CALIFORNIA HOTEL AND MOTEL ASSOCIATION v. INDUSTRIAL WELFARE COMMISSION (1978)

This is an appeal from the trial court's denial of a petition for writ of mandate in which the plaintiffs, California Hotel and Motel Association, et al., (association) sought to prevent enforcement of the Industrial Welfare Commission's (commission) Industry Order, Number 5-76, which established wages, hours and working conditions in the public housekeeping industry, generally described as an industry, business or establishment which provides meals, housing, or maintenance services and is not covered by any other industry order of the commission.

The order in question was issued pursuant to the provisions of Labor Code section 1171 et seq., which grants the commission authority to establish regulations concerning wages, hours of work and working conditions for all employees in this state. (Lab.Code, s 1182.)^[FN1]

Pursuant to authority of the commission, it appointed commissioners to serve on 15 separate wage boards, one for each industry or occupational group to be covered by the orders. The wage boards were composed of an equal number of representatives of employers and employees in the respective industries as required. (Lab.Code, s 1178.)

In January 1976 the commission received majority and minority reports from the wage boards concerning the various orders. In April 1976 the commission met for six days in executive session to consider these reports. Proposed orders were then issued for consideration by the public. On May 10, 1976, the commission issued a Notice of Public Hearing and invited public testimony on the orders in a series of combined hearings. Thereafter the commission adopted a revised set of orders in July 1976. Numerous petitions for rehearing were filed, including that of the association. In September 1976, a public meeting was held to consider these petitions. These challenges were denied and the orders became effective on October 18, 1976.

The major revisions to existing regulations which Order 5-76 accomplishes are as follows:

(1) Extends the application of all provisions to male employees. (s 1.)

(2) Reduces the 48-hour workweek to 40 hours and requires employers whose employees work overnight shifts to provide facilities on the premises for hot food and drink. (s 3.)

(3) Increases the basic minimum wage from $2 to $2.50 per hour. Increases the “learners” and “minors” minimum wage from $1.75 to $2.15 per hour and abolishes the “student” category. (s 4.)

(4) Eliminates the tip-credit provision of the 1968 orders and establishes premium pay for workers who split shifts. (s 4.)

(5) With certain exceptions, obliges employers to furnish uniforms and tools where such are required as a condition of employment. (s 9.)

(6) Increases the meal and lodging credit. (s 10.)

The association alleges numerous procedural errors were committed in issuing Order 5-76 which resulted from the commission's haste to get out the new orders. They also alleged substantive infirmities exist as a result of the arbitrary action of the commission. Specifically they allege: that due to its haste the commission drastically condensed and accelerated the procedures and failed to conduct a preliminary investigation of the industry as required by Labor Code section 1178; the commission ignored an explicit legislative directive that it avoid causing undue economic hardship; the order is arbitrary and irrational and denies the association due process and equal protection of the laws in several respects; Order 5-76 is preempted by federally mandated collective bargaining; and the commission failed to comply with the requirements of the California Environmental Quality Act in promulgating Order 5-76.

The association assigns as error the trial court's determination that Order 5-76 contained an adequate statement of basis as required by Labor Code section 1177.

Labor Code section 1177 provides: “The commission may make and enforce rules of practice and procedure and shall not be bound by the technical rules of evidence. Each order of the commission shall include a statement as to the basis upon which the order is predicated and shall be concurred in by a majority of the commissioners.” (Emphasis added.)

The last sentence to section 1177 was added by the Legislature in 1969. (Stats.1969, c. 1218, p. 2359, s 2.) As originally introduced the proposed language provided: “(A)ll orders of the commission to be supported by written findings concurred in by a majority of the commissioners.” (AB 1276 (1968).)

The amendment was enacted within a year following the decision of this court in Rivera v. Division of Industrial Welfare (1968) 265 Cal.App.2d 576, 588, 71 Cal.Rptr. 739, where this court stated the commission was not obligated to provide written findings in support of its orders.

The Assembly Committee Interim Report on the amendment to section 1177 observed: “(T)he committee found that the commission is responsible only for the promulgation of orders but not for any public justification of these orders. Indeed, at the 1967 promulgation, while some members of the commission used brief statements justifying their individual votes on the minimum wage, no general report on the reasons for the commission's actions was published.

“The committee believes that the public has a right to know the reasons for the laws which govern them. In addition, the committee believes that the ultimate necessity of publicly justifying their actions will have a salutory effect on the commission's entire process. Consequently, the committee recommends that the commission be required to accompany any new or revised order with written findings concurred in by a majority of the commissioners.”

Pursuant to the requirement of including a “statement (of) basis” in the order the commission plainly intended the first paragraph of Order 5-76 to suffice for this purpose.

That paragraph states as follows: “TAKE NOTICE: That pursuant to the Legislature's 1973 mandate to the Industrial Welfare Commission to review, update, and promulgate the regulations necessary to provide adequate and reasonable wages, hours and working conditions appropriate for all employees, and by virtue of the authority vested in the Commission by Sections 1171 through 1204 of the Labor Code of the State of California, and after investigation and findings pursuant to Section 1178 and after receiving recommendations from duly appointed wage boards, and after consideration of all written material and information submitted, and after public hearings duly held, notice of said hearings having been duly given in the manner provided by law, the Industrial Welfare Commission, upon its own motion has found and concluded that its Public Housekeeping Industry Order, Number 5-68, enacted on September 26, 1967 and its Minimum Wage Order 1-74 enacted on January 1, 1974, should be altered and amended.”

The commission argues this paragraph satisfies the requirements of section 1177 for a “statement (of) basis” of the order. It argues the change in language from “written findings” to “statement (of) basis” requires the commission merely to recite the statement of purpose or general objective as is sometimes included in legislation. Further, it argues if the Legislature had intended “findings” be attached to each order the Legislature would have expressly stated “findings” in light of prior court decisions such as Rivera, supra, and United Air Lines, Inc. v. Industrial Welfare Com. (1963) 211 Cal.App.2d 729, 753-754, 28 Cal.Rptr. 238.

The association on the other hand asserts the change in the amendment language merely assured the commission's reasons would appear in the order itself and that these reasons would establish the basis on which the commission had predicated that particular order.

We agree with the association. The Legislature intended, by amending section 1177, that the public be informed of the reasons behind the commission's actions, and that the public statement of basis have a beneficial effect on the entire process of issuing orders, perhaps by requiring the commission to be more reasoned in its actions. We note further the purported statement of basis differs little from statements contained in prior commission orders issued before the amendment to section 1177. A mere recitation of statutory authority, which is already expressly set out in the Labor Code, does not itself constitute a sufficient statement of basis within the legislative intent. Section 1177 requires the statement of basis “be concurred in by a majority of the commissioners.” This requirement would have little meaning unless it referred to the reasoning behind the commission's decisions. We will not presume the Legislature performed an idle act.

An instructive parallel exists in the Federal Administrative Procedure Act, 5 U.S.C.A. section 553, subdivision (c), which required that “After consideration of the relevant matter presented, the agency shall incorporate in the rules adopted a concise general statement of their basis and purpose.” Federal case law interpreting this requirement has held it requires a specific reasoned response to the evidence submitted and an explanation as to why the agency acted as it did in promulgating its rule. Thus, in Rodway v. United States Department of Agriculture (1975) 168 U.S.App.D.C. 387, 514 F.2d 809, Justice Skelly Wright stated for the court (168 U.S.App.D.C. at p. 395, 514 F.2d at p. 817): “The basis and purpose statement is not intended to be an abstract explanation addressed to imaginary complaints. Rather, its purpose is, at least in part, to respond in a reasoned manner to the comments received, to explain how the agency resolved any significant problems raised by the comments, and to show how that resolution led the agency to the ultimate rule. (Citations.).” (See also Natural Res. Def. Coun., Inc. v. Securities & Exch. Com'n (D.D.C.1974) 389 F.Supp. 689.)

We do not think our own Legislature intended the statement of basis to be an “abstract explanation addressed to imaginary complaints.” By insuring the commission publicly state the reasons for its actions the Legislature sought to encourage responsible commission action as well as to facilitate judicial review.

Accordingly, we shall reverse the judgment. For the guidance of the parties in the event of rehearing we also consider petitioner's remaining contentions.

The association contends the commission failed to conduct an investigation of the public housekeeping industry before selecting a wage board and beginning the process of revising its orders. Section 1178 of the Labor Code establishes the initial procedures for the adoption of regulations by the commission. It provides in part: “If after investigation the commission finds that in any occupation, trade, or industry, the wages paid to employees are inadequate to supply the cost of proper living, or that the hours or conditions of labor are prejudicial to the health, morals, or welfare of employees, the commission shall select a wage board to consider any of such matters. . . . The wage board shall report and make recommendations to the commission, including therein:

“(a) An estimate of the minimum wage adequate to supply the necessary cost of proper living to, and maintain the health and welfare of employees engaged in the occupation, trade, or industry in question.

“(b) The number of hours of work per day in the occupation, trade, or industry in question, consistent with the health and welfare of employees.

“(c) The standard conditions of labor in the occupation, trade, or industry in question, demanded by the health and welfare of employees.” (Emphasis added.)

Section 1173 states that it is the “continuing duty” of the commission to ascertain wages paid, and the hours and conditions of labor in the various industries. Section 1182 authorizes the commission to fix wages, hours of work and standard labor conditions after wage board conferences and public hearings. Section 1184 authorizes the commission to reconsider and revise existing orders at any time as long as it meets the same procedural requirements as prescribed above for original orders. Section 1204 declares that no order made under either section 1182 or 1184 shall be effective “unless and until” compliance is had with section 1178.

In considering the association's first contentions we must determine whether an “investigation” was performed within the meaning of section 1178. In interpreting the meaning of “investigation” in section 1178, we note with approval those considerations found important in California Grape etc. League v. Industrial Welfare Com. (1968) 268 Cal.App.2d 692, 74 Cal.Rptr. 313, wherein it was said (at p. 698, 74 Cal.Rptr. at p. 316):

“Remedial statutes such as those under consideration are to be liberally construed. (Citation.) They are not construed within narrow limits of the letter of the law, but rather are to be given liberal effect to promote the general object sought to be accomplished. (Citation.) It is fundamental that statutes are to be scrutinized in the light of the legislative intent. (Citation.) And if possible statutes will be so construed as to avoid absurd applications. (Citation.)

“Regulations and order of the Industrial Welfare Commission are presumed to be reasonable and lawful. (Citations.)” (Original emphasis.)

It appears that some form of investigation must be conducted before a wage board is convened. No case, however, has directly addressed the issue as to what constitutes an adequate investigation. The association asserts the commission was under great pressure due to recent judicial decisions attacking the 1974 orders and elected not to undertake a “full scale” preliminary investigation of the industry but instead “plunged directly into the appointment of wage boards.” It further asserts the wage board can only be convened after the commission, as a safeguard against arbitrariness, documents conditions in the industry which it finds to be inadequate. The association would also require the commission to make specific findings in this investigation regarding wages, hours and conditions of employment prior to convening the wage board. To this end it notes that neither the wage board “packets” containing information transmitted by the commission to the wage boards nor the remarks delivered to the boards by the commission at the initial meeting contain any instructions as to what the boards were to consider or what the commission found inadequate.

In United Air Lines, Inc. v. Industrial Welfare Com., supra, 211 Cal.App.2d 729, 28 Cal.Rptr. 238, the court overruled certain commission orders which were promulgated without the benefit of wage board recommendations. In doing so the court said (at p. 754, 28 Cal.Rptr. 238) section 1178 did not specifically require written findings of fact in order to start the procedure of referring the matter to the wage board. The court also stated (at pp. 753-754, 28 Cal.Rptr. at p. 251): “While the commission made no specific finding that the minimum wage then prescribed was inadequate or that any condition of labor was prejudicial to the welfare of the women employees, it would appear that such a specific finding is not necessary, as such finding is implied from the action taken by the administrative body. (Citations.)”

The United Air Lines court found (at p. 754, 28 Cal.Rptr. 238) the legislative intent of sections 1178, 1182 and 1184 was to insure that the commission did not issue or change orders without the advice of the wage boards. The boards, composed of those persons skilled in the particular industries, would presumably know from actual experience the need for and the effect of any regulation. This is a requirement even though the commission disregards the recommendations of the board, or the board fails to reach a majority recommendation. (California Grape etc. League v. Industrial Welfare Com., supra, 268 Cal.App.2d at p. 700, 74 Cal.Rptr. 313.)

In our case the commission issued no orders without having the benefit of the wage board recommendations. It is evident from these recommendations that the board was well aware of its responsibilities. The association cites no authority which would require the commission to document its investigation with formal findings and we find none.

In Rivera v. Division of Industrial Welfare, supra, 265 Cal.App.2d at pages 590-591, 71 Cal.Rptr. 739, this court observed that commission staff at the inception of statutory proceedings supplied wage boards with extensive study material, largely dealing with agricultural labor economics. Much of the material had been published by federal and state agencies, while other items emanated from chambers of commerce and educational institutions. We found the failure to incorporate such material into the record during subsequent commission hearings did not violate the procedural requirements.

The record in this case reveals the testimony of commission representatives concerning the commission's continuing investigation. All commissioners were sent a variety of publications, including labor market bulletins, reports from the Division of Labor Statistics and Research as well as reports on unionization and collective bargaining agreements.

The commission's statement of findings also reveals the commission's awareness that certain regulations in the 1974 orders had been declared invalid and the remaining regulations were “under a cloud”. As we noted earlier, the commission has a continuing duty to investigate and ascertain conditions of employment. We shall presume the duty was carried out.

We think the procedural safeguards against arbitrariness are not bound up in a requirement for any formal preinvestigation but rather in the requirements of wage board consideration and public hearings. (Lab.Code, ss 1173, 1178, 1182.) For these reasons we agree with the trial court's determination that the commission conducted an investigation which fully complied with the law.

The association contends the commission failed to heed the legislative mandate that it not cause undue hardship and employment loss in the industry. It is alleged that by failing to make a full and complete finding regarding the extent of the economic impact of Order 5-76, the commission violated its express legislative directive.

Labor Code section 1173 provides, in part, that the commission shall issue regulations that comply with the objectives of the chapter on wages, hours and working conditions. In amending section 1173 in 1973 the Legislature provided: “It is the intent of the Legislature in enacting this act that the Industrial Welfare Commission interpret these provisions in a manner which does not cause undue hardship and loss of employment opportunities in any segment of industry in California.'' (Stats.1973, ch. 1007, p. 2005, s 11.) Although the record shows the commission was aware of this obligation the association claims the record supports only the conclusion that it was not heeded. The association cites the testimony of employers' industry associations and chambers of commerce which was offered to show the asserted extreme adverse impact Order 5-76 has on the industry.

The commission found to the contrary and the record contains evidence to support the commission's finding, including a statement submitted by the AFL-CIO pointing out claims of unemployment ignored economic studies prepared by the government.

We are here considering a remedial statutory scheme, which requires liberal construction. (California Grape etc. League v. Industrial Welfare Com., supra, 268 Cal.App.2d 692, 74 Cal.Rptr. 313.) Regulations and orders of the commission are presumed to be reasonable and lawful. (Lab.Code, s 1200; United Air Lines, Inc. v. Industrial Welfare Com., supra, 211 Cal.App.2d at p. 750, 28 Cal.Rptr. 238.) There is a presumption that the commission performed its duty. (Rivera v. Division of Industrial Welfare, supra, 265 Cal.App.2d at p. 593, fn. 24, 71 Cal.Rptr. 739.)

In Rivera this court considered an attack on the commission alleging absence of any finding that a certain minimum wage was necessary to supply the necessary costs of proper living. We there stated: “These arguments misconceive the burdens undertaken by real parties in interest as well as the character of the Industrial Welfare Commission's statutory mandate. A reviewing court does not superimpose its own policy judgment upon a quasi-legislative agency in the absence of an arbitrary decision; rather, the review is limited to an examination of the proceedings to determine whether the action is arbitrary or entirely lacking in evidentiary support or whether the agency has violated the procedure required by law; in these technical matters requiring the assistance of experts and the collection and study of statistical data, courts let administrative boards and officers work out their problems with as little judicial interference as possible.” (265 Cal.App.2d at p. 594, 71 Cal.Rptr. at p. 755.)

The commission adopted its present orders: (1) as a part of its continuing investigation, (2) after having reference to its 1968 order and 1974 minimum wage order, (3) after wage board majority and minority reports were considered, (4) after six days of executive session, (5) after receipt of public comment and eight days of public hearings, (6) after three additional days of executive sessions to redraft the orders, and after consideration of petitions for rehearing.

As regards the weight of testimony in the record we again refer to Rivera where we said: “(M)ost such witnesses utter opinion and argument rather than recollection or narration, seeking to produce belief in ideas rather than proof of facts.” (265 Cal.App.2d at p. 590, 71 Cal.Rptr. at p. 752.) The evidentiary base for the commission's action was judgmental as well as factual or statistical. The commission was required to arrive at concrete judgments based on a relatively indeterminate statutory standard; what was undue hardship was a judgmental as well as factual decision. Raising the minimum wage may create hardships on employers; however, the commission is required to consider the interests of both employer and employee. (See California Grape etc. League v. Industrial Welfare Com., supra, 268 Cal.App.2d at p. 701, 74 Cal.Rptr. 313.)

If reasonable minds may differ as to the wisdom of specific commission action, such action is conclusive. (See Action Trailer Sales, Inc. v. State Bd. of Equalization (1975) 54 Cal.App.3d 125, 133, 126 Cal.Rptr. 339.) We think the commission's decision as to what was “undue,” was in an area of reasonable administrative discretion. We do not think its decision was arbitrary or lacking in evidentiary support. (See California Assn. of Nursing Homes etc., Inc. v. Williams (1970) 4 Cal.App.3d 800, 810, 84 Cal.Rptr. 590.) The order has been in effect since October 18, 1976. The burden of demonstrating undue hardship and employment loss is upon the association. This burden has not been met.

The association contends the commission acted arbitrarily, capriciously and without evidentiary support in promulgating Order 5-76 thereby violating the due process and protection clauses of the federal and California Constitutions. Specifically, it is contended the public housekeeping industry was not provided with exemptions from regulations concerning hours and days of work as were other industries; that the commission failed to treat tipped and nontipped employees differently for purposes of fixing the minimum wage; and the reduction to a 40-hour week followed by overtime disregards the unusual economic conditions in the motel and hotel industry.

California decisions on the scope of judicial review of administrative regulations have consistently inquired as to whether the action is arbitrary, capricious or so entirely lacking in evidentiary support as to warrant judicial interference. (See Pitts v. Perluss (1962) 58 Cal.2d 824, 834-835, 27 Cal.Rptr. 19, 377 P.2d 83; Rivera, supra, 265 Cal.App.2d at p. 594, 71 Cal.Rptr. 739.) In light of the constitutional attack by the association we also note the review found applicable by the California Supreme Court in the agricultural labor access rule case: “At the outset we take note of certain principles which govern our consideration of the matter; although these rules have been often restated, it would be well to remember that they are not merely empty rhetoric. First, our task is to inquire into the legality of the challenged regulation, not its wisdom. (Citation.) Second, in reviewing the legality of a regulation adopted pursuant to a delegation of legislative power, the judicial function is limited to determining whether the regulation (1) is ‘within the scope of the authority conferred’ (Gov.Code, s 11373) and (2) is ‘reasonably necessary to effectuate the purpose of the statute’ (Gov.Code, s 11374). Moreover, ‘these issues do not present a matter for the independent judgment of an appellate tribunal; rather, both come to this court freighted with the strong presumption of regularity accorded administrative rules and regulations.’ (Citation.) And in considering whether the regulation is ‘reasonably necessary’ under the foregoing standards, the court will defer to the agency's expertise and will not ‘superimpose its own policy judgment upon the agency in the absence of its arbitrary and capricious decision.’ (Citation.)” (Agricultural Labor Relations Bd. v. Superior Court (1976) 16 Cal.3d 392, 411, 128 Cal.Rptr. 183, 195, 546 P.2d 687, 699.)

With this standard in mind we turn to the association's contentions in this area.

The association asserts that when the commission exempted collective bargaining agreements from the overtime requirements of some orders but not Order 5-76, it discriminated against collective bargaining in the public housekeeping industry.

The record does show exemptions were granted to certain industries subject to regulation concerning hours and days of work when collective bargaining agreements were considered strong and covered the same subjects.

The association claims discrimination in the commission's failure to consider the relative strength of that portion of the public housekeeping industry which is unionized; that the commission failed to take affirmative steps to ascertain this strength and as a result acted arbitrarily.

The commission made findings that collective bargaining agreements in some industries were balanced by contract provisions improving employee welfare in other ways. The record shows the percentage of unionization in the restaurant and hotel business was only 25 percent. With the exception of Order 4 (covering certain clerical, professional, technical and mechanical occupations), the public housekeeping industry had the highest number of overtime pay violations. Testimony was also received from employees concerning the working conditions in the industry.

The exemption language used in the other orders states that it only applies where the employer “is obligated to provide premium wage rates for overtime work and to regulate the number of hours of work pursuant to a written collective bargaining agreement . . . .” The public housekeeping industry regularly avoided paying overtime by working employees 46 hours per week on a straight time basis.

We think the record clearly shows the refusal to exempt the public housekeeping industry may have been “reasonably necessary” to effectuate its obligation to protect the employees' welfare. The commission recognized that not all the industries were identical. The Legislature recognized this same fact by requiring separate wage boards for the various industries. Whether the commission could have segmented each industry and grant exemptions to that portion which is covered by collective bargaining agreements is beyond our review. We will only set aside a classification if no grounds of justification can be conceived. (Blumenthal v. Board of Medical Examiners (1962) 57 Cal.2d 228, 233, 18 Cal.Rptr. 501, 368 P.2d 101.)

We do not think the practical considerations and problems confronting the commission required it to grant such segmented exemptions as the association suggests. We conclude the decision not to grant exemptions to the public housekeeping industry in Order 5-76 transgresses no constitutional command.

The association makes several attacks on the commission's decision to eliminate the tip-credit allowance. First, it asserts that Labor Code section 351 does not eliminate the commission's authority or obligation to consider tips in fixing minimum wage categories and the failure to do so was based on a misconception that the Legislature removed the authority to do so when it amended section 351. Second, the association asserts that however section 351 is construed, legislation eliminating this authority would itself be arbitrary and irrational.

The commission added a tip-credit allowance for the first time in the 1968 revision of Order 5. In the present orders, however, this provision was eliminated. The commission did so because “the Legislature specifically revoked the authority it had earlier given the (commission) to allow credit for tips against the minimum wage, when it amended Section 351 of the Labor Code this year.”

Section 351 reads, in part, as follows: “No employer or agent shall collect, take, or receive any gratuity or a part thereof, paid, given to or left for an employee by a patron, or deduct any amount from wages due an employee on account of such gratuity, or require an employee to credit the amount, or any part thereof, of such gratuity against and as a part of the wages due the employee from the employer. Every such gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.”

The association admits this legislation does prohibit the commission from granting direct tip credits; however, it argues section 351 did not remove the commission's general authority to distinguish between tipped and nontipped employees when fixing appropriate minimum wages for different categories of employees. The association suggests the commission could establish a new category of “Tipped Employees” and then fix a lower minimum wage by taking their tips into account. It cites for authority Rivera where we said the commission could recognize the “availability of nonwage benefits” in setting the minimum wage. (265 Cal.App.2d at p. 595, 71 Cal.Rptr. 739.) It would classify tips as “non-wage benefit(s).” While admitting that the Legislature wanted to eliminate tip credits, the association presents various arguments for a tip credit.

We cannot find that the Legislature intended section 351 to be interpreted in such a way as to allow the commission the authority to do indirectly what it was prohibited from doing directly. We therefore think the commission properly interpreted section 351 by not including tip credit provisions in Order 5-76.

It is urged that however section 351 is construed, the failure to distinguish between tipped and nontipped employees for the purposes of fixing the minimum wage violates substantive due process and the equal protection clauses of the federal and state Constitutions.

The association claims it is “wholly irrational” to establish the minimum wage of tipped employees at the same level as nontipped employees, as it gives tipped employees a “windfall” at the expense of their employer. The association then asserts this practice will cause increased costs and the likelihood of layoffs and business failures.

We fail to see any denial of equal protection or due process. The equal protection clause in economic cases such as this guarantees that persons similarly situated receive equal treatment. (In re Kotta (1921) 187 Cal. 27, 31, 200 P. 957.) In this respect, all employers are subject to the provisions of section 351. Furthermore, any increased costs which result are, as testified by representatives of the association, ultimately passed on to the customer. Regarding the wisdom of the legislation we note the record reveals many employee benefits such as vacation pay, disability, retirement and unemployment benefits are based solely on wages and do not include tips. There is also the practice of requiring employees to pool their tips. As the California Supreme Court stated in upholding the disallowance of a tip credit: “If the employees may be induced, and in effect coerced, by fear of dismissal by an employment contract requiring the tips to be counted as part of the minimum wage, to report their tips as equal to the minimum wage even though they are not, the minimum wage requirement is seriously undermined. By indirect method they would be forced into a position of receiving less than the standard fixed.” (Cal. Drive-in Restaurant Assn. v. Clark (1943) 22 Cal.2d 287, 298, 140 P.2d 657, 663.) Whether the commission or the Legislature could have used other means to ensure the employee receives the full benefit of his employment is not for us to decide. We find the method used that of disallowing the tip credit is not violative of equal protection and is rationally related to the welfare of the employee.

The association's last constitutional attack concerns section 3(A) of Order 5-76 which reduced the straight time workweek from 46 to 40 hours, so that for any time worked in excess of eight hours per day or 40 hours per week, an employer must pay overtime rates. It is contended this shorter workweek contravenes a long practice of 46- or 48-hour weeks without overtime in the public housekeeping industry and disregards the unusual economic conditions in the industry and as a result violates due process and equal protection. The association points to the seasonality and workload variability characteristics of the industry. It asserts the erratic nature of employment should enable employers to take full advantage of employee availability without being penalized with “lids” on the number of hours employees can work without overtime pay.

We note the commission exempted certain other industries from the 40-hour requirement. Carnival ride operators were so exempted based on their unusual working hours and conditions. The commission also established a 60-hour workweek and 10-hour workday in the agricultural industry based on the seasonal nature of the work. However, we think denial of an exemption for the public housekeeping industry was based on rational decisions and is not constitutionally infirm. The 40-hour provision was recommended by a majority of the wage board members. The minority report based its objection on the conflict between the Fair Labor Standards Act provisions for overtime in the public housekeeping industry and those of the commission. In 1977, however, Title 29, U.S.C. section 213 was amended to provide that on January 1, 1979, a 40-hour workweek followed by overtime will be imposed upon the public housekeeping industry.

The commission did provide flexibility in hours worked by adding a new provision allowing employers and employees (by agreement) to work four 10-hour days per week. Such an alternative was urged by many who appeared before the commission. Furthermore, an employee may work seven days in one workweek with no overtime when total employment does not exceed 30 hours in any one workweek or six hours in any one workday. The association has made no showing that employees in the public housekeeping industry cannot be satisfactorily utilized given these alternatives. We do not think the commission's decision is lacking in evidentiary support in this respect and therefore we find this contention without merit.

The association contends that federal labor law has preempted certain areas of the commission's authority. Specifically, the association refers to the National Labor Relations Act (NLRA), 29 U.S.C. s 151 et seq., and asserts that since many employers in the public housekeeping industry have fulfilled its policy by collective bargaining agreements, any order which conflicts with these agreements interferes with the NLRB policy. For instance, it would find invalid: the tip credit, the provision for tools and uniforms, the workweek requirement, kitchen facilities and changing room provisions, and the overtime pay requirement. The association argues that any state attempt to influence the substantive terms of collective bargaining agreements is inconsistent with the federal regulatory scheme and is thus preempted except where minimal health and safety standards are involved. In short, the association would contend that once there is a collective bargaining agreement pursuant to the federal mandate, the state is preempted from promulgating any regulation in conflict with the terms of those agreements.

Preemption is primarily a matter of congressional intent. (Rivera v. Division of Industrial Welfare, supra, 265 Cal.App.2d at p. 602, 71 Cal.Rptr. 739.) The federal courts have uniformly held that federal preemption should not be presumed absent a clear manifestation of an intent by Congress to preempt. (Associated Gen. Contractors of Mass., Inc. v. Altshuler (1st Cir. 1973) 490 F.2d 9, 15; Double-Eagle Lubricants, Inc. v. State of Texas (N.D.Tex.1965) 248 F.Supp. 515, 517.) A look at the policy declaration in section 151 of the NLRA shows the intent to foster the collective bargaining process to “eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.” (Emphasis added.)

The principal cases on this subject deal with state attempts to regulate directly unions or the bargaining process itself. (LOCAL 24 OF I. B. OF T., C., W. H. H. v. Oliver (1959) 358 U.S. 283, 295, 79 S.Ct. 297, 304, 3 L.Ed.2d 312, 320-321; Machinists v. Wisconsin Emp. Rel. Comm'n. (1976) 427 U.S. 132, 155, 96 S.Ct. 2548, 2560, 49 L.Ed.2d 396, 412; see also Hanna Min. Co. v. District 2, M. E. B. A. (1965) 382 U.S. 181, 86 S.Ct. 327, 15 L.Ed.2d 254; International Bro. of Op. Potters v. Tell City Chair Co. (S.D.Ind.1968) 295 F.Supp. 961.) We find no language which suggests the states lack authority to set basic minimum working conditions. As set forth in section 157 of the NLRA: “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .” The commission's order in no way infringes on these rights.

As we stated in Rivera v. Division of Industrial Welfare, supra, 265 Cal.App.2d at page 604, 71 Cal.Rptr. at page 761: “The contention that the National Labor Relations Act forms one of the components of a ‘COMPREHENSIVE FEDERAL PLAN’ DESIGNED TO OUST state regulation flies in the face of contrary judicial declarations.”

This issue has recently been considered in Farmer v. Carpenters (1977) 430 U.S. 290, 97 S.Ct. 1056, 51 L.Ed.2d 338. There the court observed that while preemption can occur with respect to state-regulated union activities or unfair labor practices, preemption does not result merely because of the existence of the NLRA: “because Congress has refrained from providing specific directions with respect to the scope of pre-empted state regulation, the Court has been unwilling to ‘declare pre-empted all local regulation that touches or concerns in any way the complex interrelationships between employees, employers, and unions . . . .’ (Citations.)” (Id. at pp. 295-296, 97 S.Ct. at p. 1061, 51 L.Ed.2d at p. 347.)

The association cites no authority which directly invalidates a state attempt to regulate working conditions or hours worked due to federal preemption by the NLRA. Setting minimum working conditions and hours of work by the commission in no way impinges on the federal mechanism for resolving labor disputes.

In summation, although state regulations designed to protect state employees must give way to paramount federal legislation, we do not find the Congress, in enacting the NLRA, intended to oust state authority to regulate the working conditions covered by Order 5-76. Only a demonstration of complete ouster of state power would justify that conclusion. The association has not made that demonstration. Our independent review does not reveal any specific indication in either the wording or legislative history of the NLRA that Congress intended to preclude state regulation here. Accordingly, we find no preemption.

The association's last attack is that, in promulgating Order 5-76, the commission failed to follow the procedural requirements of the California Environmental Quality Act (CEQA).

It is neither necessary nor proper for us to address the issue of whether the commission properly complied with the procedural requirements of CEQA or whether it was in fact required so to comply. The association is barred from attacking the commission's determination by the 30-day time limitations in Public Resources Code section 21167, subdivisions (b) and (e).

The commission filed a notice of determination with the Secretary of the Resources Agency on August 5, 1976. This present action was filed on November 24, 1976, well after the required 30 days to do so. The association contends, however, that the notice was not filed “as required” because of alleged procedural infirmities and therefore the 180-day period of section 21167, subdivision (d), should apply. Whether or not the notice of determination was procedurally defective is the very type of attack barred by the 30-day limit.

The judgment is reversed and the case is remanded to the trial court with directions to grant the petition for mandate and order the commission to vacate Order 5-76.

FOOTNOTES

1.  Certain orders of the commission were declared invalid in 1975 because of procedural defects (see Henning v. Industrial Welfare Comm., 22 W.H. Cases 225 (S.F., Super.Ct.1975), and in June 1975 the commission voted to and did review all pertinent existing orders.

REGAN, Associate Justice.

PUGLIA, P. J., and EVANS, J., concur.