An act to add Division 6.1 (commencing with Section 13200) to the Unemployment Insurance Code, relating to employment.
Summary
SB 628 would create a new credit in the Unemployment Insurance Code for employers of agricultural workers covered by Wage Order No. 14-2001. The credit would equal the amount of overtime wages paid in a quarter to those employees, where “overtime wages” is defined as the difference between the overtime rate and the regular rate of pay. Employers would claim the credit through their quarterly employment tax filings or an electronic funds transfer, and the bill limits the credit so it cannot exceed the amount the employer otherwise would have remitted to the Employment Development Department for employee withholdings in that quarter.
The bill is framed as a response to economic stress in California agriculture and to concerns that the 2016 phase-in of agricultural overtime may have reduced workers’ hours and earnings. Its findings cite drought, declining farm numbers, housing and health-care challenges for farmworkers, and similar overtime tax credits in Oregon and New York. The bill also states that it does not change employee withholding amounts or employee tax liability, and it directs the Employment Development Department to adopt implementing regulations.
Impact
SB 628 would add Division 6.1 to the Unemployment Insurance Code and create a state-administered employer credit tied to overtime pay for agricultural employees. In practice, it would reduce the amount certain agricultural employers remit to the Employment Development Department for employee withholdings, up to the amount of overtime wages paid, while preserving existing withholding obligations and employee tax treatment. The bill would affect agricultural employers covered by Wage Order No. 14-2001, the Employment Development Department, and indirectly the General Fund because the bill expressly states it is intended not to require an appropriation by reducing remittances that would otherwise go to the General Fund.
Sentiment
The bill’s stated purpose and the legislative findings reflect strong support for California farmworkers and for agricultural employers facing economic pressure, but the committee record shows the measure did not advance smoothly. The available vote history indicates a failed passage in committee on a 5-0 vote, followed by reconsideration and a later 1-4 vote on a do-pass motion with re-referral to Appropriations. That pattern suggests the concept had some initial procedural support but ultimately encountered significant resistance.
Contention
The main point of contention is fiscal and policy design: supporters argue the credit would help offset the cost of agricultural overtime and support farmworker earnings, while opponents or skeptics appear to have concerns about reducing revenue that would otherwise flow to the Employment Development Department and General Fund. Another likely issue is whether the credit would actually benefit workers or instead subsidize employers without addressing the underlying reduction in overtime hours. The bill’s own findings acknowledge that the 2016 overtime law may have had unintended consequences, which may have sharpened debate over whether a tax credit is the right remedy.
An act to add Chapter 22 (commencing with Section 1915) to Division 1.1 of, to add Chapter 13 (commencing with Section 16910) to Division 5 of, and to add Chapter 10 (commencing with Section 50710) to Division 20 of, the Financial Code, relating to financial institutions.