On July 10, 2023, Governor Newsom signed Assembly Bill 102 (“AB 102”), amending the Budget Act of 2023. Buried in this seemingly innocuous appropriations bill is a provision that could mean more burdensome wage and hour regulations for employers in the future.
AB 102 appropriates $3M for the currently defunct Industrial Welfare Commission (“IWC”). The IWC was originally a five-member commission within the Department of Industrial Relations, tasked with regulating wages, hours, and the working conditions of California laborers. When active, the IWC issued “Wage Orders” that applied to specific industries or occupations. Most California businesses and employers are intimately familiar with the requirements of their industries governing Wage Order, as each order sets forth regulations, including those pertaining to minimum wage, overtime, exempt employee classifications, and meal and rest periods. Nearly two decades ago, the California legislature defunded the IWC. The Wage Orders issued in 2001, though remaining in effect, have been largely unchanged, except with respect to the increasing minimum wage. With AB 102, the IWC will be resurrected, and the commission has been instructed to adopt new Wage Orders.
It is unlikely that any forthcoming revisions to California’s Wage Orders will provide relief to employers. AB 102 directs the IWC “to convene industry-specific wage boards and adopt orders specific to wages, hours, and working conditions in such industries, provided that...
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