California Legislature—2015–16 Regular Session

Assembly BillNo. 2418

Introduced by Assembly Member Jones

February 19, 2016

An act to amend Section 204.3 of the Labor Code, relating to employment.


AB 2418, as introduced, Jones. Compensating time off.

Existing law authorizes an employee to receive compensating time off in lieu of overtime pay under specified conditions, including, but not limited to, that the compensating time off is provided pursuant to a collective bargaining agreement, or other written agreement.

This bill would make technical, nonsubstantive changes to these provisions.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P1    1


Section 204.3 of the Labor Code is amended to



(a) An employee may receive, in lieu of overtime
4compensation, compensating time off at a rate of not less than one
5and one-half hours for each hour of employment for which
6overtime compensation is required by law. If an hour of
7employment would otherwise be compensable at a rate of more
8than one and one-half times the employee’s regular rate of
P2    1compensation, then the employee may receive compensating time
2off commensurate with the higher rate.

3(b) An employer may provide compensating time off under
4subdivision (a) if the following four conditions are met:

5(1) The compensating time off is provided pursuant to applicable
6provisions of a collective bargaining agreement, memorandum of
7understanding, or other written agreement between the employer
8and the duly authorized representative of the employer’s
9employees; or, in the case of employees not covered by the
10aforementioned agreement or memorandum of understanding,
11pursuant to a written agreement entered into between the employer
12and employee before the performance of the work.

13(2) The employee has not accrued compensating time in excess
14of the limit prescribed by subdivision (c).

15(3) The employee has requested, in writing, compensating time
16off in lieu of overtime compensation.

17(4) The employee is regularly scheduled to work nobegin delete lessend deletebegin insert fewerend insert
18 than 40 hours in a workweek.

19(c) (1) An employee may not accrue more than 240 hours of
20compensating time off. begin deleteAnyend deletebegin insert Anend insert employee who has accrued 240
21hours of compensating time off shall, for any additional overtime
22hours of work, be paid overtime compensation.

23(2) If compensation is paid to an employee for accrued
24compensating time off, the compensation shall be paid at the
25regular rate earned by the employee at the time the employee
26receives payment.

27(d) An employee who has accrued compensating time off
28authorized to be provided under subdivision (a) shall, upon
29termination of employment, be paid for the unused compensating
30time at a rate of compensation not less than the average regular
31rate received by the employee during the last three years of the
32employee’s employment, or the final regular rate received by the
33employee, whichever is higher.

34(e) (1) An employee who has accrued compensating time off
35authorized to be provided under subdivision (a), and who has
36requested the use of that compensating time, shall be permitted by
37the employee’s employer to use the time within a reasonable period
38after making the request, if the use of the compensating time does
39not unduly disrupt the operations of the employer.

P3    1(2) Upon the request of an employee, the employer shall pay
2overtime compensation in cash in lieu of compensating time off
3for any compensating time off that has accrued for at least two pay

5(3) For purposes of determining whether a request to use
6compensating time has been granted within a reasonable period,
7the following factors shall be relevant:

8(A) The normal schedule of work.

9(B) Anticipated peak workloads based on past experience.

10(C) Emergency requirements for staff and services.

11(D) The availability of qualified substitute staff.

12(f) Every employer shall keep records that accurately reflect
13compensating time earned and used.

14(g) For purposes of this section, the terms “compensating time”
15and “compensating time off” mean hours during which an
16employee is not working, which are not counted as hours worked
17during the applicable workweek or other work period for purposes
18of overtime compensation, and for which the employee is
19compensated at the employee’s regular rate.

20(h) This section shall not apply to any employee exempt from
21the overtime provisions of the California wage orders.

22(i) This section shall not apply to any employee who is subject
23to the following wage orders of the Industrial Welfare Commission:
24Orders No. 8-80, 13-80, and 14-80 (affecting industries handling
25products after harvest, industries preparing agricultural products
26for market on the farm, and agricultural occupations), Order No.
273-80 (affecting the canning, freezing, and preserving industry),
28Orders No. 5-89 and 10-89 (affecting the public housekeeping and
29amusement and recreation industries), and Order No. 1-89
30(affecting the manufacturing industry).