Amended in Senate April 14, 2016

Senate Bill No. 985

Introduced by begin delete Senator end delete begin insert Senators end insert Berryhill begin insert and Bates end insert

February 10, 2016

begin delete An act to amend Section 511 of the Labor Code, relating to employment. end delete begin insert An act to amend Section 510 of, and to add and repeal Section 511.5 of, the Labor Code, relating to employment, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 985, as amended, Berryhill. begin delete Alternative workweek schedule. end delete begin insert Employment: work hours. end insert

begin insert

Existing law, with certain exceptions, establishes 8 hours as a day’s 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.

end insert begin insert

This bill would enact the California Workplace Flexibility Act of 2016. The bill, until January 1, 2022, would establish an overtime exemption for an employee-selected flexible work schedule. The exemption would allow, at the written request of an individual nonexempt employee on a form provided by the Division of Labor Standards Enforcement, and upon employer approval, an employee-selected flexible work schedule providing for workdays up to 10 hours per day within a 40-hour workweek. The employer would be obligated to pay overtime based on the employee’s regular rate of pay, as prescribed, for all hours worked over 40 hours in a workweek or over 10 hours in a workday, whichever is greater. The bill would establish requirements for the termination of an agreed-upon schedule. The bill would require the employer to maintain in its files a signed statement of voluntary participation for all approved voluntary work schedules and to submit a copy of the signed request form to the division. The bill would except from its provisions employees covered by collective bargaining and specific public employees. The bill would require the division to enforce its provisions and adopt or revise regulations as necessary to implement its provisions. The bill would also require the division, by January 1, 2021, to prepare and submit a report to the Legislature evaluating the act.

end insert begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert begin delete

Existing law authorizes an employer to propose a regularly scheduled alternative workweek, as specified, that will be adopted if it receives approval in a secret ballot election by at least 2⁄3 of affected employees in a work unit.

end delete begin delete

This bill would make nonsubstantive changes to those provisions.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

This act shall be known and may be cited as the
California Workplace Flexibility Act of 2016.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

The Legislature finds and declares all of the following:

end insert begin insert

(a) California employees are increasingly requesting flexibility
in terms of their work schedules to help balance their work-life
commitments, and many prefer such increased flexibility over
additional compensation. As a result, many employers and human
resource professionals are attempting to enact flexible workplace
programs and policies to enhance employee engagement, recruit
and retain top talent, reduce turnover costs, and increase
productivity.

end insert begin insert

(b) While California is often a pioneer in enacting laws that
permit employees time away from the workplace, these laws
generally provide only unpaid leave. Therefore, many employees
are hesitant to take advantage of these laws because they want to
avoid reducing their overall work schedule. Accordingly, full-time
but hourly employees often request adjusting their schedules to
allow them to both take the time off in any given week but without
reducing their overall work schedule. While California does
authorize so-called “make up time” or “compensatory time off,”
these are often very limited in their application or stop-gap in
nature, and provide no meaningful assistance to most hourly
employees who have recurring nonwork obligations.

end insert begin insert

(c) Moreover, California overtime laws, which are unique in
the country, make it difficult for most employers to reach an
agreement with an individual worker that would allow a flexible
work schedule.

end insert begin insert

(d) Existing law does not permit a California employer to allow
an individual worker to choose a flexible work schedule of four
10-hour days per week without overtime being paid.

end insert begin insert

(e) As a consequence, large, small, and micro-employers do not
have the flexibility to offer their employees the opportunity to take
advantage of a flexible work schedule that would benefit the
workers and their families.

end insert begin insert

(f) Permitting employees to elect to work four 10-hour days per
week without the payment of overtime would allow those employees
to spend much-needed time with their families, lessen traffic
congestion on our crowded roads and highways, allow workers
to spend one day a week on personal matters, such as volunteering
at a child’s school, scheduling medical appointments, and attending
to other important family matters that often are difficult to schedule
with a five-days-per-week, eight-hours-per-day schedule.

end insert begin insert

(g) It is the intent of the Legislature in enacting the California
Workplace Flexibility Act of 2016 to protect workers as follows:

end insert begin insert

(1) An employee shall not be forced to work more than eight
hours in a day without receiving overtime, but, instead, he or she
may request a flexible work schedule of up to four 10-hour days
per week and the employer may agree to this schedule without
having to pay overtime for the 9th and 10th hours worked per day
in that schedule.

end insert begin insert

(2) The employer will be required to pay overtime rates after
10 work hours in a day for workers who have chosen a flexible
schedule pursuant to this act.

end insert begin insert

(3) The employer will be required to pay double normal pay
after 12 work hours in a day for a worker who has chosen a flexible
schedule under this act.

end insert begin insert

(4) The worker, including one who chooses a flexible schedule
under this act, will receive overtime for any hours worked over 40
hours in a single week.

end insert begin insert

(h) Workplaces that are unionized already allow workers to
choose to work four 10-hour days; however, it is virtually
impossible for workers of nonunionized workplaces to enjoy this
benefit.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 510 of the end insert begin insert Labor Code end insert begin insert is amended to read: end insert

510.  

(a) Eight hours of labor constitutes a day’s work. Any
work in excess of eight hours in one workday and 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. In addition, 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. Nothing in this section requires an
employer to combine more than one rate of overtime compensation
in order to calculate the amount to be paid to an employee for any
hour of overtime work. The requirements of this section do not
apply to the payment of overtime compensation to an employee
working pursuant to any of the following:

(1) An alternative workweek schedule adopted pursuant to
Section 511.

begin insert

(2) (A) An employee-selected flexible work schedule adopted
pursuant to Section 511.5.

end insert begin insert

(B) This paragraph shall become inoperative on January 1,
2022.

end insert begin delete

(2)

end delete

begin insert (3) end insert  An alternative workweek schedule adopted pursuant to a
collective bargaining agreement pursuant to Section 514.

begin delete

(3)

end delete

begin insert (4) end insert  An alternative workweek schedule to which this chapter is
inapplicable pursuant to Section 554.

(b) Time spent commuting to and from the first place at which
an employee’s presence is required by the employer shall not be
considered to be a part of a day’s work, when the employee
commutes in a vehicle that is owned, leased, or subsidized by the
employer and is used for the purpose of ridesharing, as defined in
Section 522 of the Vehicle Code.

(c) This section does not affect, change, or limit an employer’s
liability under the workers’ compensation law.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 511.5 is added to the end insert begin insert Labor Code end insert begin insert , to read: end insert

begin insert

begin insert 511.5. end insert   

(a) Notwithstanding Section 511 or any other law or
order of the Industrial Welfare Commission, an individual
nonexempt employee may work up to 10 hours per workday without
any obligation on the part of the employer to pay an overtime rate
of compensation, except as provided in subdivision (b), if the
employee requests this schedule in writing and the employer
approves the request. The request by an employee shall be referred
to as an overtime exemption for an employee-selected flexible work
schedule. The request shall be in writing on a form provided by
the Division of Labor Standards Enforcement and shall include
all of the following:

(1) A statement that the employer and employee participating
in the flexible work schedule understand that work performed in
excess of 10 hours in a day or in excess of 40 hours in a week must
be compensated at one and one-half times the employee’s regular
rate of pay.

(2) A description of the daily and weekly hours to be worked
under the flexible work schedule.

(3) A statement that the flexible work hour schedule has not
been made a condition of employment and that participation in
the plan is voluntary.

(4) The signature of the employer or authorized representative.

(b) If an employee-selected flexible work schedule is adopted
pursuant to subdivision (a), the employer shall pay overtime at
one and one-half times the employee’s regular rate of pay for all
hours worked over 40 hours in a workweek or over 10 hours in a
workday, whichever is the greater number of hours. All work
performed in excess of 12 hours per workday and in excess of eight
hours on a fifth, sixth, or seventh day in the workweek shall be
paid at double the employee’s regular rate of pay.

(c) The employer may inform its employees that it is willing to
consider an employee request to work an employee-selected flexible
work schedule, but shall not induce a request by promising an
employment benefit or threatening an employment detriment.

(d) The employee or employer may discontinue the
employee-selected flexible work schedule at any time by giving
written notice to the other party. The request shall be effective the
first day of the next pay period or the fifth day after notice is given
if there are fewer than five days before the start of the next pay
period, unless otherwise agreed to by the employer and the
employee.

(e) For each employee participating in an approved voluntary
flexible work schedule, the employer shall maintain a signed
statement of voluntary participation in the employee’s personnel
file or in a single file for all approved voluntary work schedules.

(f) The employer shall submit a copy of the signed
employee-selected flexible work schedule form to the Division of
Labor Standards Enforcement.

(g) This section does not apply to any employee covered by a
valid collective bargaining agreement or employed by the state,
a city, county, city and county, district, municipality, or other
public, quasi-public, or municipal corporation, or any political
subdivision of this state.

(h) This section shall be liberally construed to accomplish its
purposes.

(i) This section shall prevail over any inconsistent provisions
in any wage order of the Industrial Welfare Commission.

(j) (1) The Division of Labor Standards Enforcement shall
enforce this section and shall adopt or revise regulations as
necessary to conform and implement this section.

(2) Not later than January 1, 2021, the Division of Labor
Standards Enforcement shall prepare and submit to the Legislature
a report, in accordance with Section 9795 of the Government Code,
evaluating the California Workplace Flexibility Act of 2016,
including, but not limited to, all of the following:

(A) The number of employee complaints regarding employer
delay in approving a flexible work schedule.

(B) The number of employees who have complained of being
coerced to sign the employee-selected flexible work schedule form
referenced in this section.

(C) The total number of employer approved flexible work
schedules received by the Division of Labor Standards Enforcement
pursuant to subdivision (f).

(k) This section shall remain in effect only until January 1, 2022,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2022, deletes or extends that date.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to adjust to the changing demographics of California’s
workforce, economic challenges, volatile fuel prices, and
transportation challenges for employees, and to timely provide
working Californians with a beneficial work schedule that
facilitates greater balance of work and life demands, it is necessary
that this act take effect immediately.

end insert

begin delete

SECTION 1.  

Section 511 of the Labor Code is amended to
read:

511.  

(a) Upon the proposal of an employer, the employees of
an employer may adopt a regularly scheduled alternative workweek
that authorizes work by the affected employees for no longer than
10 hours per day within a 40-hour workweek without the payment
to the affected employees of an overtime rate of compensation
pursuant to this section. A proposal to adopt an alternative
workweek schedule shall be deemed adopted only if it receives
approval in a secret ballot election by at least two-thirds of affected
employees in a readily identifiable work unit. 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. Notwithstanding subdivision (c)
of Section 500, the menu of work schedule options may include a
regular schedule of eight-hour days that are compensated in
accordance with subdivision (a) of Section 510. Employees who
adopt a menu of work schedule options may, with employer
consent, move from one schedule option to another on a weekly
basis.

(b) An affected employee working longer than eight hours, but
not more than 12 hours in a day, pursuant to an alternative
workweek schedule adopted pursuant to this section shall be paid
an overtime rate of compensation of no less than one and one-half
times the regular rate of pay of the employee for any work in excess
of the regularly scheduled hours established by the alternative
workweek agreement and for any work in excess of 40 hours per
week. An overtime rate of compensation of no less than double
the regular rate of pay of the employee shall be paid for any work
in excess of 12 hours per day and for any work in excess of eight
hours on those days worked beyond the regularly scheduled
workdays established by the alternative workweek agreement.
Nothing in this section requires an employer to combine more than
one rate of overtime compensation in order to calculate the amount
to be paid to an employee for any hour of overtime work.

(c) An employer shall not reduce an employee’s regular rate of
hourly pay as a result of the adoption, repeal, or nullification of
an alternative workweek schedule.

(d) An employer shall make a reasonable effort to find a work
schedule not to exceed eight hours in a workday, in order to
accommodate any affected employee who was eligible to vote in
an election authorized by this section and is unable to work the
alternative schedule hours established as the result of that election.
An employer shall be permitted to provide a work schedule not to
exceed eight hours in a workday to accommodate any employee
who was hired after the date of the election and who is unable to
work the alternative schedule established as the result of that
election. An employer shall explore any available reasonable
alternative means of accommodating the religious belief or
observance of an affected employee that conflicts with an adopted
alternative workweek schedule, in the manner provided by
subdivision (j) of Section 12940 of the Government Code.

(e) The results of any election conducted pursuant to this section
shall be reported by an employer to the Division of Labor Standards
Enforcement within 30 days after the results are final.

(f) Any type of alternative workweek schedule that is authorized
by this code and that was in effect on January 1, 2000, may be
repealed by the affected employees pursuant to this section. Any
alternative workweek schedule that was adopted pursuant to Wage
Order Number 1, 4, 5, 7, or 9 of the Industrial Welfare Commission
is null and void, except for an alternative workweek providing for
a regular schedule of no more than 10 hours’ work in a workday
that was adopted by a two-thirds vote of affected employees in a
secret ballot election pursuant to wage orders of the Industrial
Welfare Commission in effect prior to 1998. This subdivision does
not apply to exemptions authorized pursuant to Section 515.

(g) Notwithstanding subdivision (f), an alternative workweek
schedule in the health care industry adopted by a two-thirds vote
of affected employees in a secret ballot election pursuant to Wage
Order Numbers 4 and 5 in effect prior to 1998, that provided for
workdays exceeding 10 hours but not exceeding 12 hours in a day
without the payment of overtime compensation, shall be valid until
July 1, 2000. An employer in the health care industry shall make
a reasonable effort to accommodate any employee in the health
care industry who is unable to work the alternative schedule
established as the result of a valid election held in accordance with
provisions of Wage Order Number 4 or 5 that were in effect prior
to 1998.

(h) Notwithstanding subdivision (f), if an employee is
voluntarily working an alternative workweek schedule providing
for a regular work schedule of not more than 10 hours’ work in a
workday as of July 1, 1999, an employee may continue to work
that alternative workweek schedule without the entitlement of the
payment of daily overtime compensation for the hours provided
in that schedule if the employer approves a written request of the
employee to work that schedule.

(i) For purposes of this section, “work unit” includes a division,
a department, a job classification, a shift, a separate physical
location, or a recognized subdivision thereof. A work unit may
consist of an individual employee as long as the criteria for an
identifiable work unit in this section is met.

end delete