Existing law provides that 8 hours of labor constitutes a days work. Under existing law, any work in excess of 8 hours in one workday and any work in excess of 40 hours in any one workweek, and the first 8 hours worked on the 7th day of work in any one workweek, is required to be compensated at the rate of no less than 1¹/₂ times the regular rate of pay for an employee. Existing law also provides that hours worked in excess of 12 hours in one day as well as hours worked in excess of 8 hours on any 7th day of work are to be compensated at the rate of no less than twice the regular rate of pay of an employee. Existing law exempts from these provisions an individual employed as a teacher at a private elementary or secondary academic institution if specified requirements are met, including, among others, that the employee earns a monthly salary equivalent to the greater of no less than the lowest salary offered by any school district or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county office of education in which the private elementary or secondary institution is located, as specified.

This bill would specify that the existing standards apply to full-time employees and would prescribe a revised earnings standard for exemption from overtime provisions for part-time employees that would require a part-time employee earn the proportional amount of a full-time salary that is equal to the proportion of the full-time instructional schedule for which the part-time employee is employed. The bill would provide that a private school may use school salary schedules in effect for up to 12 months prior to the start of the school year, for use in budgeting for salaries under these provisions.

Existing law provides that 8 hours of labor constitutes a days work. Under existing law, any work in excess of 8 hours in one workday and any work in excess of 40 hours in any one workweek, and the first 8 hours worked on the 7th day of work in any one workweek, is required to be compensated at the rate of no less than 1¹/₂ times the regular rate of pay for an employee. Existing law also provides that hours worked in excess of 12 hours in one day as well as hours worked in excess of 8 hours on any 7th day of work are to be compensated at the rate of no less than twice the regular rate of pay of an employee. Existing law exempts from these provisions an individual employed as a teacher at a private elementary or secondary academic institution if specified requirements are met, including, among others, that the employee earns a monthly salary equivalent to the greater of no less than the lowest salary offered by any school district or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county office of education in which the private elementary or secondary institution is located, as specified.

This bill would specify that the existing standards apply to full-time employees and would prescribe a revised earnings standard for exemption from overtime provisions for part-time employees that would require a part-time employee earn the proportional amount of a full-time salary that is equal to the proportion of the full-time instructional schedule for which the part-time employee is employed. The bill would provide that a private school may use school salary schedules in effect for up to 12 months prior to the start of the school year, for use in budgeting for salaries under these provisions.

Existing law establishes the Industrial Welfare Commission within the Department of Industrial Relations and specifies that the commission consists of 5 members appointed by the Governor with the consent of the Senate.

This bill would make a nonsubstantive change to that provision.

Date of Hearing: June 28, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 621

Author:(Bradford) – As Amended Ver:March 23, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill clarifies that the minimum salary standard for classifying part-time private school teachers as exempt employees is in proportion of the full-time instructional schedule for which the employee is employed. This bill also makes various clarifying changes to provisions related to overtime exemptions for private school teachers.

FISCAL EFFECT:

Negligible state costs.

COMMENTS:

1. Background. AB 2613 (Mullin), Chapter 159, Statutes of 2006, established an overtime exemption for teachers at private elementary or secondary academic institutions. That bill was passed in part because private schools believed that their teachers, who were not always credentialed, did not fall within existing wage orders’ definition of teaching. As a result of AB 2613, a private school teacher was exempt if he or she had earned at least twice the statewide minimum wage, matching the standard that applies to credentialed teachers.
2. Additional changes to private school teacher overtime. AB 2230 (Chu), Chapter 314, Statutes of 2016, changed the overtime exemption for private school teachers once again. Advocates for that bill argued that an overtime exemption based on twice the minimum wage did not reflect the day-to-day realities of the teaching profession, and that school budgeting was made more difficult with this definition amid a gradually increasing minimum wage. Instead, as a result of AB 2230, private school teachers are exempt employees if they earn either at least the lowest salary offered to a credentialed teacher in any school district or no less than 70% of the lowest schedule salary offered to a credentialed teacher by the school district or county in which the private school is located.
3. Purpose. According to supporters, SB 621 is a technical follow-up to AB 2230 to clarify how new exemption standards apply to part-time employees and to address implementation concerns. The California Catholic Conference argues that this bill will facilitate compliance and ensure that part-time teachers are equitably accounted for as exempt employees.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: June 7, 2017

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Tony Thurmond, Chair

SBPCA Bill Id:SB 621

Author:(Bradford) – As Amended Ver:March 23, 2017

SENATE VOTE: 38-0

SUBJECT: Overtime compensation: private school teachers

SUMMARY: Creates a minimum salary standard for classifying part-time private school teachers as exempt employees, and clarifies the conditions for calculating minimum salary standards. Specifically, this bill:

1. Prescribes a revised earnings standard for exemption from overtime provisions for part-time employees. Specifically that in order to be exempt from overtime, private school teachers must make, on and after July 1, 2017, a proportional percentage of the amount of the full-time schedule they worked that is the greater of either:
   1. 100 percent of the lowest salary for their position offered by any school district in the state.
   2. 70 percent of the lowest salary offered for their position by the school district or county in which their private institution is located.
2. Specifies that in the above salary standard conditions “county” means “county office of education.”
3. Provides that when budgeting for a future school year, a private elementary or secondary academic institution may determine the salary requirements of these sections, by referring to school salary schedules in effect for up to 12 months prior to the start of the school year.
4. Clarifies that the overtime standards in existing law, apply to full-time employees.
5. Makes other technical and clarifying changes.

EXISTING LAW:

1. Provides that eight hours of labor constitutes a day’s work.  Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek, and the first eight hours worked on the seventh day of work in any one workweek, is required to be compensated at the rate of no less than 1¹/₂ times the regular rate of pay for an employee. 
2. Provides that hours worked in excess of 12 hours in one day as well as hours worked in excess of eight hours on any seventh day of work are to be compensated at the rate of no less than twice the regular rate of pay of an employee.
3. Exempts from these provisions an individual employed as a teacher at a private elementary or secondary academic institution if specified requirements are met, including, among others, that the employee earns a monthly salary equivalent to the greater of no less than the lowest salary offered by any school district or the equivalent of no less than 70% of the lowest schedule salary offered by the school district or county office of education in which the private elementary or secondary institution is located, as specified.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS: The author argues that, “[This measure] is a clean-up bill that removes ambiguity in the law in order to ensure that part-time teachers in private schools receive fair compensation. Last year AB 2230 (Chu), which passed without opposition, established a new earnings standard for designating private school teachers as exempt employees. However, there is uncertainty regarding the status of part-time private school teachers whose pay standards are not justly accounted for under existing law. This bill will clear up issues with current law in order to provide satisfactory and consistent compensation for both part-time and full-time employees.”

Background on Overtime and Salary Thresholds

The Federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for workers in the public and private sector. FLSA states that in cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.

For most non-exempt employees, overtime pay is at a rate not less than one and one-half times the regular rate of pay, is required after more than eight hours of work in a day, in excess of 40 hours of work in a workweek. Existing law also requires that any work in excess of 12 hours a day and in excess of eight hours on the seventh day of work are to be compensated at no less than twice the regular rate of pay.

During the Obama Administration, the US Department of Labor (USDOL) began a rule making process to update the salary and compensation levels needed for executive, administrative and professional workers to be considered exempt from the FSLA. Under the regulations adopted USDOL in 2016, the threshold moved from $23,660 per year to $47,476 per year. However, the new regulations were challenged in court and a judge enjoined the USDOL from implementing and enforcing the regulations that established this new threshold. While this decision was appealed by the Obama Administration, the current administration has walked away from this appeal. So, the old federal standards will remain in effect.

California, meanwhile, maintains overtime standards similar to but slightly different from federal law. Rather than set the salary threshold at a specific dollar amount, state law sets the level at twice that of the minimum wage. In 2017, the exemption threshold is $41,600 for employers with 25 or fewer workers and $43,680 for those with 26 or more employees. As the California minimum wage rises, so will this amount: $43,680/$45,760 in 2018 and $45,760/$49,920 in 2019. By the time California’s statewide minimum wage reaches $15 for all employees, the salary threshold will be $62,400.

Background on Exempted Professions, in particular Teachers

Labor Code authorizes the Industrial Welfare Commission (IWC) to establish exemptions from the overtime requirements for executive, administrative and professional employees. The employee must be primarily engaged in the duties that meet the test of the exemption, customarily and regularly exercise discretionary power and independent judgment in performing those duties, and as stated above earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment.

This "professional exemption" has been incorporated into IWC wage orders that apply to a person employed in a professional capacity and among other requirements is licensed by the State of California and primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting.

Specifically with respect to "teaching" under the professional exemption, existing law had previously defined teaching as meaning the employee is engaged in the "profession of teaching under a certificate from the Commission for Teacher Preparation and Licensing or teaching in an accredited college or university."

In 2006, the California Association of Private School Organizations (CAPSO) and other advocates argued that because private school teachers are generally not certified or credential by the state, they do not fall within the definition of "teaching” under the IWC wage orders. CAPSO had argued that this distinction is unfair because many private school teachers perform the same function and meet or exceed many of the same standards as their public sector or credentialed counterparts. This is why they felt AB 2613 (Mullin) Chapter 159, Statutes of 2006 was necessary to establish an overtime exemption for teachers who meet specified requirements at private elementary or secondary academic institutions.

Arguments in Support

The California Catholic Conference writes in support, “Last year AB 2230 amended Labor Code 515.8 to establish a new professionally-based earnings standard for designating private school teachers as exempt employees. In developing guidance… implementation issues have been identified that should be addressed this Legislative Session in order to clean-up the law.  These issues involve technical amendments that would:  1) account for part-time teachers; 2) clarify what is meant by the lowest salary schedule offered by “the... county”; and 3) assist with the budgeting of salaries. Ensuring a well-prepared and exceptionally effective PreK-12 teaching force in service to all California's students, especially those most in need, is a top education priority of the California Catholic Conference.  This is the single most crucial strategy for providing students with an equitable and excellent education.  

We support SB 621 because it facilitates compliance with the existing requirements of Labor Code Section 515.8 which honors private school teachers as professional educators. This bill will ensure that part-time teachers are equitably accounted for as exempt employees by requiring that they earn the proportional amount of a full-time salary of the instructional schedule for which they are employed. This bill would also remove an existing ambiguity in the law would by clarifying that “county” means “county office of education.” Finally SB 621 will assist with budgeting for compensation, by permitting private schools to calculate the relevant salary thresholds by using public school salary schedules that are in effect up to 12 months prior to the start of the next school year. For these reasons, as the official public policy voice of the Catholic Church in California, we request an “Aye” vote on SB 621.”

The California Association of Private School Organizations argues in support, “SB 621 provides several important “clean-up” amendments to AB 2230 (Chu), a bill passed without opposition during the prior legislative session that amended Labor Code Section 515.8 in a manner that established a new basis for the salary test used to determine the exempt status of a teacher employed in a California private school. The new test employs criteria that are directly linked to salaries offered to public school teachers, both within the district in which a private school is located, and statewide.

SB 621 contains three proposed amendments to Labor Code Section 515.8 that are intended to facilitate compliance with the new salary test provisions. The first of these addresses the issue of faculty employed on a part-time basis by establishing a minimum salary threshold that is proportionate to fulltime employment. Whereas the great majority of private school teachers are employed on a fulltime basis, many teachers of elective and/or specialty subjects (e.g., Japanese, photography, marine biology, etc.) hold part-time positions for which Section 515.8 currently makes no provision. SB 621’s proportionality provision offers a fair and straightforward remedy to this problem.

Secondly, private school administrators routinely prepare budgets and execute teacher contracts for a coming school year at times when public school salary schedules for the next school year are unavailable. SB 621 proposes a simple fix for this problem by permitting the use of salary schedule figures in effect up to 12 months prior to a new school year for purposes of determining salary thresholds for exempt private school teachers. Finally, SB 621 clarifies that the word “county,” as it currently appears in Labor Code Section 515.8 refers to county offices of education. We believe the provisions proposed by SB 621 are both necessary and reasonable, and are confident that their enactment will serve to greatly facilitate compliance with the existing requirements of Labor Code Section 515.8.”

Previous Related Legislation

AB 2230 (Chu) Chapter 314, Statutes of 2016 amended an existing overtime exemption for private school teachers to tie the exemption to comparable public school teacher salaries, rather than the state minimum wage.

AB 2613 (Mullin) Chapter 159, Statutes of 2006 created the current private school teacher overtime exemption.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Private School Organizations

California Catholic Conference

Opposition

None on file

Analysis Prepared by: Taylor Jackson / L. & E. / 916-319-2091

 THIRD READING  

Bill No: SB 621

Author:

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 5-0, 4/5/17

AYES: Bradford, Stone, Atkins, Jackson, Mitchell

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT:

SOURCE: Author

DIGEST: This bill creates a minimum salary standard for classifying part-time private school teachers as exempt employees, and clarifies the conditions for calculating minimum salary standards.

ANALYSIS:

Existing law:

1. Defines a full workday as 8 hours, and 40 hours as a workweek. Overtime wage rates must be paid for any time worked beyond these defined periods (Labor Code §510).
2. Requires overtime to be paid at the rate of no less than one and one-half times an employee’s regular rate of pay for work performed beyond 8 hours in a day or 40 hours in a week. Furthermore, work performed beyond 12 hours in a day is to be compensated at twice the regular rate of pay (Labor Code §510).
3. Defines a private school teacher as an employee who primarily imparts knowledge to pupils by teaching, instructing, or lecturing, and customarily and regularly exercises discretion and independent judgment in performing the duties of a teacher (Labor Code §515.8).
4. Requires that in order to be exempt from overtime, private school teachers at an elementary or secondary institution must make, on and after July 1, 2017, the greater of either:
   1. 100 percent of the lowest salary for their position offered by any school district in the state.
   2. 70 percent of the lowest salary offered for their position by the school district or county in which their private elementary or secondary institution is located. (Labor Code §515.8)

This bill:

1. Creates a minimum salary standard that part-time private school teachers must be paid in order to classify them as exempt employees. These employees must be paid whatever percentage of a full-time salary that corresponds to the percentage of a full-time schedule that the teacher worked.
2. Specifies that this minimum salary standard for part-time private school teachers is calculated using the same conditions for determining full-time salary. Namely, that in order to be exempt from overtime, private school teachers must make, on and after July 1, 2017, a proportional percentage of the amount of the full-time schedule they worked that is the greater of either:
   1. 100 percent of the lowest salary for their position offered by any school district in the state.
   2. 70 percent of the lowest salary offered for their position by the school district or county in which their private institution is located.
3. Identifies that in the above salary standard conditions “county” means “county office of education.”
4. States that when budgeting for compensation and contracts for teachers, private elementary or secondary schools may use the public school salary schedules from the previous 12 months prior to the start of the school year in order to determine their own salary standards for private school teachers.

Comments

Need for this bill? According to the author, SB 621 is a clean-up bill that removes ambiguity in the law in order to ensure that part-time teachers in private schools receive fair compensation. Last year AB 2230 (Chu, Chapter 314, Statutes of 2016), which passed without opposition, established a new earnings standard for designating private school teachers as exempt employees. However, the author feels that there is uncertainty regarding the status of part-time private school teachers whose pay standards are not justly accounted for under existing statute. The author believes that SB 621 will clear up issues with current law in order to provide satisfactory and consistent compensation for both part-time and full-time employees. Additionally, the author states that SB 621’s language is the product of negotiations between private schools and teachers unions.

Related/Prior Legislation

AB 2230 (Chu, Chapter 314, Statutes of 2016) created a new private school teacher overtime exemption that is a salary standard tied to comparable public school teacher salaries, rather than the state minimum wage.

AB 2613 (Mullin, Chapter 159, Statutes of 2006) created the previous private school teacher overtime exemption with a salary standard based on the state’s minimum wage.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 4/18/17)

California Association of Private School Organizations

California Catholic Conference

OPPOSITION: (Verified 4/18/17)

None received

ARGUMENTS IN SUPPORT: Proponents contend that SB 621 assures that part-time teachers are equitably recognized by requiring that they earn the proportional amount of a full-time salary of the instructional schedule for which they are employed. They state that while the great majority of private school teachers are employed on a full-time basis, many teachers of elective and/or specialty subjects (e.g., Japanese, photography, marine biology, etc.) hold part-time positions for which current law makes no provision. Proponents argue that SB 621’s proportionality provision offers a reasonable and straightforward remedy to this problem.

Finally, proponents state that private school administrators routinely prepare budgets and execute teacher contracts for a coming school year at times when public school salary schedules for the next school year are unavailable. They believe that SB 621 fixes this problem by permitting the use of salary schedule figures in effect up to 12 months prior to a new school year for purposes of determining salary thresholds for exempt private school teachers. Proponents state that ensuring a well-prepared and exceptionally effective Pre-Kindergarten through12th-Grade teaching force is a service to all California's students, and a top education priority.

Prepared by:

4/19/17 14:48:00

**** END ****

`SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS

Senator Steven Bradford, Chair

2017 - 2018 Regular

Bill No: SB 621 Hearing Date: April 5, 2017

Subject: Overtime compensation: private school teachers

KEY ISSUE

Should the Legislature create a minimum salary standard for classifying part-time private school teachers as exempt employees?

Should the Legislature clarify the conditions for calculating minimum salary standards in order to classify private school teachers as exempt employees?

ANALYSIS

Existing law

1. Defines a full workday as 8 hours, and 40 hours as a workweek. Overtime wage rates must be paid for any time worked beyond these defined periods (Labor Code §510).
2. Requires overtime to be paid at the rate of no less than one and one-half times an employee’s regular rate of pay for work performed beyond 8 hours in a day or 40 hours in a week. Furthermore, work performed beyond 12 hours in a day is to be compensated at twice the regular rate of pay (Labor Code §510).
3. Defines a private school teacher as an employee who primarily imparts knowledge to pupils by teaching, instructing, or lecturing, and customarily and regularly exercises discretion and independent judgment in performing the duties of a teacher (Labor Code §515.8).
4. Requires that in order to be exempt from overtime, private school teachers at an elementary or secondary institution must make, on and after July 1, 2017, the greater of either:
   1. 100 percent of the lowest salary for their position offered by any school district in the state.
   2. 70 percent of the lowest salary offered for their position by the school district or county in which their private elementary or secondary institution is located.

(Labor Code §515.8)

This Bill

1. Creates a minimum salary standard that part-time private school teachers must be paid in order to classify them as exempt employees. These employees must be paid whatever percentage of a full-time salary that corresponds to the percentage of a full-time schedule that the teacher worked.
2. Specifies that this minimum salary standard for part-time private school teachers is calculated using the same conditions for determining full-time salary. Namely, that in order to be exempt from overtime, private school teachers must make, on and after July 1, 2017, a proportional percentage of the amount of the full-time schedule they worked that is the greater of either:
   1. 100 percent of the lowest salary for their position offered by any school district in the state.
   2. 70 percent of the lowest salary offered for their position by the school district or county in which their private institution is located.
3. Identifies that in the above salary standard conditions “county” means “county office of education.”
4. States that when budgeting for compensation and contracts for teachers, private elementary or secondary schools may use the public school salary schedules from the previous 12 months prior to the start of the school year in order to determine their own salary standards for private school teachers.

COMMENTS

1. Need for this bill?

According to the author, SB 621 is a clean-up bill that removes ambiguity in the law in order to ensure that part-time teachers in private schools receive fair compensation. Last year AB 2230 (Chu), which passed without opposition, established a new earnings standard for designating private school teachers as exempt employees. However, the author feels that there is uncertainty regarding the status of part-time private school teachers whose pay standards are not justly accounted for under existing statute. The author believes that SB 621 will clear up issues with current law in order to provide satisfactory and consistent compensation for both part-time and full-time employees. Additionally, the author states that SB 621’s language is the product of negotiations between private schools and teachers unions.

2. Proponent Arguments:

Proponents contend that SB 621 assures that part-time teachers are equitably recognized by requiring that they earn the proportional amount of a full-time salary of the instructional schedule for which they are employed. They state that while the great majority of private school teachers are employed on a full-time basis, many teachers of elective and/or specialty subjects (e.g., Japanese, photography, marine biology, etc.) hold part-time positions for which current law makes no provision. Proponents argue that SB 621’s proportionality provision offers a reasonable and straightforward remedy to this problem.

Finally, proponents state that private school administrators routinely prepare budgets and execute teacher contracts for a coming school year at times when public school salary schedules for the next school year are unavailable. They believe that SB 621 fixes this problem by permitting the use of salary schedule figures in effect up to 12 months prior to a new school year for purposes of determining salary thresholds for exempt private school teachers. Proponents state that ensuring a well-prepared and exceptionally effective Pre-Kindergarten through12th-Grade teaching force is a service to all California's students, and a top education priority.

3. Opponent Arguments:

None received.

4. Prior Legislation:

AB 2230 (Chu), Chapter 314, Statutes of 2016 created a new private school teacher overtime exemption that is a salary standard tied to comparable public school teacher salaries, rather than the state minimum wage.

AB 2613 (Mullin), Chapter 159, Statutes of 2006 created the previous private school teacher overtime exemption with a salary standard based on the state’s minimum wage.

SUPPORT

California Association of Private School Organizations

California Catholic Conference

OPPOSITION

None on file.

-- END --