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Before the California Industrial Welfare Commission (commission) adopts an order fixing the wages, hours, and conditions of employment, the Labor Code generally requires that the commission determine that wages are inadequate or that the hours and working conditions are prejudicial to the health, morals, or welfare of employees; select a wage board to consider such matters in conference; consider the report and recommendations of the wage board; and circulate a proposal, hold public hearings on the proposal, and compile a record of the hearings. A statement of basis will necessarily vary depending on the material supporting an order and the terms of the order. The statement should reflect the factual, legal, and policy foundations for the action taken.
The California Hotel and Motel Association and others (the association) appeal from a judgment denying the association's petition for a writ of mandate to invalidate Order 5-76 of the respondent Industrial Welfare Commission (the commission). Order 5-76 fixes wages, hours, and conditions of employment in the public housekeeping industry, which provides meals, lodging, and maintenance services to the public. The association argues that order 5-76 is invalid because the commission did not investigate and find that wages were inadequate or that the hours or working conditions were harmful to employees in the industry, as required by Labor Code section 1178.
Was Order 5-76, which fixed the public housekeeping industry's wages, hours, and working conditions, valid?
The court rejected appellant association's assertion that the challenged order was invalid because respondent Industrial Welfare Commission did not investigate and find that wages were inadequate or that the hours or working conditions were harmful, as required by Cal. Lab. Code § 1178. The court, however, did find merit that Order 5-76 was invalid under Cal. Lab. Code § 1177 because respondent did not include an adequate statement of basis to support the order that fixed wages, hours, and working conditions for the public housekeeping industry. Accordingly, the court reversed and directed the issuance of a writ to compel respondent to take further action on the matter. The court concluded that the order's mere recitation of respondent's authority and of the procedures outlined in Cal. Lab. Code §§ 1171-1204 did not fulfill any of the functions of an effective statement of basis, noting that the requisite statement of findings was not included in the order, that the statement was not published or mailed to employers, and that the statement of findings did not address salient comments and alternatives presented during public hearings on the proposed order.