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Friday, Sep 29, 2023




Orange County Business Journal

Senate President Pro Tem Bill Lockyer, the state’s top Democratic legislator, has softened his opposition to reforming the state’s eight-hour overtime rule.

In an interview, he says he now favors modest changes to the law or outright elimination of daily overtime in exchange for employer concessions in other areas.

“I don’t disagree with the business perspective on this matter,” Lockyer, D-Hayward, said. “But there needs to be give-and-take between the parties involved.”

On the issue of securities litigation reform, Lockyer said he hopes an ad hoc private sector group he convened last year can come up with a compromise reform package that could then be sent to the Legislature.

Lockyer also reiterated his desire to pass legislation to reduce the number of construction-defect lawsuits, saying that those suits slow the construction of new homes and drive up building costs.

“We need to reduce the number of lawsuits and overhead and still maintain good consumer protections. That means squeezing the transactional costs out of the system, and that means the lawyers,” he said.

However, Lockyer maintained his opposition to across-the-board corporate tax cuts, saying such cuts would take money away from schools.

Rather, he favors specific targeted tax cuts, such as his proposal to grant subchapter S status to corporations with up to 70 shareholders as federal law allows instead of the current 35 shareholders.

Subchapter S corporations are taxed by the state at a lower rate than regular corporations.

Lockyer said he remains cautious about offering tax incentives for employers who hire workers coming off the welfare rolls, saying he wants to focus instead on improving training programs and setting up computer bulletin boards to match job-seekers and employers.

As the senior Democratic leader in Sacramento, Lockyer’s stature rose considerably last November when the Democrats took back control of the state Legislature.

This time around, Lockyer will be shaping the legislative agenda along with his junior counterpart, Assembly Speaker Cruz Bustamante, D-Fresno.

But Lockyer will have to negotiate with the Republican minority if he wants to get measures past Gov. Pete Wilson’s veto pen.

The issue of overtime pay is shaping up to be one of those battleground areas.

Wilson, frustrated by repeated failures to get legislative approval for repeal of the state’s daily overtime requirement, turned to the Industrial Welfare Commission, the entity empowered to set overtime pay policy for hourly workers in California. Overtime pay is defined as a rate equal to 150 percent of the worker’s normal hourly pay rate.

Last month, after more than a year of hearings and input, the five-member commission voted to endorse the repeal of daily overtime in concept. A second vote is still needed to actually implement the decision. That vote is expected to come in late spring, after even more months of what promise to be very contentious hearings.

At first, Lockyer and other Democratic leaders blasted the commission’s decision to endorse the repeal, saying it is “hostile to the perspectives of working women and men without elected representatives (in the legislature) being involved in any manner.”

Lockyer also said at the time that he would push to reject Wilson’s appointments of three of the commissioners chairwoman Robyn Black of Visalia, Syed Alam of Sacramento and Terry Arnold of Bakersfield. Those appointments are subject to Senate confirmation. Black and Alam could be ousted from the commission as early as next month, meaning they would not be involved in a second and deciding vote on the repeal.

But Lockyer said he now agrees with the basic idea of changing the current requirement to pay overtime to those hourly workers who put in more than eight hours a day. He remains critical of the commission for deciding the issue without input from the Legislature.

California, Nevada and Alaska are the only states that do not conform to the federal standard requiring overtime pay after a 40-hour work week. Those three states have the stricter policy of overtime pay for daily work exceeding eight hours.

“The changes must be negotiated in a setting where both business and labor can walk away with something. There must be give-and-take with other issues thrown in. So that if business wins on daily overtime, maybe labor wins on prevailing wage or workers’ compensation benefits,” Lockyer said.

That idea was rebuffed by a spokesman for the California Manufacturers Association, one of the chief proponents of repealing daily overtime.

“He believes politics must take place in the decision process,” CMA spokesman Jeff Gorell said. “Clearly labor interests could try to exact some kind of reciprocation from business to allow this to go through. But we think this should be based on sound public policy; it shouldn’t be a chess game.”

Lockyer also put forward his own, more modest reform proposal. It would allow workers to put in longer days without overtime if that excess time was to make up for time off the worker had taken earlier in the same pay period.

Gorell said the CMA would look at any proposal to reform the daily overtime requirement, but added that piecemeal reform would likely not satisfy the manufacturers on the CMA board. “We’ve gotten a huge outcry from our companies the whole rule is draconian and it must go.”

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