California Legislature Sends Two Employment-Related Bills to Governor Schwarzenegger

Two employment-related bills we have been tracking were sent to Governor Schwarzenegger this month:

AB 2772 (Swanson) Appeal Bonds - This bill would clarify that an employer wishing to appeal an administrative judgment by the Labor Commissioner is required to first post a bond.

Labor Code Section 98.2 currently provides: "Whenever an employer files an appeal pursuant to this section, the employer shall post an undertaking with the reviewing court in the amount of the decision, order, or award."

This legislation is in response to a recent California appellate court decision (Progressive Concrete Inc.,v. Parker, 136 Cal. App. 4th 540, 548 (2006)) that held that the language in Labor Code Section 98.2 is merely “directory,” and that a specific court order is necessary before an employer can be required to post a bond.

The effect of the court’s holding is to leave entirely to the discretion of a court whether or not to issue an order requiring the positing of the bond. This Bill would expressly state that as a condition to filing an appeal of an administrative judgment, an employer must first post a bond with the reviewing court.

The Legislature sent this bill to the Governor on July 6.  During the legislative session, the Governor must sign or veto legislation within 12 days of the day of transmittal or it becomes law without signature.  If this bill becomes law, it will place additional financial burdens on employers attempting to appeal rulings made by the Labor Commissioner.

SB 1121 (Florez) Overtime - This bill would remove the exemption for agricultural employees from overtime and meal period requirements.

In general, California law requires daily overtime after eight hours in a day for non-exempt employees. The law also requires a 30 minute unpaid meal period before the start of the fifth hour of work, unless the work period is no more than six hours, and both the employer and the employee choose to waive the meal period by mutual consent.

Currently however, under Labor Code Section 554, an exemption exists for agricultural employees as defined in Industrial Welfare Commission Wage Order 14 from the daily overtime and meal period requirements. The current exemption allows agricultural employers to employ such employees up to ten hours in a day without paying overtime. If passed, this bill would remove these exemptions for agricultural employers, driving up the cost of employment of such workers in California.

Dozens of farm groups oppose the bill, and plan to urge the Governor to veto the bill, out of concern that farmers faced with higher employment costs could be driven out of business. A spokesman for the Governor stated that the Governor has not taken a position on the bill.

Please check back regularly for updates on these and other bills.

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