Amended IN Senate April 02, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 628Introduced by Senator Grove(Coauthors: Assembly Members Alanis, Gallagher, Jeff Gonzalez, Hoover, and Macedo)February 20, 2025 An act to add Division 6.1 (commencing with Section 13200) to the Unemployment Insurance Code, relating to employment. LEGISLATIVE COUNSEL'S DIGESTSB 628, as amended, Grove. Employment: employer contributions: employee withholdings: credit: agricultural employees.The Personal Income Tax Law imposes taxes on taxable income, as provided. Under existing law, every employer who pays wages to a resident employee for services performed either within or without this state, or to a nonresident employee for services performed in this state, is required to deduct and withhold from those wages, except as provided, for each payroll, a tax computed in an amount substantially equivalent to the amount reasonably estimated to be due under the Personal Income Tax Law. Under existing law, every employer required to withhold those taxes is required to, for each calendar quarter, file a withholding report, a quarterly return, and a report of wages in a form prescribed by the Employment Development Department, and pay over the taxes required to be withheld.This bill would authorize an employer to claim a credit in an amount equal to the amount of overtime wages, as defined, paid during that quarter to specified agricultural employees covered by a certain wage order. The bill would require the credit to be claimed on the employers report of contributions, quarterly return, and report of wages, or in an electronic funds transfer, as specified. The bill would prohibit the total amount claimed in any given quarter from exceeding the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all the following:(a) Californias agricultural industry is facing historic economic challenges. A few thousand California farmers and ranchers will likely go out of business in the next two or three years.(1) Climate change-induced drought has caused Californias irrigated farmland to shrink by 752,000 acres in the last five years. According to the United States Department of Agricultures 2022 Census of Agriculture, the number of California farms fell 10.5 percent between 2017 and 2022, a decrease of 7,387 farms. In 2024, the United States Secretary of Agriculture called the numbers in the 2022 Census of Agriculture a wake-up call.(2) The Department of Food and Agriculture reported that in 2023, Californias farms and ranches received $59.4 billion in cash receipts for their output. This represents a 1.4-percent increase in cash receipts compared to the previous year. This was significantly behind Californias inflation rate in 2023 that was 3.9 percent as measured by the California Consumer Price Index. This means that in 2023, Californias agricultural industry was $1.5 billion behind simply keeping up with inflation, which would have been breaking even.(3) In January 2024, at the State of the Industry at the Unified Wine and Grape Symposium, the California wine industry was urged to remove 50,000 acres of grapevines statewide to correct the oversupply issue. In 2024, the French government saw the same problem and allocated 120,000,000 in subsidies aimed at funding the permanent removal of vineyards. Their objective was to remove up to 100,000 hectares of vineyards in France. In 2023, the French government provided $215,000,000 in funding to wineries to sell off their surplus wine. To date, California has provided no similar financial support for California wineries and vineyards that are competing in a global market.(4) In August 2024, AgWest Farm Credit reported high interest rates, falling farm income, shifting water availability, and regulations are among the main drivers lowering agricultural land values in California.(5) In September 2024, AgWest Farm Credit conducted a profitability analysis of its core commodities and reported that only the cattle industry is profitable.(b) Californias 400,000 agricultural employees face incredible challenges and need help.(1) The Public Policy Institute of California in 2022 reported, A trend taking shape over decades is the increasingly settled nature of farm work, with workers living in the United States year-round. In the past, patterns of settling were quite different by immigration status. This report highlights the need of agricultural employees for year-round services including health care.(2) A November 2024 report from the Rural Health Information Hub stated, The challenges that rural residents face in accessing healthcare services contribute to health disparities. The barriers to healthcare access include distance and transportation, healthcare workforce shortages, cost of insurance, and lack of access to broadband, privacy, and health literacy.(3) Work in vineyards, orchards, and fields is hard work. Section 858 of the Labor Code states, Agricultural employees engage in back-breaking work every day. Few occupations in todays America are as physically demanding and exhausting as agricultural work. Yet Section 3441 of Title 8 of the California Code of Regulations is a barrier to using technology to make the work safer and less labor intensive.(4) Agricultural employees have a difficult time finding housing in California as the state has some of the highest housing prices in the nation. In the coastal area of the Counties of Monterey and Santa Cruz, a consortium of local agencies released a housing report in 2018 that found that about 73,000 agricultural employees live in the Salinas and Pajaro Valleys year round. An estimated 77 percent live in overcrowded or extremely overcrowded conditions, with multiple families sharing bedrooms. Little has been done by the State of California to help create new agricultural housing.(5) (A) Recognizing the needs and importance of supporting its agricultural employees, the Oregon Legislature approved House Bill 4002 in April 2024. The measure requires agricultural employers to pay certain workers for overtime hours worked and created a refundable personal or corporate income tax credit for employers for a percentage of wages paid as overtime pay to agricultural workers for calendar years 2023 through 2028.(B) The State of New York has also created a farm employer overtime credit. The credit is 118 percent of the overtime hours the agricultural employer paid multiplied by the difference between the employees overtime rate of pay and their regular rate of pay.(c) In 2016, the Legislature passed legislation that was intended to increase the take-home pay of California agricultural employees who are working overtime.(1) It was the intent of the Legislature, to enact the Phase-In Overtime for Agricultural Workers Act of 2016 to provide any person employed in an agricultural occupation in California, as defined in Order No. 14-2001 of the Industrial Welfare Commission (revised 07-2014) with an opportunity to earn overtime compensation under the same standards as millions of other Californians.(2) According to a 2023 study by the University of California, Berkeley, California farmworkers have made less money since the Phase-In Overtime for Agricultural Workers Act of 2016 became law. The study concluded, This early evidence suggests that the law may not be benefiting the workers they aim to protect.(3) The USDA Farm Labor Survey found that the average weekly hours of directly hired California workers fell relative to the average weekly hours of all United States directly hired farm workers. In 2016, Californias directly hired farm workers averaged 2.7 more hours a week than all United States farm workers. That fell to 1.9 more hours a week in 2019, 0.1 more hours in 2021, and one less hour in 2023, which means that directly hired California farm workers averaged an one hour less per week in 2023 than all United States farm workers.(d) As Californias agricultural industry faces economic challenges causing the reduction of overtime hours available to employees, the unintended consequence of the Phase-In Overtime for Agricultural Workers Act of 2016 is that employees are losing money. Therefore, it is in the public interest to support agricultural employees through public financial support of overtime wages.(1) The intent of enacting Section 13200 of the Unemployment Insurance Code is to recognize the findings and declarations in subdivisions (a) through (c), inclusive, and to provide a much-needed investment in the well-being of agricultural employees.(2) In September, 2024, Governor Gavin Newsom stated, Farmworkers are the backbone of Californias nation-leading agricultural industry and play a critical role in ensuring the stability of the state, nation and worlds food supply. Investing in their well-being is investing in Californias success.SECTION 1.SEC. 2. Division 6.1 (commencing with Section 13200) is added to the Unemployment Insurance Code, to read:DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.(f) For purposes of this section, the following definitions apply:(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.
Amended IN Senate April 02, 2025 CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION Senate Bill No. 628Introduced by Senator Grove(Coauthors: Assembly Members Alanis, Gallagher, Jeff Gonzalez, Hoover, and Macedo)February 20, 2025 An act to add Division 6.1 (commencing with Section 13200) to the Unemployment Insurance Code, relating to employment. LEGISLATIVE COUNSEL'S DIGESTSB 628, as amended, Grove. Employment: employer contributions: employee withholdings: credit: agricultural employees.The Personal Income Tax Law imposes taxes on taxable income, as provided. Under existing law, every employer who pays wages to a resident employee for services performed either within or without this state, or to a nonresident employee for services performed in this state, is required to deduct and withhold from those wages, except as provided, for each payroll, a tax computed in an amount substantially equivalent to the amount reasonably estimated to be due under the Personal Income Tax Law. Under existing law, every employer required to withhold those taxes is required to, for each calendar quarter, file a withholding report, a quarterly return, and a report of wages in a form prescribed by the Employment Development Department, and pay over the taxes required to be withheld.This bill would authorize an employer to claim a credit in an amount equal to the amount of overtime wages, as defined, paid during that quarter to specified agricultural employees covered by a certain wage order. The bill would require the credit to be claimed on the employers report of contributions, quarterly return, and report of wages, or in an electronic funds transfer, as specified. The bill would prohibit the total amount claimed in any given quarter from exceeding the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO
Amended IN Senate April 02, 2025
Amended IN Senate April 02, 2025
CALIFORNIA LEGISLATURE 20252026 REGULAR SESSION
Senate Bill
No. 628
Introduced by Senator Grove(Coauthors: Assembly Members Alanis, Gallagher, Jeff Gonzalez, Hoover, and Macedo)February 20, 2025
Introduced by Senator Grove(Coauthors: Assembly Members Alanis, Gallagher, Jeff Gonzalez, Hoover, and Macedo)
February 20, 2025
An act to add Division 6.1 (commencing with Section 13200) to the Unemployment Insurance Code, relating to employment.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
SB 628, as amended, Grove. Employment: employer contributions: employee withholdings: credit: agricultural employees.
The Personal Income Tax Law imposes taxes on taxable income, as provided. Under existing law, every employer who pays wages to a resident employee for services performed either within or without this state, or to a nonresident employee for services performed in this state, is required to deduct and withhold from those wages, except as provided, for each payroll, a tax computed in an amount substantially equivalent to the amount reasonably estimated to be due under the Personal Income Tax Law. Under existing law, every employer required to withhold those taxes is required to, for each calendar quarter, file a withholding report, a quarterly return, and a report of wages in a form prescribed by the Employment Development Department, and pay over the taxes required to be withheld.This bill would authorize an employer to claim a credit in an amount equal to the amount of overtime wages, as defined, paid during that quarter to specified agricultural employees covered by a certain wage order. The bill would require the credit to be claimed on the employers report of contributions, quarterly return, and report of wages, or in an electronic funds transfer, as specified. The bill would prohibit the total amount claimed in any given quarter from exceeding the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings.
The Personal Income Tax Law imposes taxes on taxable income, as provided. Under existing law, every employer who pays wages to a resident employee for services performed either within or without this state, or to a nonresident employee for services performed in this state, is required to deduct and withhold from those wages, except as provided, for each payroll, a tax computed in an amount substantially equivalent to the amount reasonably estimated to be due under the Personal Income Tax Law. Under existing law, every employer required to withhold those taxes is required to, for each calendar quarter, file a withholding report, a quarterly return, and a report of wages in a form prescribed by the Employment Development Department, and pay over the taxes required to be withheld.
This bill would authorize an employer to claim a credit in an amount equal to the amount of overtime wages, as defined, paid during that quarter to specified agricultural employees covered by a certain wage order. The bill would require the credit to be claimed on the employers report of contributions, quarterly return, and report of wages, or in an electronic funds transfer, as specified. The bill would prohibit the total amount claimed in any given quarter from exceeding the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. The Legislature finds and declares all the following:(a) Californias agricultural industry is facing historic economic challenges. A few thousand California farmers and ranchers will likely go out of business in the next two or three years.(1) Climate change-induced drought has caused Californias irrigated farmland to shrink by 752,000 acres in the last five years. According to the United States Department of Agricultures 2022 Census of Agriculture, the number of California farms fell 10.5 percent between 2017 and 2022, a decrease of 7,387 farms. In 2024, the United States Secretary of Agriculture called the numbers in the 2022 Census of Agriculture a wake-up call.(2) The Department of Food and Agriculture reported that in 2023, Californias farms and ranches received $59.4 billion in cash receipts for their output. This represents a 1.4-percent increase in cash receipts compared to the previous year. This was significantly behind Californias inflation rate in 2023 that was 3.9 percent as measured by the California Consumer Price Index. This means that in 2023, Californias agricultural industry was $1.5 billion behind simply keeping up with inflation, which would have been breaking even.(3) In January 2024, at the State of the Industry at the Unified Wine and Grape Symposium, the California wine industry was urged to remove 50,000 acres of grapevines statewide to correct the oversupply issue. In 2024, the French government saw the same problem and allocated 120,000,000 in subsidies aimed at funding the permanent removal of vineyards. Their objective was to remove up to 100,000 hectares of vineyards in France. In 2023, the French government provided $215,000,000 in funding to wineries to sell off their surplus wine. To date, California has provided no similar financial support for California wineries and vineyards that are competing in a global market.(4) In August 2024, AgWest Farm Credit reported high interest rates, falling farm income, shifting water availability, and regulations are among the main drivers lowering agricultural land values in California.(5) In September 2024, AgWest Farm Credit conducted a profitability analysis of its core commodities and reported that only the cattle industry is profitable.(b) Californias 400,000 agricultural employees face incredible challenges and need help.(1) The Public Policy Institute of California in 2022 reported, A trend taking shape over decades is the increasingly settled nature of farm work, with workers living in the United States year-round. In the past, patterns of settling were quite different by immigration status. This report highlights the need of agricultural employees for year-round services including health care.(2) A November 2024 report from the Rural Health Information Hub stated, The challenges that rural residents face in accessing healthcare services contribute to health disparities. The barriers to healthcare access include distance and transportation, healthcare workforce shortages, cost of insurance, and lack of access to broadband, privacy, and health literacy.(3) Work in vineyards, orchards, and fields is hard work. Section 858 of the Labor Code states, Agricultural employees engage in back-breaking work every day. Few occupations in todays America are as physically demanding and exhausting as agricultural work. Yet Section 3441 of Title 8 of the California Code of Regulations is a barrier to using technology to make the work safer and less labor intensive.(4) Agricultural employees have a difficult time finding housing in California as the state has some of the highest housing prices in the nation. In the coastal area of the Counties of Monterey and Santa Cruz, a consortium of local agencies released a housing report in 2018 that found that about 73,000 agricultural employees live in the Salinas and Pajaro Valleys year round. An estimated 77 percent live in overcrowded or extremely overcrowded conditions, with multiple families sharing bedrooms. Little has been done by the State of California to help create new agricultural housing.(5) (A) Recognizing the needs and importance of supporting its agricultural employees, the Oregon Legislature approved House Bill 4002 in April 2024. The measure requires agricultural employers to pay certain workers for overtime hours worked and created a refundable personal or corporate income tax credit for employers for a percentage of wages paid as overtime pay to agricultural workers for calendar years 2023 through 2028.(B) The State of New York has also created a farm employer overtime credit. The credit is 118 percent of the overtime hours the agricultural employer paid multiplied by the difference between the employees overtime rate of pay and their regular rate of pay.(c) In 2016, the Legislature passed legislation that was intended to increase the take-home pay of California agricultural employees who are working overtime.(1) It was the intent of the Legislature, to enact the Phase-In Overtime for Agricultural Workers Act of 2016 to provide any person employed in an agricultural occupation in California, as defined in Order No. 14-2001 of the Industrial Welfare Commission (revised 07-2014) with an opportunity to earn overtime compensation under the same standards as millions of other Californians.(2) According to a 2023 study by the University of California, Berkeley, California farmworkers have made less money since the Phase-In Overtime for Agricultural Workers Act of 2016 became law. The study concluded, This early evidence suggests that the law may not be benefiting the workers they aim to protect.(3) The USDA Farm Labor Survey found that the average weekly hours of directly hired California workers fell relative to the average weekly hours of all United States directly hired farm workers. In 2016, Californias directly hired farm workers averaged 2.7 more hours a week than all United States farm workers. That fell to 1.9 more hours a week in 2019, 0.1 more hours in 2021, and one less hour in 2023, which means that directly hired California farm workers averaged an one hour less per week in 2023 than all United States farm workers.(d) As Californias agricultural industry faces economic challenges causing the reduction of overtime hours available to employees, the unintended consequence of the Phase-In Overtime for Agricultural Workers Act of 2016 is that employees are losing money. Therefore, it is in the public interest to support agricultural employees through public financial support of overtime wages.(1) The intent of enacting Section 13200 of the Unemployment Insurance Code is to recognize the findings and declarations in subdivisions (a) through (c), inclusive, and to provide a much-needed investment in the well-being of agricultural employees.(2) In September, 2024, Governor Gavin Newsom stated, Farmworkers are the backbone of Californias nation-leading agricultural industry and play a critical role in ensuring the stability of the state, nation and worlds food supply. Investing in their well-being is investing in Californias success.SECTION 1.SEC. 2. Division 6.1 (commencing with Section 13200) is added to the Unemployment Insurance Code, to read:DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.(f) For purposes of this section, the following definitions apply:(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares all the following:(a) Californias agricultural industry is facing historic economic challenges. A few thousand California farmers and ranchers will likely go out of business in the next two or three years.(1) Climate change-induced drought has caused Californias irrigated farmland to shrink by 752,000 acres in the last five years. According to the United States Department of Agricultures 2022 Census of Agriculture, the number of California farms fell 10.5 percent between 2017 and 2022, a decrease of 7,387 farms. In 2024, the United States Secretary of Agriculture called the numbers in the 2022 Census of Agriculture a wake-up call.(2) The Department of Food and Agriculture reported that in 2023, Californias farms and ranches received $59.4 billion in cash receipts for their output. This represents a 1.4-percent increase in cash receipts compared to the previous year. This was significantly behind Californias inflation rate in 2023 that was 3.9 percent as measured by the California Consumer Price Index. This means that in 2023, Californias agricultural industry was $1.5 billion behind simply keeping up with inflation, which would have been breaking even.(3) In January 2024, at the State of the Industry at the Unified Wine and Grape Symposium, the California wine industry was urged to remove 50,000 acres of grapevines statewide to correct the oversupply issue. In 2024, the French government saw the same problem and allocated 120,000,000 in subsidies aimed at funding the permanent removal of vineyards. Their objective was to remove up to 100,000 hectares of vineyards in France. In 2023, the French government provided $215,000,000 in funding to wineries to sell off their surplus wine. To date, California has provided no similar financial support for California wineries and vineyards that are competing in a global market.(4) In August 2024, AgWest Farm Credit reported high interest rates, falling farm income, shifting water availability, and regulations are among the main drivers lowering agricultural land values in California.(5) In September 2024, AgWest Farm Credit conducted a profitability analysis of its core commodities and reported that only the cattle industry is profitable.(b) Californias 400,000 agricultural employees face incredible challenges and need help.(1) The Public Policy Institute of California in 2022 reported, A trend taking shape over decades is the increasingly settled nature of farm work, with workers living in the United States year-round. In the past, patterns of settling were quite different by immigration status. This report highlights the need of agricultural employees for year-round services including health care.(2) A November 2024 report from the Rural Health Information Hub stated, The challenges that rural residents face in accessing healthcare services contribute to health disparities. The barriers to healthcare access include distance and transportation, healthcare workforce shortages, cost of insurance, and lack of access to broadband, privacy, and health literacy.(3) Work in vineyards, orchards, and fields is hard work. Section 858 of the Labor Code states, Agricultural employees engage in back-breaking work every day. Few occupations in todays America are as physically demanding and exhausting as agricultural work. Yet Section 3441 of Title 8 of the California Code of Regulations is a barrier to using technology to make the work safer and less labor intensive.(4) Agricultural employees have a difficult time finding housing in California as the state has some of the highest housing prices in the nation. In the coastal area of the Counties of Monterey and Santa Cruz, a consortium of local agencies released a housing report in 2018 that found that about 73,000 agricultural employees live in the Salinas and Pajaro Valleys year round. An estimated 77 percent live in overcrowded or extremely overcrowded conditions, with multiple families sharing bedrooms. Little has been done by the State of California to help create new agricultural housing.(5) (A) Recognizing the needs and importance of supporting its agricultural employees, the Oregon Legislature approved House Bill 4002 in April 2024. The measure requires agricultural employers to pay certain workers for overtime hours worked and created a refundable personal or corporate income tax credit for employers for a percentage of wages paid as overtime pay to agricultural workers for calendar years 2023 through 2028.(B) The State of New York has also created a farm employer overtime credit. The credit is 118 percent of the overtime hours the agricultural employer paid multiplied by the difference between the employees overtime rate of pay and their regular rate of pay.(c) In 2016, the Legislature passed legislation that was intended to increase the take-home pay of California agricultural employees who are working overtime.(1) It was the intent of the Legislature, to enact the Phase-In Overtime for Agricultural Workers Act of 2016 to provide any person employed in an agricultural occupation in California, as defined in Order No. 14-2001 of the Industrial Welfare Commission (revised 07-2014) with an opportunity to earn overtime compensation under the same standards as millions of other Californians.(2) According to a 2023 study by the University of California, Berkeley, California farmworkers have made less money since the Phase-In Overtime for Agricultural Workers Act of 2016 became law. The study concluded, This early evidence suggests that the law may not be benefiting the workers they aim to protect.(3) The USDA Farm Labor Survey found that the average weekly hours of directly hired California workers fell relative to the average weekly hours of all United States directly hired farm workers. In 2016, Californias directly hired farm workers averaged 2.7 more hours a week than all United States farm workers. That fell to 1.9 more hours a week in 2019, 0.1 more hours in 2021, and one less hour in 2023, which means that directly hired California farm workers averaged an one hour less per week in 2023 than all United States farm workers.(d) As Californias agricultural industry faces economic challenges causing the reduction of overtime hours available to employees, the unintended consequence of the Phase-In Overtime for Agricultural Workers Act of 2016 is that employees are losing money. Therefore, it is in the public interest to support agricultural employees through public financial support of overtime wages.(1) The intent of enacting Section 13200 of the Unemployment Insurance Code is to recognize the findings and declarations in subdivisions (a) through (c), inclusive, and to provide a much-needed investment in the well-being of agricultural employees.(2) In September, 2024, Governor Gavin Newsom stated, Farmworkers are the backbone of Californias nation-leading agricultural industry and play a critical role in ensuring the stability of the state, nation and worlds food supply. Investing in their well-being is investing in Californias success.
SECTION 1. The Legislature finds and declares all the following:(a) Californias agricultural industry is facing historic economic challenges. A few thousand California farmers and ranchers will likely go out of business in the next two or three years.(1) Climate change-induced drought has caused Californias irrigated farmland to shrink by 752,000 acres in the last five years. According to the United States Department of Agricultures 2022 Census of Agriculture, the number of California farms fell 10.5 percent between 2017 and 2022, a decrease of 7,387 farms. In 2024, the United States Secretary of Agriculture called the numbers in the 2022 Census of Agriculture a wake-up call.(2) The Department of Food and Agriculture reported that in 2023, Californias farms and ranches received $59.4 billion in cash receipts for their output. This represents a 1.4-percent increase in cash receipts compared to the previous year. This was significantly behind Californias inflation rate in 2023 that was 3.9 percent as measured by the California Consumer Price Index. This means that in 2023, Californias agricultural industry was $1.5 billion behind simply keeping up with inflation, which would have been breaking even.(3) In January 2024, at the State of the Industry at the Unified Wine and Grape Symposium, the California wine industry was urged to remove 50,000 acres of grapevines statewide to correct the oversupply issue. In 2024, the French government saw the same problem and allocated 120,000,000 in subsidies aimed at funding the permanent removal of vineyards. Their objective was to remove up to 100,000 hectares of vineyards in France. In 2023, the French government provided $215,000,000 in funding to wineries to sell off their surplus wine. To date, California has provided no similar financial support for California wineries and vineyards that are competing in a global market.(4) In August 2024, AgWest Farm Credit reported high interest rates, falling farm income, shifting water availability, and regulations are among the main drivers lowering agricultural land values in California.(5) In September 2024, AgWest Farm Credit conducted a profitability analysis of its core commodities and reported that only the cattle industry is profitable.(b) Californias 400,000 agricultural employees face incredible challenges and need help.(1) The Public Policy Institute of California in 2022 reported, A trend taking shape over decades is the increasingly settled nature of farm work, with workers living in the United States year-round. In the past, patterns of settling were quite different by immigration status. This report highlights the need of agricultural employees for year-round services including health care.(2) A November 2024 report from the Rural Health Information Hub stated, The challenges that rural residents face in accessing healthcare services contribute to health disparities. The barriers to healthcare access include distance and transportation, healthcare workforce shortages, cost of insurance, and lack of access to broadband, privacy, and health literacy.(3) Work in vineyards, orchards, and fields is hard work. Section 858 of the Labor Code states, Agricultural employees engage in back-breaking work every day. Few occupations in todays America are as physically demanding and exhausting as agricultural work. Yet Section 3441 of Title 8 of the California Code of Regulations is a barrier to using technology to make the work safer and less labor intensive.(4) Agricultural employees have a difficult time finding housing in California as the state has some of the highest housing prices in the nation. In the coastal area of the Counties of Monterey and Santa Cruz, a consortium of local agencies released a housing report in 2018 that found that about 73,000 agricultural employees live in the Salinas and Pajaro Valleys year round. An estimated 77 percent live in overcrowded or extremely overcrowded conditions, with multiple families sharing bedrooms. Little has been done by the State of California to help create new agricultural housing.(5) (A) Recognizing the needs and importance of supporting its agricultural employees, the Oregon Legislature approved House Bill 4002 in April 2024. The measure requires agricultural employers to pay certain workers for overtime hours worked and created a refundable personal or corporate income tax credit for employers for a percentage of wages paid as overtime pay to agricultural workers for calendar years 2023 through 2028.(B) The State of New York has also created a farm employer overtime credit. The credit is 118 percent of the overtime hours the agricultural employer paid multiplied by the difference between the employees overtime rate of pay and their regular rate of pay.(c) In 2016, the Legislature passed legislation that was intended to increase the take-home pay of California agricultural employees who are working overtime.(1) It was the intent of the Legislature, to enact the Phase-In Overtime for Agricultural Workers Act of 2016 to provide any person employed in an agricultural occupation in California, as defined in Order No. 14-2001 of the Industrial Welfare Commission (revised 07-2014) with an opportunity to earn overtime compensation under the same standards as millions of other Californians.(2) According to a 2023 study by the University of California, Berkeley, California farmworkers have made less money since the Phase-In Overtime for Agricultural Workers Act of 2016 became law. The study concluded, This early evidence suggests that the law may not be benefiting the workers they aim to protect.(3) The USDA Farm Labor Survey found that the average weekly hours of directly hired California workers fell relative to the average weekly hours of all United States directly hired farm workers. In 2016, Californias directly hired farm workers averaged 2.7 more hours a week than all United States farm workers. That fell to 1.9 more hours a week in 2019, 0.1 more hours in 2021, and one less hour in 2023, which means that directly hired California farm workers averaged an one hour less per week in 2023 than all United States farm workers.(d) As Californias agricultural industry faces economic challenges causing the reduction of overtime hours available to employees, the unintended consequence of the Phase-In Overtime for Agricultural Workers Act of 2016 is that employees are losing money. Therefore, it is in the public interest to support agricultural employees through public financial support of overtime wages.(1) The intent of enacting Section 13200 of the Unemployment Insurance Code is to recognize the findings and declarations in subdivisions (a) through (c), inclusive, and to provide a much-needed investment in the well-being of agricultural employees.(2) In September, 2024, Governor Gavin Newsom stated, Farmworkers are the backbone of Californias nation-leading agricultural industry and play a critical role in ensuring the stability of the state, nation and worlds food supply. Investing in their well-being is investing in Californias success.
SECTION 1. The Legislature finds and declares all the following:
### SECTION 1.
(a) Californias agricultural industry is facing historic economic challenges. A few thousand California farmers and ranchers will likely go out of business in the next two or three years.
(1) Climate change-induced drought has caused Californias irrigated farmland to shrink by 752,000 acres in the last five years. According to the United States Department of Agricultures 2022 Census of Agriculture, the number of California farms fell 10.5 percent between 2017 and 2022, a decrease of 7,387 farms. In 2024, the United States Secretary of Agriculture called the numbers in the 2022 Census of Agriculture a wake-up call.
(2) The Department of Food and Agriculture reported that in 2023, Californias farms and ranches received $59.4 billion in cash receipts for their output. This represents a 1.4-percent increase in cash receipts compared to the previous year. This was significantly behind Californias inflation rate in 2023 that was 3.9 percent as measured by the California Consumer Price Index. This means that in 2023, Californias agricultural industry was $1.5 billion behind simply keeping up with inflation, which would have been breaking even.
(3) In January 2024, at the State of the Industry at the Unified Wine and Grape Symposium, the California wine industry was urged to remove 50,000 acres of grapevines statewide to correct the oversupply issue. In 2024, the French government saw the same problem and allocated 120,000,000 in subsidies aimed at funding the permanent removal of vineyards. Their objective was to remove up to 100,000 hectares of vineyards in France. In 2023, the French government provided $215,000,000 in funding to wineries to sell off their surplus wine. To date, California has provided no similar financial support for California wineries and vineyards that are competing in a global market.
(4) In August 2024, AgWest Farm Credit reported high interest rates, falling farm income, shifting water availability, and regulations are among the main drivers lowering agricultural land values in California.
(5) In September 2024, AgWest Farm Credit conducted a profitability analysis of its core commodities and reported that only the cattle industry is profitable.
(b) Californias 400,000 agricultural employees face incredible challenges and need help.
(1) The Public Policy Institute of California in 2022 reported, A trend taking shape over decades is the increasingly settled nature of farm work, with workers living in the United States year-round. In the past, patterns of settling were quite different by immigration status. This report highlights the need of agricultural employees for year-round services including health care.
(2) A November 2024 report from the Rural Health Information Hub stated, The challenges that rural residents face in accessing healthcare services contribute to health disparities. The barriers to healthcare access include distance and transportation, healthcare workforce shortages, cost of insurance, and lack of access to broadband, privacy, and health literacy.
(3) Work in vineyards, orchards, and fields is hard work. Section 858 of the Labor Code states, Agricultural employees engage in back-breaking work every day. Few occupations in todays America are as physically demanding and exhausting as agricultural work. Yet Section 3441 of Title 8 of the California Code of Regulations is a barrier to using technology to make the work safer and less labor intensive.
(4) Agricultural employees have a difficult time finding housing in California as the state has some of the highest housing prices in the nation. In the coastal area of the Counties of Monterey and Santa Cruz, a consortium of local agencies released a housing report in 2018 that found that about 73,000 agricultural employees live in the Salinas and Pajaro Valleys year round. An estimated 77 percent live in overcrowded or extremely overcrowded conditions, with multiple families sharing bedrooms. Little has been done by the State of California to help create new agricultural housing.
(5) (A) Recognizing the needs and importance of supporting its agricultural employees, the Oregon Legislature approved House Bill 4002 in April 2024. The measure requires agricultural employers to pay certain workers for overtime hours worked and created a refundable personal or corporate income tax credit for employers for a percentage of wages paid as overtime pay to agricultural workers for calendar years 2023 through 2028.
(B) The State of New York has also created a farm employer overtime credit. The credit is 118 percent of the overtime hours the agricultural employer paid multiplied by the difference between the employees overtime rate of pay and their regular rate of pay.
(c) In 2016, the Legislature passed legislation that was intended to increase the take-home pay of California agricultural employees who are working overtime.
(1) It was the intent of the Legislature, to enact the Phase-In Overtime for Agricultural Workers Act of 2016 to provide any person employed in an agricultural occupation in California, as defined in Order No. 14-2001 of the Industrial Welfare Commission (revised 07-2014) with an opportunity to earn overtime compensation under the same standards as millions of other Californians.
(2) According to a 2023 study by the University of California, Berkeley, California farmworkers have made less money since the Phase-In Overtime for Agricultural Workers Act of 2016 became law. The study concluded, This early evidence suggests that the law may not be benefiting the workers they aim to protect.
(3) The USDA Farm Labor Survey found that the average weekly hours of directly hired California workers fell relative to the average weekly hours of all United States directly hired farm workers. In 2016, Californias directly hired farm workers averaged 2.7 more hours a week than all United States farm workers. That fell to 1.9 more hours a week in 2019, 0.1 more hours in 2021, and one less hour in 2023, which means that directly hired California farm workers averaged an one hour less per week in 2023 than all United States farm workers.
(d) As Californias agricultural industry faces economic challenges causing the reduction of overtime hours available to employees, the unintended consequence of the Phase-In Overtime for Agricultural Workers Act of 2016 is that employees are losing money. Therefore, it is in the public interest to support agricultural employees through public financial support of overtime wages.
(1) The intent of enacting Section 13200 of the Unemployment Insurance Code is to recognize the findings and declarations in subdivisions (a) through (c), inclusive, and to provide a much-needed investment in the well-being of agricultural employees.
(2) In September, 2024, Governor Gavin Newsom stated, Farmworkers are the backbone of Californias nation-leading agricultural industry and play a critical role in ensuring the stability of the state, nation and worlds food supply. Investing in their well-being is investing in Californias success.
SECTION 1.SEC. 2. Division 6.1 (commencing with Section 13200) is added to the Unemployment Insurance Code, to read:DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.(f) For purposes of this section, the following definitions apply:(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.
SECTION 1.SEC. 2. Division 6.1 (commencing with Section 13200) is added to the Unemployment Insurance Code, to read:
### SECTION 1.SEC. 2.
DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.(f) For purposes of this section, the following definitions apply:(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.
DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.(f) For purposes of this section, the following definitions apply:(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.
DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit
DIVISION 6.1. Overtime for Agricultural Workers Act of 2016 Credit
13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.(f) For purposes of this section, the following definitions apply:(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.
13200. (a) An employer whose employees are covered by Wage Order No. 14-2001 of the Industrial Welfare Commission may claim a credit in accordance with this section.
(b) (1) Subject to paragraph (2), the amount of the credit shall be equal to the amount of overtime wages paid for that quarter under Chapter 6 (commencing with Section 857) of Part 2 of Division 2 of the Labor Code to employees who are covered by Wage Order No. 14-2001.
(2) For any employer, the total amount claimed pursuant to paragraph (1) in any given quarter shall not exceed the amount that would have been remitted for that quarter to the Employment Development Department for employee withholdings pursuant to Division 6 (commencing with Section 13000) but for the operation of this section.
(c) The credit shall be claimed, in a form and manner prescribed by the department, pursuant to either of the following:
(1) On the report of contributions, quarterly return, and report of wages required under Section 1088.
(2) In an electronic funds transfer pursuant to subdivision (f) of Section 1110 or Section 13021.
(d) (1) This section does not change the amount of taxes required to be withheld from employees pursuant to Division 6 (commencing with Section 13000) and required to be reported to the employee, the Employment Development Department, the Franchise Tax Board, and the Internal Revenue Service.
(2) This section does not require additional taxes to be paid by the employee or otherwise alter the employees tax liability under Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code.
(3) It is the intent of the Legislature that the operation of this section does not require an appropriation of moneys by reducing moneys remitted by the employer to the Employment Development Department that would otherwise be deposited in the General Fund.
(e) The Employment Development Department may adopt rules and regulations that are necessary or appropriate to implement this section.
(f) For purposes of this section, the following definitions apply:
(1) Employee has the same meaning as that term is used in Sections 3205, 3205.1, 3205.2, and 3205.3 of Title 8 of the California Code of Regulations, as those sections read on January 1, 2023.
(2) Overtime wages means the difference between the employees overtime rate of pay and their regular rate of pay.
(3) Quarterly return means the form on which the employer reports its employer contributions and employee withholdings pursuant to this code.