January 10, 2019

Wage Order 14 Update Now Approved and Published

The January 2019 update to Wage Order 14 has received final approval and is now published and in effect. The revised wage order includes the minimum wage in effect for employers with 26 or more employees ($12.00/hour) and employers with 25 or fewer employees ($11.00/hour), as well as future approved increases

The wage order also implements AB 1066 by removing the former 10 hour day/6th day thresholds for paying overtime.  Under the new wage order, employers with 26 or more employees will have to pay overtime to agricultural employees after 9 ½ hours worked in a day or 55 hours worked in a workweek.

The exemption for irrigators no longer applies to employers with 26 or more employees while small employers (those with 25 or fewer employees) may apply the exemption until 2022.

Also, the revised wage order makes clear that a second meal period is required if an employee works between ten and 12 hours. This is helpful, as the prior wage order was vague as to whether a second meal period had to be provided after 11 hours.  The revision aligns Wage Order 14 with most other wage orders with regard to meal periods.

The statutes do not specify how to count employees, however, the California’s Division of Labor Standards Enforcement (DLSE) issued FAQs concerning the state’s minimum wage increases that provide useful guidance in calculating the number of employees. The FAQ’s state that:

  • All employees will be counted, including exempt employees, regardless of hours worked or their location.
  • Employers must make a reasonable, good faith determination, which should take into consideration that the law is generally interpreted to favor workers.
  • In joint employment scenarios, all individuals under an employer’s control are counted.
  • If workers are provided by a labor contractor, an employer should count those individuals as its employees.

Under the DLSE’s interpretation, many otherwise small employers will be surprised to learn that they will be considered large if they utilize the services of a farm labor contractor.

The statutes also do not specify what timeframe to use when calculating the number of employees, but the DLSE has indicated it will calculate the number of employees on a pay period by pay period basis, focusing on the pay periods in which a violation is alleged. 

In close calls, it is prudent to be conservative in your count, understanding that courts are generally going to count in the manner that benefits the employees, not the employer.