Existing law, with certain exceptions, establishes 8 hours as a days work and a 40-hour workweek, and requires payment of prescribed overtime compensation for additional hours worked. Existing law authorizes the adoption by ²/₃ of employees in a work unit of alternative workweek schedules providing for workdays no longer than 10 hours within a 40-hour workweek.

This bill would permit an individual nonexempt employee to request an employee-selected flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek, and would allow an employer to implement this schedule without the obligation to pay overtime compensation for those additional hours in a workday, except as specified. The bill would require that the flexible work schedule contain specified information and the employers and the employees original signature. The bill would also require the Division of Labor Standards Enforcement in the Department of Industrial Relations to enforce this provision and adopt regulations.

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Tony Thurmond, Chair

ABPCA Bill Id:AB 2482 (

Author:Voepel) – As Introduced Ver:February 14, 2018

SUBJECT: Employment: flexible work schedules

SUMMARY:

1. Permits an individual nonexempt employee to request an employee-selected flexible work schedule providing for workdays up to ten hours per day within a 40-hour workweek, and would allow an employer to implement this schedule without the obligation to pay overtime compensation for those additional hours in a workday, except as specified.
2. Requires that the flexible work schedule contain specified information and the employer’s and the employee’s original signature.
3. Requires the Division of Labor Standards Enforcement (DLSE) in the Department of Industrial Relations (DIR) to enforce this provision and adopt regulations.

EXISTING LAW:

1. Establishes eight hours as a day’s work and a 40-hour workweek, and requires payment of prescribed overtime compensation for additional hours worked.
2. Authorizes the adoption by ²/₃ of employees in a work unit of alternative workweek schedules providing for workdays no longer than ten hours within a 40-hour workweek.

FISCAL EFFECT: Unknown

COMMENTS: The author argues, “a majority of the workforce is on a traditional fixed schedule (e.g. eight hours per day, 40 hours per week) during normal business hours, making it difficult to accomplish important errands such as doctor appointments, visiting the DMV, children’s school obligations, etc. Employees often struggle to maintain a healthy work-life balance, either sacrificing occupational productivity or personal commitments.”

The author points to a 2015 Employee Job Satisfaction and Engagement report from the Society for Human Resource Management which found, “55 percent of employees cited schedule flexibility as one of the top factors contributing to job satisfaction, which is ten percent higher than the previous year. Flexible work week arrangements offer an alternative from the nine to five, Monday through Friday schedule, allowing employees time during the week to attend to health care and other needs.”

History of Overtime Protections Under California Law

The California Industrial Welfare Commission (IWC) was established in 1913 by the California Legislature to regulate minimum wages, maximum hours of work, and standards for working conditions for women and minors. California was the ninth State to create a commission to protect the welfare of working women and minors. In 1916, the IWC issued its first wage order, setting the minimum wage rate at 16 cents an hour for the fruit and vegetable canning industry, with pay of one and a quarter of minimum after ten hours, a limit of 72 hours a week, and improved sanitary conditions. A few years later the IWC reduced the maximum hours to eight hours a day and 48 hours a week.

By the sixties, the IWC faced ongoing legal challenges to its Orders, especially over the issue of regulations only for women. In Rosenfield vs. Southern Company, the federal court ruled that Rosenfield had been denied a promotion due to the state’s laws limiting the hours of employment and the amount of weight a woman was allowed to lift. This ruling cited the Civil Rights Act of 1964. Similar findings led to the Legislature extending the IWC’s powers to include men in 1973.

Throughout the next decade orders received greater scrutiny and were often under contention, usually based on whether IWC procedures were properly followed. During the eighties and nineties the IWC faced conflicting issues over standard work weeks and daily overtime. In 1997 after the IWC changed from requiring overtime pay after eight hours in any day to overtime only after 40 hours in one week, the Legislature revoked funding for the IWC.

In 1999, the legislature passed and the Governor Davis signed AB 60 (Knox) Chapter 134, Statutes of 1999, which established a framework for the payment of daily overtime compensation. That framework included: time and one-half pay after eight hours of daily work; personal time off for a personal obligation of an employee which may be made up during a workweek without payment of overtime compensation within specified limits; and, the adoption through an employee election of an alternative work week schedule or menu of schedules offered by an employer. That year, the Governor also reinstated the IWC. The IWC remained in operation until July 2004, when its funding was again eliminated from the state budget. Though the IWC is currently not in operation, the DLSE continues to enforce the provisions of the wages orders issued by the IWC.

Scheduling Flexibility Under Current Law

As noted above, AB 60 contained several features related to flexibility in employee work schedules. First, it provided for the adoption of alternative workweek schedules pursuant to an employee election. The alternative workweek schedule may authorize the employees to work no more than ten hours per day within a 40-hour workweek without receiving overtime. Such an alternative schedule must be adopted in a secret ballot election by at least two-thirds of the affected employees.

Labor Code Section 511(a) also provides that, "The regularly scheduled alternative workweek proposed by an employer for adoption by employees may be a single work schedule that would become the standard schedule for workers in the work unit, or a menu of work schedule options, from which each employee in the unit would be entitled to choose."

Moreover, Section 3(C)(1) of the IWC Wage Orders states: "If the employer proposes a menu of work schedule options, the employee may, with the approval of the employer, move from one menu option to another."

Section 3(B)(1) of the IWC Wage Orders provides that, "Nothing in this section shall prohibit an employer, at the request of the employee, to substitute one day of work for another day of the same length in the shift provided by the alternative workweek agreement on an occasional basis to meet the personal needs of the employee without the payment of overtime."

Section 3(C)(2) of the IWC Wage Order also provides that the term "affected employees in the work unit" may include all employees in a readily identifiable work unit, such as a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision of any such work unit. A work unit may consist of an individual employee as long as the criteria for an identifiable work unit are met.

In addition, AB 60 allowed employees to take off time for a personal obligation and makeup that time during the same workweek without payment of daily overtime. Labor Code Section 513 provides that, if an employer approves a written request, an employee may makeup work time during the same workweek without incurring daily overtime, except for hours in excess of 11 in one workday.

Finally, AB 60 contained an overtime exemption for employees covered by a valid collective bargaining agreement if the agreement expressly provides for wages, hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all overtime hours worked and a regularly hourly rate of pay at least 30% above the state minimum wage.

Arguments in Support

The California State Council of the Society for Human Resources Managers (CalSHRM) writes in support that the approach embodied by this bill, “would modernize California’s wage and hour laws and simply afford individual employees the same ‘choice’ exempt or unionized employees presently enjoy, while preserving the general daily overtime law.” They continue, “this is a balanced approach that would preserve daily overtime generally, but would enable other employees the option to select a different work schedule consistent with their individual needs.” This CalSHRM says would make California’s alternative workweek schedules more consistent with that provided under laws in Nevada and Alaska.

The Society for Human Resource Managers argues that this measure, “would positively impact both employees and employers who wish to embrace workplace flexibility. In addition, the legislation would result in both traffic and environmental benefits for our state due to reduced commuting schedules, foster stronger parent involvement in their child’s education by allowing employees the opportunity to meet their work and life responsibilities and needs, while also improving the physical and mental health of California’s private, nonexempt employees.”

Arguments in Opposition

The California Labor Federation writes in opposition that this bill undermines the fundamental right to an eight-hour day. They assert the current overtime protections that requires employers to pay time and a half regular wages for all hours worked over eight in a day or 40 in a week ensure “that long hours are compensated adequately while allowing employers to require work in excess of a standard work day or week – striking a balance between a worker’s right to fair wages and an employer’s need to meet deadlines with existing staff.”

They argue that, “Employers who seek flexibility beyond that allowed by current law can also take advantage of California’s alternative work week schedule process, outlined in Labor Code Section 511. For example, should an employer want to move employees from a standard work week to four ten-hour days, that employer can hold an election to determine whether or not employees would actually prefer such a change.”

Prior and Related Legislation

AB 1173 (Harper) of 2017 would have allowed during the holiday season, November through January, at the request of an individual nonexempt employee working in the retail industry, and upon employer approval, an employee-selected flexible work schedule providing for workdays up to ten hours per day within a 40-hour workweek. The measure failed in this Committee.

AB 1038 (Jones) of 2015 would have authorized individual employees to request flexible work schedules, as specified and failed passage in this Committee.

AB 2448 (Jones) of 2014 was nearly identical to AB 1038 and failed passage in this Committee.

AB 907 (Conway) of 2014 was nearly identical to AB 1038 and failed passage in this Committee in January 2014.

SB 607 (Berryhill) of 2013 was nearly identical to AB 1038 and failed passage in the Senate Committee on Labor and Industrial Relations.

AB 830 (Olsen) of 2011 was nearly identical to AB 1038 and failed passage in the Assembly Committee on Labor and Employment.

SB 367 (Dutton) of 2011 would have permitted an individual nonexempt employee employed by an employer with 25 or fewer employees to request an employee-selected flexible work schedule providing for workdays up to ten hours per day within a 40-hour workweek, and would have allowed the employer to implement this schedule without any obligation to pay overtime compensation. SB 367 failed passage in the Senate Labor and Industrial Relations Committee.

SB 378 (Dutton) of 2011 would have provided that an alternative workweek schedule adopted pursuant to existing law may include a regularly scheduled alternative workweek that authorizes work by the affected employees for more than ten hours a day, as long as the employees are paid at the appropriate overtime rate. The bill further would have exempted from current law employers with five or fewer employees, but would have permitted such employers and their employees to voluntarily enter into a revocable written agreement setting forth an alternative workweek schedule that allows an employee to work up to ten hours a day, 40 hours a week, without the payment of overtime wages. Testimony was taken on SB 378 in the Senate Labor and Industrial Relations Committee, but a vote was not taken.

AB 60 (Knox) Chapter 134, Statutes of 1999 established a framework for the payment of daily overtime compensation: time and one-half pay after eight hours of daily work; personal time off for a personal obligation of an employee which may be made up during a workweek without payment of overtime compensation within specified limits; and, the adoption through an employee election of an alternative work week schedule or menu of schedules offered by an employer.

REGISTERED SUPPORT / OPPOSITION:

Support

Acclamation Insurance Management Services

Allied Managed Care

Associated Builders and Contractors, Inc. – Northern California Chapter

Bay Area Executives Council

California Ambulance Association

California Apartment Association

California Beer and Beverage Distributors

California Building Industry Association

California Business Properties Association

California Chamber of Commerce

California Farm Bureau Federation

California Framing Contractors Association

California Grocers Association

California Independent Oil Marketers Association

California League of Food Processors

California Manufacturers and Technology Association

California Restaurant Association

California Retailers Association

California Special Districts Association

Central California SHRM

Central Coast HR Association

Central Valley HR Management Association

Family Business Association of California

Flasher Barricade Association

HR Association of Central California

Inland Empire Society for HR Association Management

Kem County Society for Human Resource Management

National Federation of Independent Business

Northstate SHRM

Official Police Garages of Los Angeles

Professionals in Human Resources Association

Sacramento Area HR Association

San Diego Society of Human Resource Management

San Gabriel Valley Economic Partnership

San Joaquin Human Resource Association

Santa Barbara HR Association

SHRM Northern California

SHRM of Tulare/Kings County

Sierra Human Resources Association

Society for Human Resource Management (SHRM)

Southern California Wine Country SHRM

Southwest California Legislative Council

The California State Council of SHRM

United Chamber Advocacy Network

Opposition

ACLU of California Center for Advocacy & Policy

American Federation of State, County and Municipal Employees

CA Conference Board of the Amalgamated Transit Union

CA Conference of Machinists

California Employment Lawyers Association

California Labor Federation, AFL-CIO

California Teamsters Public Affairs Council

Consumer Attorneys of California

Engineers & Scientists of CA, Local 20

International Longshore and Warehouse Union

Professional & Technical Engineers, Local 21

UNITE-HERE

Utility Workers Union of America

Analysis Prepared by: Jennifer Richard / L. & E. /