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August 2000

Wage and Hour Regulations in the Thoroughbred Industry

When the California legislature enacted AB 60, the "Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999," the legislature specifically mandated the Industrial Welfare Commission or the IWC, the state agency with authority for establishing wage and hour regulations, to "conduct a review of wages, hours and working conditions for stable employees in the horse racing industry." AB 60 also provided that the existing exemption for stable employees, set forth in California Labor Code Section 1182.10, would expire on July 1, 2000. Under the Labor Code exemption, stable employees, defined as "grooms, hot walkers, exercise workers, and other employees engaged in the raising, feeding or management of racehorses at a racetrack or other non-farm training facility," were subject to the provisions of IWC Wage Order 14" (the wage order applicable to agricultural occupations). Now with the expiration of the Labor Code Section 1182.10 exemption, stable employees working at racetracks are subject to Wage Order 10, requiring employees be paid overtime for hours worked in excess of eight hours in a workday and 40 hours in a workweek.

The expiration of the exemption DOES NOT effect the status of employees involved in the care and management of racehorses on a farm. By its plain language, the Section 1182.10 exemption never applied to stable employees working on a farm. 

Therefore, the expiration of this exemption does not affect the status of stable employees working on a farm, whose wages, hours and working conditions will continue to be controlled under IWC Wage Order 14. That means stable employees engaged in the care, training and management of racehorses on a farm are entitled to overtime if they work more than 10 hours in a day or on the seventh consecutive day in a workweek.

The Federal law that regulates employee compensation and work hours, namely the Fair Labor Standards Act (FLSA), makes a similar distinction between overtime requirements applicable to employees caring for racehorses on a farm, opposed to employees with similar duties at a racetrack. Employees working in agriculture, as specifically defined under the FLSA, are exempt from the weekly overtime requirement imposed by the FLSA. The FLSA includes within its definition of exempt employees working in agriculture those employees who are engaged in the "raising of livestock," including horses.

Employees engaged in the breeding, raising and training of horses on farms for racing purposes are considered agricultural employees and are exempt from the FLSA overtime requirements. In contrast, employees engaged in the racing, training and care of horses performed off the farm in connection with commercial racing, are not agricultural employees and are entitled to overtime compensation for hours worked in excess of forty hours in a workweek. 

When a farmer is engaged in both the raising and commercial racing of racehorses, the activities performed by the farmer's employees off the farm, such as training a racehorse located at a racetrack, are not considered agricultural activities. Consequently, the farmer must be careful to keep accurate records of the hours worked by employees, the locations where employees are working and what types of work they are performing at those locations in order to be sure that employee compensation complies with the applicable California and Federal wage and hour regulations.

-Marcia A. Ross, Esq, 
shareholder with the law firm of Jory, Peterson, Watkins & Smith, located in Fresno, California and specializing in representation of management in labor and employment issues and litigation and in business litigation.

Copyright 1998-2000 California Thoroughbred Breeders Association