January 2023: New California Overtime Rate in 2023 for Agricultural Employees Working for Employers who Employ 25 or Fewer Employees

Update Applicable to:
All employers who employ 25 or fewer agricultural employees in the state of California.

What happened and what are the details?
In 2016, the Legislature passed Assembly Bill 1066 (AB 1066), known as the “Phase-In Overtime for Agricultural Workers Act.” The law provides overtime pay for all agricultural employees, with requirements gradually phased in so that overtime protections for all agricultural workers will ultimately match those guaranteed to non-agricultural employees.

For agricultural employees working for employers who employ 26 or more employees, this matches with generally applicable overtime requirements that took effect on January 1, 2022, with those workers entitled to overtime compensation for all hours worked in excess of eight hours in a workday or 40 hours in a workweek.

The new requirements that take effect on January 1, 2023, for agricultural employees working for employers who employ 25 or fewer employees – overtime pay for all work in excess of nine hours in one day or 50 hours in one week – bring these workers closer to the end-goal of the phase-in. The chart below provides more details about the phase-in.

Schedule for Changes to Daily and Weekly Hours After Which Agricultural Workers Receive Overtime Pay

Agricultural employees are also generally entitled to time and one-half pay for the first eight hours worked on the seventh consecutive day of work and double-time pay for all work performed in excess of eight hours on the seventh consecutive day of work. These protections apply regardless of employer size.

Non-agricultural employees employed by businesses that also employ agricultural employees are entitled to overtime after 8 hours in a workday or after 40 regular hours in a workweek, in addition to double time under the applicable wage order.

For more information, please see the links below:

Assembly Bill 1066 (AB 1066)

DIR News Release

What do employers need to do?
Employers should review the links provided above and make immediate changes to their overtime pay policies to ensure that their workers are provided their appropriate pay and the employers are in compliance with the law.