, shall be subject to civil and criminal penalties as provided by law. In addition, violation of any provision of this order shall be subject to a civil penalty as follows: (1) Initial Violation‑ $50.00 for each underpaid employee for each pay period during which the employee was underpaid in addition to an amount which is sufficient to recover underpaid wages.(2) Subsequent Violations‑ $100.00 for each underpaid employee for each pay period during which the employee was underpaid in addition to an amount which is sufficient to recover underpaid wages. (3) The affected employee shall receive payment of all wages recovered.

The foregoing changes are, in part, excerpts from Wage Order 16. You should review the whole Order. The Order can be found on the Industrial Welfare Commission’s website at http://www.dir.ca.gov/IWC/. Finally, between now and the effective date of the Order, the Order may be subject to further changes.

This article, ©2000, was written by William C. Last, Jr. Mr. Last is an attorney who has been specializing in Construction Law for over 20 years.. In addition to belonging to a number of construction trade associations, Mr. Last holds a California “A” and “B” license. He can be contacted at 415-764-1990 or 650-425-7679. A number of his past articles can be found on his website (lhfconstructlaw.com). This bulletin is published periodically to provide general information about current legal issues. The articles are not intended to be a substitute for the advice of an attorney as to a specific problem. If you have a specific legal question or need legal advice, you should contact an attorney.