On September 12, 2016, Governor Brown signed Assembly Bill 1066, known as “Phase-In Overtime for Agricultural Workers Act of 2016.” This legislation is designed to afford employees in the agricultural industry with similar overtime laws that have been enacted for non-exempt employees in other industries.
Previously, employees in the agricultural industry have been exempt from overtime laws applicable to other non-exempt employees. For instance, other California (non-agricultural) workers are afforded overtime pay (1 and a half times their regular rate of pay) for work in excess of 8 hours per day or 40 hours in one workweek. A minimum of twice the regular rate of pay is owed for work in excess of 12 hours in 1 day and any work in excess of 8 hours on the 7th day of a workweek. But for agricultural field workers, California overtime laws require less: overtime is due for work in excess of 10 hours per day or in excess of 6 days per week. Double-time is owed for all hours over 8 hours on the 7th day of work in a workweek.
Assembly Bill 1066 was enacted with controversy. Similar to arguments made in opposing minimum wage increases, representatives from the agricultural industry have argued that the new overtime laws will cause higher costs to the consumer, a reduction in work hours and business incentive to invest in mechanized agriculture to offset the added labor costs. To soften the financial impact on agricultural employers, the legislation does phase-in the overtime requirements over 4-years with additional time for employers of 25 or less employees.
As of January 1, 2019, for employers of more than 25 employees, overtime must be paid after the employee works in excess of 9 ½ hours in 1 day or 55 hours in 1 week. But employers of 25 employees or less have until January 1, 2022 to implement these overtime changes.
As of January 1, 2020, employers of more than 25 employees must provide overtime when the employee worked over 9 hours in a day and over 50 hours in one week. For employers of 25 employees or less, this law does not apply until January 1, 2023.
By January 1, 2021, employers of more than 25 employees must provide overtime when the employee worked more than 8 ½ hours in a day and 45 hours in a week. Employers of 25 or less employees have until January 1, 2024 to comply.
Effective January 1, 2022, employers of more than 25 employees must pay overtime when the employee worked over 8 hours in a day or 40 hours in a week. Employers of 25 or less employees have until January 2, 2025 to comply.
Beginning January 1, 2022, agricultural workers shall receive double their regular rate of pay for working over 12 hours in a workday. Employers of 25 workers or less have until January 1, 2025 to comply with the double-time requirement. Assembly Bill 1066 allows the Governor to temporarily suspend the phase-in overtime requirements if there is a suspension of scheduled minimum wage increases as provided by other statute. However, agricultural employers will need to plan for the new overtime requirements and be prepared for these annual overtime law adjustments.