March 1, 2000


of the
March 31, 2000


In accordance with the "Eight Hour-Day Restoration and Workplace Flexibility Act of 1999," commonly known as AB 60, as well as Labor Code Section 1181, the Industrial Welfare Commission (IWC) will be considering the adoption of amendments to Interim Wage Order 2000. A public hearing will therefore be held on March 31, 2000, in Sacramento, at the State Capitol, Room 4203, to consider amendments proposed by one or more of the commissioners. The meeting will commence at 10:00 a.m. Proposed language for the amendments is included in this notice.


1. Approval of Minutes

2. Consideration of and public comment on an amendment to replace language in Section 5(M) of the Interim Wage Order, regarding stable employees.

(a) Notwithstanding Labor Code §510, stable employees, as defined in subsection (c), engaged in the raising, feeding and management of racehorses by a trainer shall be subject to the same standards governing wages, hours, and conditions of labor as those established for employees in agricultural occupations, as set forth in Order 14, engaged in the raising, feeding, and management of other livestock, except as set forth in subsection (b).

(b) Notwithstanding the provisions of subsection (a), no stable employee eighteen (18) years of age or over or sixteen (16) or seventeen (17) years of age shall be employed more than ten (10) hours in any workday or fifty-six (56) hours in any workweek unless the employee receives one and one-half (1 ) times such employee's regular rate of pay for every hour in excess of ten (10) hours in any workday or fifty-six (56) hours in any workweek.

(c) For the purposes of this section:

(1) "Stable employees" includes, but is not limited to, grooms, hotwalkers, exercise workers, and any other employees engaged in the raising, feeding, or management of racehorses, employed by a trainer at a racetrack or other nonfarm training facility.

(2) "Trainer" has the same definition as in Section 24001 of the Food and Agriculture Code.

(3) "Workday" and "Workweek" have the same definition as is used in Order 14.

(4) "Regular rate of pay" includes all wages paid by the trainer to the stable employee for a workweek of not more than 56 hours, but excludes those amounts excluded from regular rate of pay by Section 7(e) of the Fair Labor Standards Act (29 U.S.C. Section 207(e)), and excludes the payment of the stable employee's share, if any, of the purse of a race, whether that share is paid by the owner of the racehorse or by the trainer.

(5) This section shall remain in effect until June 30, 2001.

3. Consideration of and public comment on an amendment to Section 1 of Interim Wage Order 2000 to include a revised definition of an "Outside Salesperson."

Proposal to amend the definition of "Outside Salesperson" in every wage order:

"Outside Salesperson" means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer's place of business, who is paid on a salary or commission basis and who is primarily engaged in sales related duties such as selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities. Delivery related duties such as loading and unloading of motor vehicles, driving to and from locations, stocking shelves, refilling orders for preset volumes of products or services, arranging and cleaning displays, and removing empty containers shall not be considered "sales related" duties within the meaning of this definition.

Discussion of this agenda item will be limited to one hour.

4. Pursuant to Labor Code § 515(a), consideration of and public comment on an amendment to Section 3 of the Interim Wage Order, regarding the duties that meet the test of the exemption for executive, administrative and professional employees.

"Managerial" work is any type of work, whether mental or physical, that is performed for the purpose of, or in connection with, directing, supervising and monitoring business operations, evaluating business performance, or handling customer relations.

Examples of duties that constitute managerial work include, without limitation:

Interviewing, selecting, and training employees; setting and adjusting pay rates and work hours; directing and monitoring the work of subordinates; demonstrating for the benefit of subordinates how to perform service and production tasks; keeping production records of subordinates for use in supervision, evaluating employees' performance, efficiency and productivity; resolving employees' complaints and grievances; counseling and disciplining employees; planning the work, determining the techniques to be used in doing the work, and distributing the work; deciding on types of materials, supplies, machinery and tools to be used or merchandize to be bought, stocked, and sold; controlling the flow and distribution of merchandise, materials, goods and supplies; providing for the safety of customers, employees and property; resolving customer complaints; ensuring customer satisfaction; and performing emergency maintenance or repairs.

The time devoted by an employee to these and any other managerial duties is exempt time for purposes of determining whether that employee is primarily engaged in managerial work even if that employee is simultaneously performing other tasks, such as production work, that might be characterized as non-exempt.

An employee who is in charge of an independent or physically separate branch establishment department or business unit shall be presumed to be primarily engaged in managerial work for purposes of the overtime exemption under this Section.

Discussion of this agenda item will be limited to one hour.

5. Consideration of and public comment on the issue of whether employees who receive a certain base wage that is higher than the current minimum wage, as well as additional compensation, should be exempt from overtime pay requirements. The following language has been proposed:

The obligation to pay overtime after 8 hours in a day shall not apply to any employee during that period of time that is used to determine the employee's eligibility to:

Receive additional compensation for service or performance, IF the employee receives a base income or hourly wage that is equal to or greater than 2.5 times the state's current minimum wage for full-time employment.

Any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate of pay for an employee.

Any work in excess of 8 hours on the 7th consecutive day of work within the same workweek shall be compensated at the rate of no less than twice the regular rate of pay for an employee.

The payment of overtime is applied to all work beyond 40 hours in a workweek, consistent with the Fair Labor Standards Act.

"Additional compensation" includes discretionary and non-discretionary sums paid in addition to an employee's regular hourly rate which is tied to the financial success of the company or employee performance. These sums may include: stock options, profit sharing plans, bonuses or variable pay, any of which are based on company success or employee performance. "Additional compensation" does not include payments that are part of an employee's base wage. In order to qualify as additional compensation, at least half of the employees who potentially qualify for additional compensation under the terms of the plan must receive such compensation in accordance with the terms of the plan.

The above proposed language does not reflect the official position of the IWC. Rather, it is intended to be a starting point for discussion, which will be limited to two hours, for proponents and opponents of such an exemption. The discussion time will be divided equally.

6. Consideration of and public comment on convening a wage board regarding the minimum wage, pursuant to Labor Code § 1178.5(a).

7. The appointment of members to the wage board for construction, mining, drilling, and logging, as defined in the Interim Wage Order, pursuant to Labor Code §§ 1178.5(b) and 1179. Names may be submitted to the IWC until March 15, 2000.

8. The appointment of members to the wage board for computer professionals, in accordance with Labor Code §§ 1178.5(b) and 1179. Names may be submitted to the IWC until March 20, 2000.

9. Any further business that may come before the commission.

In order for the IWC to provide an opportunity for those interested in speaking at the public hearing, the amount of time within which each speaker will be allowed to address the IWC may be limited. Accordingly, the public is urged to submit written statements to the IWC regarding items on the agenda in advance of the hearing. The IWC may by a majority vote of commissioners when a quorum is present, approve amendment(s) to the Interim Wage Order, including an effective date for the amendment(s), along with a statement as to the basis and a summary.

For further information, contact Andrew R. Baron, Executive Officer, or other staff members of the IWC, at (916) 322-0167.



Chuck Center, Chair
Doug Bosco, Commissioner
Barry Broad, Commissioner
Leslee Coleman, Commissioner
Bill Dombrowski, Commissioner