BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: May 11, 2011 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:No
Urgency: No
Bill No: SB 378
Author: Dutton
Version: As introduced February 15, 2011
SUBJECT
Employment: alternative workweek schedules
KEY ISSUE
Does the Legislature need to provide further clarity on what
constitutes a "regularly scheduled" alternative workweek?
Should an alternative to the existing workplace election
procedure for electing a particular workweek schedule be
established that would allow an employer with five or fewer
employees to voluntarily enter into a written agreement with
their employees?
Should the Legislature establish a different policy on
alternative workweek scheduling for small employers?
PURPOSE
To specify what would be considered a regularly scheduled
alternative workweek and to exempt specified small employers
from the alternative workweek election provisions in current
law.
ANALYSIS
Existing law, with certain exceptions, defines a day's work as
eight hours of labor. Any additional hours worked in excess of
eight hours in one day, as specified, must be compensated with
the payment of overtime.
Under existing law, the payment of overtime compensation is as
follows:
§ Any work in excess of eight hours in one workday, any
work in excess of 40 hours in any one workweek, and the
first eight hours worked on the seventh day of work in any
one workweek shall be compensated at the rate of no less
than one and one-half times the regular rate of pay for an
employee;
§ Any work in excess of 12 hours in one day shall be
compensated at the rate of no less than twice the regular
rate of pay for an employee;
§ Any work in excess of eight hours on any seventh day of
a workweek shall be compensated at the rate of no less than
twice the regular rate of pay of an employee.
Existing law provides that the standard requirements for the
payment of overtime compensation do not apply where:
a) An employee submits a written request to make up work
time that would be lost as a result of a personal
obligation of the employee if the make-up work time is
performed in the same workweek in which the work time was
lost. Such make-up work time may not be counted towards
computing the total number of hours worked in a day.
b) An alternative workweek schedule has been adopted
pursuant to Labor Code Section 511. Under this procedure,
an employer may propose an alternative workweek for no
longer that 10 hours per day within a 40-hour workweek and,
if it is approved, the employer is not required to pay
overtime compensation for such a work schedule. The
employer must specify the workers in a work unit and
conduct a secret ballot election. If two-thirds of the
workers in the work unit approve, the new workweek is
deemed adopted. The employer is required to make a
reasonable effort to find a work schedule not to exceed
eight hours for a worker unable to work the alternative
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schedule. An affected employee working longer than eight
hours but not more than 12 hours in a day pursuant to an
alternative workweek schedule, shall be paid a specified
overtime rate of compensation.
c) Employees have adopted an alternative workweek schedule
pursuant to a 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 regular hourly rate of pay for those employees of not
less than 30 percent more than the state minimum wage.
d) An alternative workweek schedule is inapplicable because
the work relates to cases of emergency or the protection of
life or property, to the movement of trains, or to certain
hardship exceptions as specified by the Chief of the
Division of Labor Standards Enforcement.
This Bill would provide that an alternative workweek schedule,
adopted pursuant to the alternative workweek provisions, may
include a regularly scheduled alternative workweek that
authorizes work by the affected employees for more than 10 hours
a day, as long as the employees are paid at the appropriate
overtime rate as required by law.
Specifically, this bill would:
Define the term "regularly scheduled" to mean the
employee is scheduled to work the same number of workdays
and the same number of hours per workday as the work
schedule or schedules adopted through the election.
Provide that an alternative workweek schedule is valid
even if the actual days scheduled and the start and end
times of each shift change from one week to the next.
Exempt employers with 5 or fewer employees from the
alternative workweek election provisions and instead would
allow those employers to voluntarily enter into a written
agreement with their employees that:
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o Sets forth an alternative workweek schedule
that allows an employee to work up to 10 hours a day,
40 hours a week, without the payment of an overtime
rate;
o Sets forth specified overtime rates for excess
hours and days worked; and
o Specifies that the agreement must provide an
opportunity for either party to revoke it.
COMMENTS
1. Need for this bill?
Over the past several years, the issue of an alternative
workweek schedule has been the subject of discussion in both
Senate and Assembly Committees. Similar versions of this bill
have been introduced every year since 2005. In most cases,
the need for flexibility in the scheduling of workweeks has
come from employers making the argument on behalf of their
businesses and their employees, but much less frequently do we
hear from employees themselves articulating their reasoning
for wanting more flexible working hours.
Some employers see an advantage to be gained in reduced
overhead costs (through energy savings, etc.) by adopting an
alternative workweek, and some may wish to accommodate their
employees' wishes to reduce their commuting hours. For this
purpose, and only for small employers with 5 or fewer
employees, this bill would allow employers to voluntarily
enter into a written agreement with their employees on an
alternative workweek, as specified, instead of having to
conduct a secret ballot election as is currently required by
law. In addition, this bill would specify that a regularly
scheduled alternative workweek can consist of more than 10
hours a day, as long as they are paid the appropriate overtime
rate of compensation as required by current law. This bill
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would also provide that an alternative workweek schedule is
valid even if the actual days scheduled and the start and end
times of each shift change from one week to the next.
2. How many California employers have established an alternative
workweek schedule?
The Division of Labor Statistics and Research, under the
Department of Industrial Relations, provides on their website
a database listing all California employers that have filed
alternative workweek election results with the division
pursuant to Labor Code § 511(e). According to the database,
there are currently 20,607 employers that have successfully
established an alternative workweek for their employees. Last
year when this Committee heard similar bill proposals, there
were 18,844 employers that had successfully established an
alternative workweek schedule.
*Note: The DLSR list contains employers with multiple
locations.
3. Proponent Arguments :
Proponents argue that this bill provides three significant
benefits for employers and employees with regard to
alternative workweek schedules: 1) flexibility with the
implementation of an adopted alternative workweek schedule; 2)
confirmation of the number of hours per day that may be
included as a part of an alternative workweek schedule; and 3)
eliminating the administrative cost and burden on small
employers from conducting a secret ballot election.
According to proponents, pursuant to Labor Code Section 511,
in order to remain valid, an alternative workweek schedule
must be "regularly scheduled." Proponents argue that this
bill defines that term in a reasonable manner to clarify that
the combination of days and hours adopted as the alternative
workweek schedule through the secret ballot election, such as
a four, ten-hour days a week, must remain consistent, but the
actual days the schedule falls upon does not. For example, if
the four, ten-hour days are scheduled Monday through Thursday,
but an employee has a sick child at home on Wednesday and
would like to switch that workday to Friday, this bill,
proponents contend, would allow the employer to adjust the
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schedule accordingly. Overall, proponents argue that the
definition of "regularly scheduled" provided by this bill,
allows employers the flexibility to accommodate unexpected
changes in an employee's schedule that require the employee to
change his/her schedule with limited notice, as well as to
adjust for changing business needs.
Finally, proponents argue that this bill would also exempt
small employers with five employees or less from incurring the
administrative cost and burden of conducting an election for
the adoption of an alternative workweek schedule. Proponents
believe that employers with such few employees should be able
to negotiate through a written agreement, revocable by either
party, the daily/weekly schedule that satisfies the needs of
both the employee(s) and the employer.
4. Opponent Arguments :
According to opponents, this bill would undermine the
fundamental right to the eight-hour day for California workers
under the guise of increased flexibility. Opponents argue that
current law was carefully crafted to ensure adequate
flexibility for employers and employees while protecting the
basic right to overtime. Employers who want to institute an
alternative workweek schedule can either negotiate one through
collective bargaining or conduct an employee election. In
addition, opponents argue that employees who need an
occasional schedule change can request make-up time, allowing
them to leave early one day and work late the next without
accruing overtime.
Opponents argue that the process set forth in current law is
not a complicated or burdensome one; in fact, its provisions
are the result of Labor-Management discussions at the
Industrial Welfare Commission to establish terms that both
sides thought were fair and workable. Opponents also argue
that the alternative workweek election process is largely in
the hands of the employer who has sole discretion over whether
or not to conduct an election, and what schedule to make
available. According to opponents, this bill would replace a
system of carefully crafted protections by giving small
employers the right to negotiate alternate schedules one
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Senate Committee on Labor and Industrial Relations
individual employee at a time without establishing any
criteria and nothing to prevent employers from awarding
desirable schedules to employees based purely on favoritism.
Additionally, opponents are concerned that there would be no
protection for workers who feel pressured to waive daily
overtime because the workplace election would be replaced by a
one on one discussion with the boss.
Lastly, opponents are concerned that defining the phrase
"regularly scheduled" as this bill does, would mean an
employer would need to comply with the election outcome only
as to the number of days per week and the number of hours per
workday, while retaining total discretion to unilaterally
change, from week to week, which particular days an employee
is required to work as well as which times an employee is
required to start and end work. Opponents believe that this
bill makes a mockery of workers' overtime rights.
5. Prior or Related Legislation :
SB 367 (Dutton) of 2011: Failed passage in Senate Labor & IR
Committee
SB 367 would enact the Small Business Workplace Flexibility
Act of 2011 which would permit an individual nonexempt
employee -- employed by an employer with 25 or fewer employees
-- to request an employee-selected flexible work schedule, as
specified, and would allow an employer to implement this
schedule without any obligation to pay overtime compensation.
AB 830 (Olsen) of 2011: Failed passage in Assembly Committee
on Labor and Employment
AB 830 would allow 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 any
obligation to pay overtime compensation for those additional
hours in a workday.
SB 1335 (Cox and Dutton) of 2010: Failed passage in Senate
Labor & IR Committee
AB 830 is identical to last year's SB 1335, which failed
passage in its first policy committee.
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Senate Committee on Labor and Industrial Relations
SBX8 66 (Cox) of 2010 was identical SB 1335 (Cox and Dutton)
of 2010. SB 187 (Benoit) of 2009, AB 2127 (Benoit) of 2008,
AB 510 (Benoit) of 2007, AB 2217 (Villines) of 2006, SB 1254
(Ackerman) of 2006, and AB 640 (Tran) of 2005 were essentially
identical or very similar to this bill. All of these bills
failed passage in their first policy committee.
SUPPORT
California Chamber of Commerce - Sponsor
Associated Builders and Contractors of California
California Association for Health Services at Home
California Association of Bed & Breakfast Inns
California Association of Health Facilities
California Attractions and Parks Association
California Chapter of the American Fence Association
California Employment Law Council
California Farm Bureau Federation
California Fence Contractors' Association
California Grocers Association
California Hotel & Lodging Association
California Landscape Contractors Association
California Retailers Association
Engineering Contractors Association
Flasher Barricade Association
Loma Linda Chamber of Commerce
Marin Builders' Association
Montclair Chamber of Commerce
Oxnard Chamber of Commerce
Redondo Beach Chamber of Commerce
Western Electrical Contractors Association
OPPOSITION
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Labor Federation
California Official Court Reporters Association
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Senate Committee on Labor and Industrial Relations
California School Employees Association, AFL-CIO
California Teamsters Public Affairs Council
Engineers and Scientists of California
International Longshore and Warehouse Union
Professional and Technical Engineers, Local 21
UNITE HERE!
United Food and Commercial Workers - Western States Conference
Utility Workers Union of America, Local 132
Hearing Date: May 11, 2011 SB 378
Consultant: Alma Perez Page 9
Senate Committee on Labor and Industrial Relations