Metro Chamber Opposes New Holiday Wage Mandate

By Metro Chamber|August 10, 2016|Advocacy|

The Metro Chamber stands opposed to Assembly Bill 67, the Double Pay on the Holiday Act. Introduced by Assemblymember Lorena Gonzalez, the legislation’s stated goal is to ensure employees forced to work on Thanksgiving are paid twice their “regular rate of pay.”

While well-intentioned as a statement on the value of time off with family, the dressing in this bill is overcooked with unsavory favoritism and inconsistency.

First, the legislation targets only two industries – retailers and grocery stores. Yet, even for retail, there is favoritism. Under a “Disneyland exemption,” and retail outlet operating inside an amusement park is exempt.

In addition, this legislation only applies to businesses with an actual physical store. On-line retailers have no obligation to pay the higher wage, even for employees working in California exclusively. If we look at the growth of our region and new construction that is occurring – in particular in downtown Sacramento and along our commercial corridors – it is happening, in large part, because each project has ground-floor retailers or, in the case of the Midtown Whole Foods project, a grocery store. These industries have been responsible for our economic rejuvenation, and instead of helping them thrive, this measure seeks to add yet another wage mandate on the heels of requiring compensated sick leave and a $15/hour statewide minimum wage.

Since AB 67 requires employers to pay twice the “regular rate of pay,” the bill’s costs are obviously tied to our rising minimum wage, whose impact on consumer prices and how robustly we create jobs in these industries is unknown.

On the subject of “regular rate of pay,” that definition itself creates administrative and legal hassles for business owners. Under the Division of Labor Standards Enforcement’s definition, “regular rate of pay” also includes certain commissions, bonuses, and meal and food allowances, making the calculation of the proper rate itself potentially subject to good faith error.

Why does this matter? Because AB 67 is subject to the Private Attorneys General Act, which allows any attorney to file an action on behalf of an employee who claims a violation (with attorney’s fees on the table, of course). In 2014, there were 6,000 PAGA notices filed, and AB 67 would likely increase that number.

Beyond these concerns, AB 67 raises the very likely prospect of broader mandates in the future. Although this measure is presently applicable only on Thanksgiving for retail and grocery businesses with at least 500 employees, once the holiday pay framework is set in the California Code, it will be easier in the future to: (1) add other industries the legislature wishes to target; (2) decrease the number of employees you have to have before it applies; and (3) add additional holidays.

The addition of additional holidays given the diversity of our great state. As written, the legislation defines “family holiday” only to mean “the Fourth Thursday of November of each year.” What of families who believe other holidays should have equal significance and who find it offensive that the state enshrines only one for this special treatment?

In short, AB 67 is an effort to get a toehold that will ultimately become a boot to entrepreneurs and business owners of all feathers.

If you agree that AB 67 should be never take flight, please contact your state senator immediately. This measure is on third reading in the Senate now, having passed the Assembly already:

Senator Tom Berryhill: 916-651-4008
Senator Ted Gaines: 916-651-4001
Senator Cathleen Galgiani: 916-651-4005
Senator Jim Nielsen: 916-651-4004
Senator Richard Pan: 916-651-4006
Senator Lois Wolk: 916-651-4003

If you are unsure who your senator is, you may find it here by entering your address.

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