Change to wage board for wage order 5 - March 12, 2003

Pursuant to Labor Code sections 1173, 1178, and 1178.5, the Industrial Welfare Commission (hereafter "IWC") conducted an investigation into the wages, hours, and working conditions of workers employed as direct caregivers in 24 hour care facilities for the elderly, adult mentally disabled persons, and adult developmentally disabled adults. At the completion of its investigation, the Commissioners met on February 7, 2003, and voted 4-0 to convene a wage board to consider whether certain provisions of Wage Order 5 regarding daily overtime and "sleep time" may be prejudicial to the health, safety, and welfare of these employees. The wage board shall be composed of an equal number of employee representatives and employer representatives, and a non-voting chairperson.

Prior to 1998, Wage Order 5-89 (as amended in 1993), allowed employees of twenty-four hour care facilities for adults and juveniles to work a 54 hour, six day week without paying overtime, either daily or weekly. In emergency situations, these employees were allowed to work more than 54 hours and six days in a single week, provided they were paid overtime for all hours over 54

at the rate of one and one half times the employees’ normal rate of pay. However, if the employees were required too work more than a 54 hour or six day week in non emergency situations, they were required to pay daily overtime for every hour worked in excess of eight hours at the rate of one and one half times the employees’ normal rate of pay; that is, they lost the exemption for daily overtime. In 1998, The IWC passed amendments to Wage Order 5 that required employees in 24 hour care facilities to pay caregivers overtime for all hours in a single week over 40 hours, thus comporting Wage Order 5 to the federal standard for overtime. Daily overtime was not required within the 40 hour week.

In 1999, under the "Eight-Hour Day Restoration Act" (commonly referred to as A.B. 60), the legislature restored daily overtime in general. The legislature temporarily restored the provisions of Wage Order 5-89 until the IWC could pass new regulations (effective October 1, 2000), to implement A.B. 60.

Under Wage Order 5 as it now reads, the employees in question have lost their exemption from daily overtime, and employers are bound by the eight hour day and 40 hour, 6 day week standards of A.B. 60 when computing overtime.

In 2001, the IWC convened a wage board which was charged with the duty, in part, of considering whether to amend Wage Order 5 to exempt employees of 24 hour care facilities for children under 18 years of age who provide direct care to the children, from overtime requirements of Wage Order 5. Among other things, petitioners were requesting a return to the 54 hour week, to be exempt from daily overtime, and to have "sleep time" not to be considered time worked.

At the completion of the Wage Board process, the Wage Board returned to the IWC their recommendation for amendments to Wage Order 5, unanimously voted upon. At a meeting on October 29, 2001, the IWC voted to pass amendments submitted by way of the unanimous vote of the Wage Board. The amendments that relate to overtime and sleep time read as follows:

(2) Employees with direct responsibility for children who are under 18 years of age or who are not emancipated from the foster care system and who, in either case, are receiving 24 hour residential care, may, without violating any provision of this section, be compensated as follows:

(a) An employee who works in excess of 40 hours in a workweek shall be compensated at one and one-half (1-1/2) times the employee’s regular rate of pay for all hours over 40 hours in the workweek.

>(b) An employee shall be compensated at two (2) times the employee’s regular rate of pay for all hours in excess of 48 hours in the workweek .

>(c) An employee shall be compensated at two (2) times the employee’s regular rate of pay for all hours in excess of 16 in a workday.

>(d) No employee shall work more than 24 consecutive hours until said employee receives not less than eight (8) consecutive hours off-duty immediately following 24 consecutive hours of work. Time spent sleeping shall not be considered hours worked.

Petitioners have stated in a letter dated February 7, 2003, that "However, new amendments need to address inclusion of the adult homes (developmentally disabled persons and mentally dependent adults), and facilities for the elderly in the overtime pay and sleep time exemption, along with clarification regarding pay for weekend and relief persons." Letter of Feb. 7, 2003 from Lonnie Nolta, Residential Care Society Consultant).

The petitioners originally brought their concerns to the IWC at a meeting on June 10, 2002. They contend that they were not aware that they would be excluded from the amendments to Wage Order 5 and were shocked to discover that they were excluded. The chair recommended that the petitioners meet with the representatives of Service Employees International Union, who had been integrally involved with the new amendments, and who had helped craft the amendments restricted to care providers for children under 18.

The chair, Mr. Dombrowski, suggested that the petitioners needed to gain the support of the parties who had successfully enabled the prior amendments to be unanimously recommended to the IWC in favor of exemptions for a specific group of employees that did not encompass petitioners. Mr. Dombrowski further recommended that the petitioners withdraw their petition until such meetings were held, and petitioners complied with his recommendation.

Commissioner Bosco volunteered his services to facilitate several meetings held between June 2002 and January 2003. Although a consensus has not been reached, Commissioner Bosco reported to the IWC that progress was being made, and he suggested that a petition be presented again to the IWC, and that a vote be taken on whether to convene a Wage Board. All parties have agreed that during the Wage Board process, meetings outside of the process would continue in an effort to reach solutions.

In testimony before the IWC, and at the meetings facilitated by Commissioner Bosco, all parties have recognized the seriousness of the financial problems of care facilities. All parties recognize that the group facilities perform an essential service in a compassionate manner. However, the participants differ on the ways to solve the problems. Group home employers want exemptions from wages, hours, and conditions in order to be able to keep afloat financially. Union representatives want a reorganization of the system that provides funding and oversight to the group homes at the state level, and for the residential group homeowners and operators to unite in order to more effectively lobby for more funding. Testimony relating to these issues has been given during eight meetings of the IWC beginning on January 9, 2001, and ending on February 7, 2003, and transcripts of these meetings will be provided to the members of the Wage Board in advance of their first meeting.

In response to petitioners, the IWC charges you to consider all materials provided to you for review, and after your review to report to the IWC your recommendations on the following matters:

1. Whether the amendments to Wage Order 5 (which appear on page 2 of this document) passed by the IWC on October 29, 2001, should be further amended to include the petitioners, i.e., employees of 24 hour care facilities for the elderly, the developmentally disabled adults, and the mentally dependent adults.

2. Whether any and/or all amendments agreed upon by the Wage Board may or should be limited in their duration. facilities of a certain size).

3. Whether the size of the residential group homes for the elderly, the developmentally disabled adults, and the mentally dependent adults (number of beds in facility as per licensing by the state) should affect or restrict the scope of any exemptions proposed by the Wage Board (i.e., to restrict the application to residential care facilities of a certain size).

Title 8, California Code of Regulations, section 11534, provides in part that the wage board shall consider such data as is submitted to it by the IWC, and that any additional information necessary to the deliberations of the wage board shall be furnished by the IWC upon request of the chairperson of the wage board, insofar as is feasible. The information provided by the IWC will include transcripts of testimony and other documents presented to the IWC. The IWC requests that the wage board review these materials prior to its first meeting.