STATE OF CALIFORNIA

DEPARTMENT OF INDUSTRIAL RELATIONS

INDUSTRIAL WELFARE COMMISSION

Public Meeting

January 9, 2001

State Capitol, Room 112

Sacramento, California

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BILL DOMBROWSKI, Chair

DOUG BOSCO (arr. 10:08 a.m.)

BARRY BROAD

LESLEE COLEMAN

HAROLD ROSE

ANDREW R. BARON, Executive Officer

MARGUERITE C. STRICKLIN, Legal Counsel

DOUG McCONKIE, Analyst

TRACI PILGRIM, Analyst

NIKKI VERETT, Analyst

Page

Proceedings 4

Approval of Minutes 4

Appointment of Wage Board for Sheepherders and Charge 4

Name Change for Interim Wage Order 2000 6

JULIANNE BROYLES, California Chamber of Commerce 7

Further Business

STEVE ISRAEL, West States 10

DAVE HELMSIN, California Alliance of Child and 20

Family Services

JENNIFER SNYDER, California Alliance of Child and 25

Family Service

ALLEN DAVENPORT, Service Employees International 28

Union

TOM RANKIN, California Labor Federation, AFL-CIO 29

Adjournment 35

Certificate of Reporter/Transcriber 36

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(Time noted: 10:02 a.m.)

COMMISSIONER DOMBROWSKI: All right. Why don't we get started?

I call the meeting to order. Let the record show Commissioners Rose, Broad, Coleman, and Dombrowski present.

I would ask those who intend to speak to fill in a card, please, because I only have one card under the "Other Business" category.

The first item on the agenda is the approval of the minutes.

Do I have a motion?

COMMISSIONER ROSE: I move the minutes be approved as presented.

COMMISSIONER DOMBROWSKI: Second?

COMMISSIONER COLEMAN: Second.

COMMISSIONER DOMBROWSKI: All in favor, say "aye."

(Chorus of ayes)

COMMISSIONER DOMBROWSKI: Next item on the agenda, consideration of the appointment of members and the charge for a wage board established to review wages, hours, and working conditions of sheepherders.

Let's see. Commissioner Broad, I believe you have a list for the employee side.

COMMISSIONER BROAD: Yes. This is for five members and two alternates. The five members would be Tom Rankin, Rosalinda Guillen, Chris Schneider, Victor Flores, Mark Schacht. The two alternates would be Heraclio Astete and Cynthia Rice.

COMMISSIONER DOMBROWSKI: Okay. On the employer

-- on the employer side, I have Dominic -- and I'm going to screw this one up -- Minaberrigarai, M-i-n-a-b-e-r-r-i-g-a-r-a-i; Dennis Richards; Raymond Talbott; Tim Indart; and Richard Hamilton. And the alternates, I have George Soares and James Holt.

COMMISSIONER BROAD: Mr. Chairman, I'd like to move the adoption of those wage board appointees.

COMMISSIONER DOMBROWSKI: Okay.

COMMISSIONER ROSE: Second.

COMMISSIONER DOMBROWSKI: Second. All in favor, say "aye."

(Chorus of ayes)

COMMISSIONER DOMBROWSKI: It's adopted.

COMMISSIONER ROSE: Mr. Chairman?

COMMISSIONER DOMBROWSKI: Go ahead, Harold.

COMMISSIONER ROSE: I would like to also encourage both sides to make sure that their people show up. It's really important when we have a wage board if we don't have a proper amount of people.

COMMISSIONER DOMBROWSKI: Right.

COMMISSIONER ROSE: That's why we put the alternates in there.

COMMISSIONER DOMBROWSKI: Okay. And we'll leave it up to our executive director to handle the notification on the -- on the setting of the next meeting of that wage board.

The charge?

COMMISSIONER BROAD: The charge?

COMMISSIONER DOMBROWSKI: Barry.

COMMISSIONER BROAD: Mr. Chairman, I'd like to move the adoption of the charge to the sheepherding wage board that you -- that is in our packets.

COMMISSIONER DOMBROWSKI: Okay. Second?

COMMISSIONER ROSE: Second.

COMMISSIONER DOMBROWSKI: All in favor, say "aye."

(Chorus of ayes)

COMMISSIONER DOMBROWSKI: That's adopted.

Nothing else on sheepherders, I believe, for today.

Next item on the agenda is consideration of name change for "Interim Wage Order 2000" to "Wage Order 17 - Regulating Miscellaneous Employees."

Again, could I have a motion? Any comment?

Barry, do you have comments?

COMMISSIONER BROAD: Yes. Is there any testimony?

COMMISSIONER DOMBROWSKI: Not that I see.

COMMISSIONER BROAD: Okay. Then I would support the idea of renaming the interim wage order to become the "Wage Order 17 - Regulating Miscellaneous Employees." There has in the past been some legal debate about whether Order 4 covers all employees that would not be covered by any other wage order. And there has been some litigation over the issue. And insofar as the Interim Wage Order 2000 was created in an effort to cover all those employees with the provisions of AB 60 that covered all employees in the state, that it would be appropriate to make this wage order the catch-all wage order for any other employees that would not be covered by any other wage order and would put a sort of final conclusion to any debate about whether there's such a person as a worker who is not regulated by the provisions of our wage orders. And since AB 60, by its own terms, covers all employees, I think this would be an appropriate change.

So I would make that motion.

COMMISSIONER DOMBROWSKI: All right.

Julie?

MS. BROYLES: Just a question, procedurally-wise. For this particular wage order, since it's becoming a new wage order, is there any other requirements for any other further hearings, just this format?

MS. STRICKLIN: This is just a name change. MS. BROYLES: Just a name change.

MS. STRICKLIN: The order has already been in place, so --

MS. BROYLES: So there won't be notice to -- or a listing of any of the other industries that would be now --

COMMISSIONER DOMBROWSKI: This is the miscellaneous -- miscellaneous, just --

MS. BROYLES: Just the miscellaneous. So it would be like for public employees and all the other ones that are not specifically named?

COMMISSIONER BROAD: No.

COMMISSIONER DOMBROWSKI: No.

MS. BROYLES: No?

COMMISSIONER BROAD: Actually, no, because public employees would be -- would be covered by each wage order in which they are classified. So a public employee farm worker would be in Order 14, and a public employee truck driver would be Order 9. But they are then perhaps in those wage orders -- there may be an exemption that applies to them. But they are already covered.

We would really be dealing with occupations that are not covered by any other wage order.

MS. BROYLES: Okay.

COMMISSIONER BROAD: It's not -- there may not be very many of those people there, but that issue has come up in the past. And at this point, it would mean that it would be very clear that if you could say, "Well, they're not covered by any other wage order or industry -- you know, occupation or industry" --

MS. BROYLES: This is where they are covered.

COMMISSIONER BROAD: -- this is where they're covered.

MS. BROYLES: Okay. So that would also be true for emerging -- for emerging job classifications, that if there isn't any specific wage order, they would fall underneath this new miscellaneous employee.

COMMISSIONER BROAD: Right. If you could say that it's not within the transportation industry or the mercantile industry, but it's something altogether new that couldn't be identified as belonging in any other wage order, they would be in this wage order.

MS. BROYLES: Thank you.

COMMISSIONER DOMBROWSKI: Any other comments?

(No response)

COMMISSIONER DOMBROWSKI: Okay. Did I hear a motion?

COMMISSIONER BROAD: Motion, yes.

COMMISSIONER DOMBROWSKI: Is there a second?

COMMISSIONER ROSE: Second.

COMMISSIONER DOMBROWSKI: Okay. All in favor, say "aye."

(Chorus of ayes)

COMMISSIONER DOMBROWSKI: Okay. That motion passes.

Fourth item, any further business. I have a card from Steve Israel.

If you could identify yourself and your issue --

MR. ISRAEL: Yes. My name is Steve Israel. I'm president of West States, a truck equipment manufacturing corporation in Woodland. We do a lot of work for the state.

I'm here because my human resource person wanted me to be here. And it's in regard to -- and it is an important issue -- we have -- I became president in May, approximately, and prior to me becoming president, we have an issue -- and I know that there are some other companies that might fall into this same issue, where they've been following Order Number 1, and most specifically, "Uniforms and Equipment," as it relates to two times the minimum wage if the employees supply their own tools.

And I've tried to get some information out of the hearings that have gone past us, I guess, in regards to this issue. And the prior president, prior to me -- and again, I -- I want to make it clear that there might be some other companies that you'd want to consider this situation that has come up -- our -- our -- our employees -- and I wish -- I forgot my visual aid, and it is a toolbox that you can carry with your hand that equates to about $400 worth of tools. And they all come with a lifetime warranty, okay, so there is not maintenance that is required for these tools.

But if you take our industry standard wage, or, I should say, our industry average wage, it's approximately $9 an hour. And if you -- if you supply $400 worth of tools, for our industry -- again, with a lifetime warranty -- we are required to pay, in the 2000 order, two times $5.75, which takes you to $11.50. We do pay $11.50. Again, our industry average is $9 per hour.

Now we've moved forward, okay, but at $11.50, okay, versus our $9 -- and I have some of these that I can hand out, if you'd like them later -- if you took the $9, which is the average for the industry -- and we are paying $11, per the wage order -- what that equates to is, at the end of the year, you have a $5,750 excess of what is the industry standard.

Again, the tools only cost $400, and they come with a lifetime warranty. So the excess of the $400 means that you can buy 14 sets of tools. Well, now I know what you're saying: you're saying, "Well, why don't you just buy the tools?" Okay. That is what we are going to do, because of the increase in the wage this year and next year. But that's what I have to do because we're caught.

There are other people, okay. There are other people that probably have more tools required. There are other people in the other industries that have less tools required.

But I guess the point is, is once the tools are paid for, I guess the -- what is -- what was the intent of two times the minimum wage? Was it to allow them to continue to purchase tools? Was it to maintain the tools? Does anybody know that answer? I've tried to ask that question legally. I've requested, through the legal side of the --

COMMISSIONER DOMBROWSKI: Go ahead, Barry.

COMMISSIONER BROAD: Well, I -- I believe, generally, it's so that this doesn't affect low-wage workers, that low-wage workers cannot be required by their employers, in any -- in any case, to purchase the tools necessary to perform the job.

MR. ISRAEL: Okay. So the avenue that we are going to take is the proper avenue, just buy them their tools.

COMMISSIONER BROAD: Yes. That's what -- it sounds to me as though that would be the appropriate thing to do if they earn less than two times the minimum wage.

MR. ISRAEL: Well, they -- they -- they --

COMMISSIONER BROAD: In fact, you have to do that.

MR. ISRAEL: Right. We'll hold them where they are and buy the tools.

COMMISSIONER BROAD: And you do have to understand that this is a very limited exception to the general rule that employers need to require all the tools that are necessary to perform a job. You wouldn't, for example, conceive of a situation in which a clerical employee would be required to buy a personal computer to use at the office. The employer buys that computer, and that computer is -- you know, could be very costly, but it's the employer's requirement -- requirement on the employer to generally pay for the costs of doing business.

MR. ISRAEL: So the definition of "tools" in this case is anything to do the job.

COMMISSIONER BROAD: No. In fact, if you look at the Statement of Basis to the wage orders, it makes it clear that these are hand tools that are used in a recognized trade or craft. So it doesn't include power -- it's a very limited exception. It doesn't include power tools, and it only includes hand tools and equipment like the toolbox that might be necessary to secure those tools. But it doesn't include -- you know, you couldn't require someone to purchase a truck, for example --

MR. ISRAEL: Right.

COMMISSIONER BROAD: -- as a tool of their job.

MR. ISRAEL: Okay. So hand -- you're saying that hand tools are exempt?

COMMISSIONER BROAD: Well, I don't -- I'm not -- you should probably read the regulation and read the Statement of Basis that we adopted --

MR. ISRAEL: Okay.

COMMISSIONER BROAD: -- when we adopted it, and it will make it clear to you. I don't -- I'm not exactly certain what your question is, so I don't want to answer it incorrectly.

MR. ISRAEL: Correct. I understand.

Okay. Thank you very much.

COMMISSIONER BOSCO: Could I ask a question? What was your practice before this? I mean, what would you prefer to do, or what did you do before this with the tools?

MR. ISRAEL: Before, what we did was they supplied their tools. There are a lot of people in our industry that, I would say, don't know that this exists. I would say that there are hundreds, if not thousands, of people in related industries that don't know this exists and are not, you know, abiding by it, probably tens of thousands in the state.

COMMISSIONER BOSCO: So you're saying before this wage order went into effect, that you required your employees to buy their own tools, and that was that?

MR. ISRAEL: Hand tools.

COMMISSIONER BOSCO: Hand tools. And you did not provide them those tools, nor did you pay attention to where they got them or how they got them, but they were required to have them on the job.

MR. ISRAEL: Right. They had -- there was a required tool list. That's correct. And what we've done in the past is we supplied them the tools if they -- you know, we had the toolbox, you know, with the -- it had the required tools. Again, $400 or less. And if they could not afford the tools, after the 90 days, the grace period, then we gave them the tools and deducted it from their paycheck at a very nominal -- you know, until they paid for the tools.

Again, an opportunity. So these are people that are learning the trade. They are not apprentices. They are not, you know, journeymen. These -- they know nothing when they come in, and we're teaching them the trade. So, you know, they're making a very good wage at the start, so -- but again, there are probably thousands of companies in our industry --

COMMISSIONER DOMBROWSKI: Andy, you have some historical --

MR. BARON: Just to be -- just to be clear in terms of actions by the Commission, with all that was done in terms of revamping the wage orders, this is one area where this Commission did not act. And the policy here he is describing has been the policy in the wage orders. We did nothing new here.

MR. ISRAEL: Right.

MR. BARON: The only -- the only thing you could say that is new is that because it's tied in to minimum wage, and we raised the minimum wage, so the fact that the policy says two times the minimum wage makes it a bit higher. But the policy here relative to in order to provide -- in order to have employees have to provide a limited array of tools, that policy has been in effect for a while. That issue did not even -- we didn't even go there during -- during our deliberations, be they, you know, relative to 60 or be they separately.

COMMISSIONER BOSCO: I recall having some discussion of it, but I, you know, don't remember too much about that.

We're just saying because the minimum wage went up, it's probably going to -- the ripple effect of this

is --

MR. ISRAEL: Right. The minimum wage goes up 50 cents, and this goes up a dollar. Minimum wage goes up 50 cents next January, again it goes up a dollar. So it's a -- it's a large effect, you know, especially if tools are already paid for, time and time and time and time and time again, if you want to look at it that way. I don't know if you see it the way I'm looking at it, the difference --

COMMISSIONER BOSCO: No, I think we can all understand what you're saying.

MR. ISRAEL: Right.

COMMISSIONER ROSE: I believe what you're saying is it's paid for one year, and then the next year they still have the same toolbox and you have to pay the double --

MR. ISRAEL: And you have to keep paying --

COMMISSIONER ROSE: -- to pay these guys.

MR. ISRAEL: -- the two times the minimum wage. You know, what are we paying for, is that's -- that's -- you know, when the industry standard for wages is $9 and you keep going up a dollar every year because they're supplying tools that has already been supplied, you know, basically, has already been supplied and paid for.

COMMISSIONER BROAD: Yeah, but the remedy for a violation of this is -- it is to pay for the tools.

MR. ISRAEL: Right.

COMMISSIONER BROAD: So, you know, if you want to pay them, you know, 40 cents above the minimum wage, if you want to pay them the minimum wage, you buy them the $400 worth of tools.

MR. ISRAEL: Right.

COMMISSIONER BROAD: And I -- I mean, this has been the rule, I believe, for something like fifty years.

MR. ISRAEL: Right.

COMMISSIONER BROAD: I mean, this is not -- this is nothing new, and it shouldn't be a surprise to any employer. And if there is massive violations of this, then that's pretty sad, after fifty years.

MR. ISRAEL: I would say that there are massive violations of this. And I am here to tell you that I am not ignoring it, because I have some very smart employees, okay, where the people that are massively ignoring it, I guess, do not have employees that read things, you know, especially the postings that are supposed to be at every company, which probably are ignored as well. So -- but I do have employees that read it, and I have people -- I have employees that probably feed on the rippling effect.

Now, there -- what are the rippling effects, okay, throughout the company? You have -- let's say you had -- you're paying somebody $11.50. Okay, here's a rippling effect, and it's -- you're paying somebody $11.50, okay, per last year, and you have somebody that is at $12. Then there are maybe a year or two more, a little bit more seniority, and now this kicks in because -- if you're following it, okay -- because they're supplying their own tools. And now the person that just signed up with the company is making $12.50. Well, really, what do you have to do? You have to take the other guy to $12.50, and he has seniority. So do you have to give him a dollar or two? Yeah, I guess you do, to be fair.

COMMISSIONER BROAD: Well, as someone who's in business for myself, if I reached the conclusion that I -- it was going to cost me $100,000 to save $400 --

MR. ISRAEL: Right.

COMMISSIONER BROAD: -- I'd probably just go buy the tools.

MR. ISRAEL: And that's correct. We have a rippling effect from that as well.

COMMISSIONER BOSCO: What type of tools do they use in your --

(Laughter)

MR. ISRAEL: You have a rippling effect as -- you have a rippling effect as well, though, by -- by the statement that you just made, and that is, they've been -- you've been operating under a certain premise, okay, you've been following the guidelines of the rule, and now you have employees that think that they deserve that other dollar now. So you might lose some employees.

Again, yes, we're running a business. That's right.

COMMISSIONER BOSCO: Sort of, "Here's your toolbox; now we're taking a couple dollars off your pay," right?

MR. ISRAEL: That -- exactly. Exactly. "Why do we have to change?" will be the question. That's right.

So, okay. I understand where you're coming from. I'm here to at least, you know, share with you what is going on out there, though. I mean, that is your interest, right? That's what's going on.

COMMISSIONER DOMBROWSKI: Thank you. It might be helpful if you -- it's up to you -- if you want to send just a brief letter to the Commission to get your position -- you're on the record already, but to get your position in writing that we can look at.

MR. ISRAEL: Sure.

COMMISSIONER DOMBROWSKI: Okay. Thank you.

MR. ISRAEL: Who should I send that to? Whose attention?

COMMISSIONER DOMBROWSKI: Just send it to my attention at the IWC.

MR. ISRAEL: Thank you.

COMMISSIONER DOMBROWSKI: Dave Helmsin and Jennifer Snyder.

MR. HELMSIN: Good morning, Mr. Commissioner, members. I'm Dave Helmsin, and this is Jennifer Snyder. We represent the California Alliance of Child and Family Services, which, in turns, represents foster care, foster family agencies, and adoption agencies in California.

We are here to ask you to put on next month's agenda our formal request for a wage board to relook at Wage Order 5 as it relates to the payment of overtime for group homes serving children, 24-hour care, and as it relates to meal periods and rest periods in the group home setting for both foster care children, homes with developmentally disabled, and residential care.

These -- these types of care settings share one common characteristic, and that is that is that they're small, home-like environments where it is ideal, from a therapeutic sense, to provide longer shifts to simulate parenting for the individuals living in the home. And the whole industry is built around long shifts.

And when you reviewed Wage Order 5 in June, we were very grateful that you maintained the 8-hour exemption for these facilities. You also took reforming action to bring in the 40-hour federal workweek standard, and in so doing, because of the way that the work -- wage order was structured, we ended up with a 40-hour workweek that triggers -- anything in excess of 40 hours triggers going back to daily overtime. And that is not the way that the -- the exemption existed for many years prior to 1998 and, really, what we need to return to, to continue to provide care in this setting.

These are 100-percent government-funded nonprofit agencies, for the most part. And they have no ability in today's market, at today's government rates, to go out and recruit the numbers of workers necessary to go without the overtime, therapeutic issues aside, nor do they have the ability to pass it on to their -- their customers, because government's their customer, and there's a pretty elaborate rate process involved in picking up reimbursement in that area.

So we're caught in a dilemma here and we'd like you to take another look at it, and we'd like to bring it back to you next week -- or, excuse me -- next month.

I think that's it. We copied you on some correspondence that we sent back and forth to SEIU, and I've talked to most of you individually. I think you're familiar with the problem. We need a formal look at this.

COMMISSIONER DOMBROWSKI: Okay. Any questions?

COMMISSIONER BROAD: Yeah. What -- now, your proposal would be, or your request, is that we consider going to the federal standard for overtime?

MR. HELMSIN: No. We've always had the federal standard for overtime, where we pay time and a half after a 40-hour week. But what's happened is that in bringing the 40 hours into the existing wage order, they really pulled out an old standard, which said that we didn't pay daily overtime till you exceeded 54 hours a week. Then you revert to daily overtime. They just pulled the 54 out and put in the 40, which now the 40 doesn't just trigger time and a half on the workweek, it triggers you back to an 8-hour workday for every day in the week.

COMMISSIONER BROAD: And do you have an -- did you have an objection to having to pay daily overtime after 54 hours in a week?

MR. HELMSIN: No. That's the way we've operated for years, and we're comfortable with that.

COMMISSIONER BROAD: Okay. So what -- so the practical effect of what you want is that, let's say, someone works three 20-hour shifts, so they work 60 hours, that -- and in that situation, then, they would pay daily overtime because they would work over 54 hours, so that if they worked two 20-hour shifts and a 10-hour shift -- let's say they got to 50 hours -- at that point, you would be -- they would get 10 hours of overtime at time and a half, under your proposal.

MR. HELMSIN: Correct.

COMMISSIONER BROAD: But under current law, they would actually get some double time for having worked over 12 hours on a particular day.

MR. HELMSIN: They get time and a half and double time for a three-day period.

COMMISSIONER BROAD: Right, so that -- so when it -- when all -- when you boil it down to its essence, it really has to do with the double time after 12 part of our rule.

MR. HELMSIN: I believe that's correct.

COMMISSIONER BROAD: When you really get down to it, that's the - that's the difference. Okay.

And what is it that you want to do about meal periods and rest breaks?

MR. HELMSIN: We have a situation where, very often, particularly in the small group homes, once again, for foster care children, for homes for the developmentally disabled, and for residential care as well, where you've got a six-bed model, which is pretty much the standard across all those industries, you often have a single person responsible for the folks in the home. And on overnight sleeps, for example, you can't give a duty-free meal period in there that makes any sense. Also, once again, from the therapeutic sense, you're trying to simulate a home environment. Those -- it's ideal for those people to sit down and have meals with the people in the home. And it's worked without problems, to my knowledge, all these years in all those settings. And we believe that that's the flexibility that makes sense for finance as well as the employees and the operators in these homes.

COMMISSIONER BROAD: So what you're talking about is not eliminating meal periods. You want them to be an on-duty meal period.

MR. HELMSIN: Yeah. And, you know, as it works out practically, I mean, there -- if you're, you know, on a 12-hour shift overnight in a -- in a group home, you've got a fair amount of down time where you can rest, relax, you know, read, do what normal parents do in a home. So it's not like there isn't -- in our opinion, anyway -- and once again, we haven't had, over the years, problems with employees on these issues -- there is plenty of time to recharge, so to speak. But we can't have people leaving the premises or declaring -- you know, sort of hanging out an "out to lunch" sign when we have them responsible for five or six kids in the home.

COMMISSIONER BROAD: Now, we do have in our rules an on-duty meal period that is, you know, part of the rule and an option for employers and employees. Is there something wrong with that? Does that not work in some fashion?

MS. SNYDER: Jennifer Snyder.

The change, it's -- the most recent change that happened, that allows for somebody to opt out of an on-duty meal period, is the issue, without notice, so that the most recent change to -- to -- I think it was in Wage Order 5 -- it allows for somebody to opt out of an on-duty meal period, generally sometimes even the day of, if they like.

COMMISSIONER BROAD: Well, it has to be a mutual agreement. I believe that's always been the rule, but it -- so what -- so, really, the essence here is that you want to make that we won't be working in a system where people vote or give their consent to this or have some kind of an agreement. It'll be a requirement of the job.

MS. SNYDER: Per se, yeah. When you're hired, you know that part of your job would be an on-duty meal period, and you don't have that flexibility to decide the day of the work, at any point in time, to opt out, just because it is part of your job duty. That would be what we would ask for, or any type of leeway in the notice requirements would be an option, at least, you know, before the period that -- you know, the work period, something, you know, to where the employer and the employee can have some ability to work through the process.

But right now, at least the way we've interpreted it, they could, even the day of, decide that they don't want to -- they want to go to McDonald's that day for lunch, and then they're in big trouble.

COMMISSIONER BOSCO: Could I ask our counsel what the procedure would be here to make this change if we wanted to go ahead and do that?

MS. STRICKLIN: You would have to notice a hearing first, require an investigative hearing, and then, based on that information that you see, decide if you want to call a wage board on the issue, to reopen Wage Order 5 with regard to personal attendants.

COMMISSIONER BOSCO: So the next meeting -- at our next meeting, would we be able to empanel a wage board, or would we have to go one meeting past that?

MS. STRICKLIN: You would have to go one meeting past that.

COMMISSIONER BOSCO: Isn't there any way, when we do these wage orders, we can't leave some leeway that the Commission can make changes like this to account for what I think was a glitch in them? You know, I don't think any of us intended this effect.

MS. STRICKLIN: Well, the statutory requirements are that you have to have notice for hearings, and then you do also have to have at least one investigative hearing and then call a wage board. And that's required with the 30-day notices. So I don't think you can go back and fix something without meeting the statutory requirements.

COMMISSIONER BOSCO: So next week -- next month would be our investigatory hearing, investigative hearing, and then the following would be a wage board. And then how long do those things last? Three or four months?

MS. STRICKLIN: Well, it depends on how fast you can empanel a wage board and get the report back and then hold the three hearings that are necessary after that. It could be a while. You could hold three hearings within the same month, as we almost did with the last one, the minimum wage hearings, with two in September and one in October -- or one in September and --

COMMISSIONER BOSCO: Okay.

COMMISSIONER DOMBROWSKI: Thank you.

Mr. Davenport and Mr. Rankin.

I don't have any other cards from speakers, so if anyone has anything else they want to bring up, I want to get a card in.

Go ahead.

MR. DAVENPORT: Mr. Chairman and members of the Commission, the Service Employees International Union does represent people who work in these group homes, and we do have union contracts. Those contracts do have the 8-hour day. We think -- we don't know that -- as I mentioned in the letter to Mr. Dombrowski, that there are any undesirable outcomes for workers or children in these homes as a result of an 8-hour day.

We would also note that the industry, in addition to getting the special exemption from this Commission already, got from the state government last year a 13-percent increase in its rates, 3 percent of it across the board and 10 percent for wages.

I'm not -- you know, I don't have to be satisfied with that either, and I'd be perfectly willing to help work this out in another venue, in front of another part of the government, which I think is appropriate for a lot of these kinds of cases, that certainly the rate determination structure that we have to go through, Mr. Bosco, takes more than five meetings and more than five months, and none of us are very happy with that. But that -- those are supposed to be cost-based rates. And I would certainly go with Mr. Helmsin and Ms. Snyder to try to remedy that situation. I would prefer not to be spending your time working on these minutiae, which I think -- and these cost items -- which I think are more appropriate from the correct government. But, you know, it is your decision. We will be there.

MR. RANKIN: Tom Rankin, California Labor Federation.

I would just like to echo Mr. Davenport. Our standard is the 8-hour day, and we believe that most employers can work under that standard, including the ones involved here.

I'd just like to also point out, in terms of the question that was raised regarding meal and rest breaks, there is a provision in your wage orders, Mr. Bosco, that allows employers who feel that they're unduly burdened by meal and rest break requirements, they go to the Labor Commissioner, the Labor Commissioner investigates, and they can be granted an exemption through that process. It's taken care of in the wage orders.

COMMISSIONER DOMBROWSKI: Any questions?

(No response)

COMMISSIONER DOMBROWSKI: All right. We're going to put this on the agenda for the next meeting and notice it.

Before we conclude, I would like to take a moment to recognize our executive director, Mr. Andy Baron, who has decided to take another position within the state. Just from my heart, I want to thank him for everything he's done over the last year on AB 60 and the implementation. And I think the -- the way he has handled all the various interest groups and balanced everyone's concerns, presented all sides to the commissioners, not only in these hearings, but behind the scenes and the information, I think, was just a marvelous job.

And so, Andy, I just want to thank you for that and wish you -- wish you all the luck in the future.

COMMISSIONER BROAD: Mr. Chairman, I'd just like to say that I thought Andy did just a wonderful job. I mean, he had an unenviable task, which was to start a commission that had no staff, no institutional memory, therefore, in the face of a statutory requirement that the Commission undertake regulatory changes that were extraordinarily sweeping, and then, on top of that, have to deal with the minimum wage as well. Very few agencies do -- do as much as this Commission has been required to do and has done, ever, in a multi-year period of time, let alone in a year.

I believe that what most people out in the world

-- you know, they might disagree from one point or view or another with some of the things we've done, but I don't think anyone would say that the process by which we did what we did was not sort of the highest form of the way government ought to operate. No one who had an issue before this Commission -- and many people did over the course of the year -- was ever turned away, didn't feel like they had the ability to communicate with this Commission, its members, its executive director, or its staff.

And I think, as Andy moves on to other greater things, I'd like to personally say that I found that my relationship with him, you know, grew tremendously over the years. We knew each other in the past, never worked closely, but had to work very closely over many months on very complex issues. And I just commend him for having done an extraordinary job.

COMMISSIONER BOSCO: I want to echo those remarks. Shortly after I got appointed to this Commission, while I was still sorting out in my own mind what had happened to me, I received a call from Congressman Howard Berman, from Washington, who wanted me to pay special attention to Andy Baron, our executive director, because it was Howard's fear that -- I think, without putting words in his mouth -- that because the Commission is somewhat divided, at least ostensibly, between labor and management, that it might come to pass that I'd have to stand up and protect Andy's job. But -- but I must say that that has absolutely never happened because of Andy's personality. He is able to be fair.

I don't think anyone has any doubt where Andy's heart is in any number of these issues, and that's good, because we're human beings and you should have feelings about these things. But he has always been extremely fair to everyone, very informative, very accessible. And I -- this is the first I knew that Andy was leaving, so it's kind of a shock.

But we'll certainly miss you.

COMMISSIONER COLEMAN: To add to the voices of the choir, Andy -- Andy was great. Just in the first couple of weeks of being on the Commission, he made that long trek out to Silicon Valley and sat down and pored through the deepest parts of AB 60 and everything we needed to do. And I felt like he was a good teacher as well as an adviser to the Commission, and really did do an outstanding job of staying level-headed and staying unbiased, really, in helping us get through a lot of material in a very rapid amount of time.

So, thank you for all the work you've put into this, and good luck.

COMMISSIONER ROSE: I'd like to thank Andy. First of all, he tried to guide me through AB 60 -- totally lost me -- but I do appreciate all the input I had from him, and I appreciate his leadership and his staff, things that he got everybody to accomplish.

And you're leaving a good group of people, and I'm sure to replace him is going to be difficult.

Good luck, Andy.

MR. BARON: Thank you.

COMMISSIONER DOMBROWSKI: Before he gets a bigger head, can I have a motion to adjourn?

(Laughter)

MR. BARON: No, just a point of personal privilege -- so I always wanted to get a chance to do that.

(Laughter)

MR. BARON: I want to thank all of you for your kind words. I just really have mixed emotions. I believe that last year was truly a momentous year. I want to thank all of you for your cooperation. I want to thank the staff for all of their hard work and for putting up with me.

I want to make specific mention of Marguerite. She and I have just worked so closely. In some ways, it was about the toughest phone call I had to make, to tell her that I would be moving on.

So I -- I urge you on. I think, as you all know, I was determined to immerse myself deeply into all these issues. I remember Harold saying to me, when he first came on board, very shortly thereafter, he said, "You know, this seems to be more than a day a month." And I said, "Harold, you can spend as much time on this as there are minutes and hours in the day."

I will still be here in Sacramento. My office will only be seven blocks away. I look forward to keeping in touch with all of you.

And again, I wish you all luck.

COMMISSIONER ROSE: Move we adjourn.

COMMISSIONER DOMBROWSKI: Do I have a second?

COMMISSIONER BROAD: Second.

COMMISSIONER DOMBROWSKI: All in favor, say "aye."

(Chorus of ayes)

COMMISSIONER DOMBROWSKI: We are adjourned.

(Thereupon, at 10:44 a.m., the public

meeting was concluded.)

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CERTIFICATE OF REPORTER/TRANSCRIBER

--o0o--

I, Cynthia M. Judy, a duly designated reporter and transcriber, do hereby declare and certify under penalty of perjury under the laws of the State of California that I transcribed the tape recorded at the Public Meeting of the Industrial Welfare Commission, held on January 9, 2001, in Sacramento, California, and that the foregoing pages constitute a true, accurate, and complete transcription of the aforementioned tapes, to the best of my ability.

Dated: January 23, 2001 ______________________________

CYNTHIA M. JUDY

Reporter/Transcriber