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The Tribune,
January 10, 2001: New Employment Laws (January 2001)
Builders Wary of Wage Rule
by Raven J. Railey
This article appeared in the
Business section of The Tribune on January 10, 2001 and was
written by Raven J. Railey. This article © 2001 The Tribune
(Construction workers, like Jose Tabarez of Wysong Construction,
are guaranteed to be paid overtime under a rule that went into
effect Jan. 1. Wysong is a contractor working on the new Lewis
Middle School gym in Paso Robles. photo: Joe Johnston)
As county employers sift through
the slew of fresh labor laws ushered in with the new year,
some contractors fear a new overtime requirement for construction
workers could boost costs and delay projects.
Keeping up with changes to the
employment code has become an annual routine for business
owners. But in recent years, more bills have been coming
out of Sacramento than before, said Susan Waag, a San
Luis Obispo labor attorney.
And 2001 is no exception.
“We are in an environment where
new laws are coming fast and furious,” she said.
The recent minimum wage increase
may have little impact here, said Dave Garth, president of
the San Luis Obispo Chamber of Commerce. With the exception
of fast food and some motels, most businesses already pay
more than $6.25 an hour.
But this and other new bills,
ranging from disability discrimination to domestic violence,
carry ripple effects that could cost employers.
One of the latest — a law mandating
overtime for on-site construction workers — may change the
landscape for those in the building industry.
“It’s going to be a huge adaptation,” Waag said. “Most
other employers are accustomed to the idea of overtime. With
construction, you only have so many daylight hours and it
could rain the next day. You can’t always predict that when
you are bidding a job.”
For years, state law was ambiguous
about wage and hour requirements for employees doing construction,
drilling, logging and mining. Wage Order 16, which took effect
Jan. 1, gives clear guidelines for these professions. Such
workers will now receive overtime when employed more than
eight hours a day. For more than 12 hours, they receive double
time.
In the past year, more than
5 percent of county jobs were in the construction industry,
according the UCSB Economic Forecast for 2001.
Labor statistics from the Employment
Development Department show that includes more than 6,000
individuals. But not all those employees will be affected.
Those with union shops are exempt — presumably
because their collective-bargaining agreement already includes
overtime, Waag said.
Other employers, like Atascadero
general contractor Larry Wysong, handle mainly government
contracts. Like unions, they require payment according to
prevailing-wage scales outlined by the state.
“We pretty well always run an
eight-hour work day,” Wysong said. “Most (construction) employers
in today’s environment cannot afford to pay overtime. I don’t
bid it into the project.”
Though Wysong Construction employees
won’t see the changes, plenty of nonunion companies with
private contracts will, he said. And at $32 an hour — the
starting wage at Wysong — time-and-a-half hours can balloon
a contractor’s payroll costs in a hurry.
When faced with lost hours due
to weather or other unforeseen events, Wysong believes most
employers will opt to prolong end dates rather than eat into
their bottom line.
“It could slow projects down,” he
said. “It could have a little increase on construction costs.
But I think most of the effect is going to be felt by the
employees who can’t make up the time they lost.”
But Ted Hall, business manager
for the International Brotherhood of Electrical Workers Local
639, thinks it will push owners and managers to better manage
their schedules.
“It’s a big incentive for employers
to plan work in terms of how it impacts their employees,” Hall
said. “The whole idea with overtime is to maintain a consistent
work week so employees can plan their family life and personal
affairs.” Hall also thinks it will level the playing field
when union and nonunion contractors are bidding the same
job. It could also help avoid injuries resulting from long
work days.
In contrast to the profound
impact on the construction companies, the rest of the local
economy may barely brush up against the minimum wage hike.
Service-industry jobs — generally
most affected by changes to the minimum wage — make up a
whopping 27.5 percent of the county’s economy, the UCSB forecast
says.
But with the county’s unemployment
rate hovering around 3 percent, the majority of businesses
are already paying above the $6.25 minimum, Garth said.
Fast-food places like McDonald’s
confirm they still start workers at the lowest legal wage.
But even small motels say they pay housekeeping staff a higher
hourly amount.
“It’s a hard job,” said Kamille
Anderson, general manager of Adams Pirates Cove Inn in Pismo
Beach. “If you want to keep people on, you have to pay them
more.”
The minimum-wage increase has
other indirect effects, like raising the minimum salary for
exempt employees. They must earn at least twice the state
minimum wage, or $2,166 a month.
Other recent changes employers
may want to investigate:
• Disability discrimination — AB
2222 expands the definition of physical and mental disabilities.
Even employees who take corrective measures, like wearing
glasses, can now be considered disabled in a discrimination
suit. Allen Hutkin, a San Luis Obispo labor lawyer, recommends
employers seriously consider any worker’s request to accommodate
limitations.
• Sexual harassment — Anyone
sexually harassing a co-worker is now personally liable under
the Fair Employment Housing Act.
• Computer professionals — Certain
employees paid more than $41 an hour may be exempt from overtime
depending on the nature of their work.
• Domestic violence — Employers
with more than 25 workers cannot fire or discriminate against
one taking time off for treatment or services as a victim
of violence.
• Independent contractors — To
help the state track down unpaid child support, employers
must now report any independent contractor earning more than
$600.
Photo of Raven J. Railey
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