BILL ANALYSIS Ó
SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
Senator Tony Mendoza, Chair
2015 - 2016 Regular
Bill No: SB 985 Hearing Date: June 22,
2016
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|Author: |Berryhill |
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|Version: |April 14, 2016 |
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|Urgency: |Yes |Fiscal: |Yes |
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|Consultant:|Brandon Seto |
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Subject: Employment: work hours
KEY ISSUES
Should individual employees, on a one-on-one basis, be allowed
to request an alternative workweek schedule from their employer?
Should the Legislature require the Division of Labor Standards
Enforcement (DLSE) to develop an alternative workweek schedule
request form to be utilized by employees and kept on file by
employers and the DLSE?
Should the Legislature require a report from the DLSE which
describes employee experiences relating to alternative workweek
schedules, including the total number requested by employees?
ANALYSIS
Existing law
Defines a full workday as 8 hours, and 40 hours as a
workweek. Overtime wage rates must be paid for any time
worked beyond those previously mentioned definitions (Labor
Code §510).
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Requires overtime to be paid at the rate of no less than
one and one-half times an employee's regular rate of pay
for work performed beyond 8 hours in a day or 40 hours in a
week. Furthermore, work performed beyond 12 hours in a day
is to be compensated at twice the regular rate of pay
(Labor Code §510).
Utilizes regulations created by the Industrial Welfare
Commission (IWC) in the form of "wage orders" to determine
the wages, hours, conditions, and scheduling options of
labor and employment in the various occupations, trades,
and industries in California (Labor Code §1173 and §517).
Defines a "work unit" as 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 aforementioned
criteria for an identifiable work unit is met (Labor Code
§511).
Authorizes the adoption of alternative workweek
schedules for work units, provided 2/3 of employees in a
work unit vote by secret ballot to approve an alternative
workweek schedule which allows employees to work up to 10
hours a day within a 40-hour workweek without the payment
of overtime (Labor Code §511).
Under these existing alternative workweek schedule
options, employers pay their employees at overtime rates of
one and one-half times their regular rate of pay for time
worked beyond 10 hours a day or for any work in excess of
40 hours in a week. Also, any work beyond 12 hours in a day
must be compensated at twice the employee's regular rate of
pay (Labor Code §511).
This Bill
Would enact the California Workplace Flexibility Act of 2016
which would allow employees to request a flexible work schedule
of up to four 10-hour days per week without the obligation on
the employer to pay overtime for the 9th and 10th hours worked
per day in that schedule.
Specifically, this bill would:
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Require employers to pay overtime rates after 10 hours
of work in a day or 40 hours in a week for workers who have
chosen a flexible work schedule pursuant to this act. After
12 work hours in a day, the worker would have to be paid
double the regular rate of pay by their employer.
Allow individual employees, using a form provided by the
DLSE, to make written requests for flexible work schedules
from their employers without the requirement of a secret
ballot decision by 2/3 of the work unit.
Specify that this form, in addition to the provisions
mentioned above, includes a statement indicating that the
flexible work schedule was not a condition of employment,
and that employee participation is voluntary.
Require employers to retain these signed request forms
in their records and to send a copy to the DLSE.
Enable employers to consider employee requests for
flexible work schedules, but not to induce such requests
through promises of detriment or benefit to the employee.
Allow either employer or employee to terminate the
flexible work schedule through written notice.
Exclude public employees or those covered by a
collective bargaining agreement.
Specify that its scheduling provisions will replace the
scheduling provisions in any Industrial Welfare Commission
wage order, thus making it the standard practice for
flexible scheduling options.
Require the DLSE to prepare and submit a report to the
Legislature no later than January 1, 2021evaluating the
provisions of this bill including, but not limited to, the
following:
1) The number of employee complaints regarding
employer delay in approving a flexible work schedule.
2) The number of employees who have complained of
being coerced to sign the employee-selected flexible
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work schedule form.
3) The total number of employer-approved flexible
work schedules received by the DLSE.
State that its provisions will be repealed on January 1,
2022, unless a statute enacted before January 1, 2022,
deletes or extends that date.
Be considered as an urgency statute.
COMMENTS
1. Need for this bill?
This bill's stated intent is to provide flexibility to
employers and employees in terms of work schedules. It
contends that California's overtime and alternative work
schedule laws are prohibitive, which is detrimental both to
employers and their employees. According to the author, this
bill would create greater efficiency for employers and greater
work-life balance for employees.
2. Proponent Arguments :
Proponents state that California is presently the only state
that requires daily overtime but offers no mechanism for
individual employees to request, or for private employers to
provide flexible schedules. While Labor Code § 511 authorizes
so-called "alternative workweek schedules" if approved by a
"work unit", it presently applies only to "proposal[s] of an
employer," not individual employees. In this regard, the Labor
Code provides a mechanism for employers to request an
alternative workweek schedule, but does not provide a
mechanism in the scenario where an employee is seeking an
alternative schedule.
Proponents state that this bill would resolve the conflict and
complexity of California's current overtime premium pay
requirements by permitting the 4-day workweek to be paid at
straight time rates, if the employee requests the flexible
work schedule. Proponents further argue that flexible work
schedules benefit both employees and employers. Workers
benefit by having an extra day to spend with family, complete
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household chores, volunteer at their children's school and
more. Flexible work schedules benefit employers by improved
employee morale, increased productivity and as a helpful
recruitment aid. In addition, proponents say that SB 985 would
result in both traffic and environmental benefits for
California due to reduced commuting.
3. Opponent Arguments :
The California Labor Federation opposes SB 985, which they
believe would undermine the fundamental right to an 8-hour
day. The vast majority of California's workers are "at will"
and will agree to virtually any waiver of rights if it is
communicated directly or indirectly that the waiver is
supported by the employer. This puts many workers at risk of
waiving a core labor protection to avoid angering their boss.
Eliminating overtime can result in significant savings to an
employer. This reality makes it even more important that
workers be protected from suggestion or coercion to waive this
right.
Opponents state that significant flexibility already exists
under state law. Workers can request "make-up time" so they
can leave early one day and work late the next without
accruing overtime. In addition, Labor-Management negotiations
created the pre-existing alternative workweek process. This
process allows the adoption of an alternative schedule with
safeguards to protect workers from employer pressure.
Opponents argue that they have yet to see evidence that this
model is not working and thus see no reason to change the
rules and jeopardize vulnerable workers.
Opponents claim that employers already have the right to be as
flexible or as inflexible as they want when it comes to shifts
and scheduling,
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so long as they pay for overtime hours. If the problem is
workers sitting in traffic at peak hours, employers can adjust
start times or stagger shifts. They can give workers as many
or as few hours as they like, avoiding any overtime
obligations. Finally, opponents state that nothing in this
bill guarantees
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workers any additional flexibility. While they can request an
alternate schedule, the employer has the power to allow or
deny. This opens the door to favoritism, where only certain
employees get schedule changes approved. In short, opponents
believe that this bill provides no real benefit to workers.
4. Prior Legislation :
Although this bill has added, among other things, a sunset
date and a reporting requirement, there have been many
previous bills that were similar to this one, and all failed
passage in the first policy committees in their respective
houses of origin. They include:
SB 368 (Berryhill) of 2016
AB 2448 (Jones) of 2014
AB 907 (Conway) of 2014
SB 607 (Berryhill) of 2013
SB 1115 (Dutton) of 2012
SB 367 (Dutton) of 2011
AB 830 (Olsen) of 2011
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
AB 640 (Tran) of 2005
SUPPORT
Acclamation Insurance Management Services
Allied Managed Care
American Insurance Association
Associated General Contractors
Association of California Insurance Companies
Bay Area HR Executives Council
California Association for Health Services at Home
California Association of Joint Powers Authorities
California Chamber of Commerce
California Coalition on Workers' Compensation
California Delivery Association
California Grocers Association
California Hotel & Lodging Association
California League of Food Processors
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California Manufacturers & Technology Association
California Retailers Association
California School Boards Association
California Special Districts Association
California State Association of Counties
California State Council of SHRM (CalSHRM)
CAWA - Representing the Automotive Parts Industry
Central California SHRM
Central Coast HR Association
Central Valley HR Management Association
CSAC Excess Insurance Authority
Culver City Chamber of Commerce
HR Association of Central California
Inland Empire Society for HR Association Management
Kern County Society for Human Resource Management
League of California Cities
National Association of Mutual Insurance Companies
National Federation of Independent Business
Northstate SHRM
Professionals in Human Resources Association
Property Casualty Insurers Association of America
Rural County Representatives of California
Sacramento Area HR Association
San Diego Society of Human Resource Management
San Joaquin Human Resource Association
Santa Barbara HR Association
SHRM of Tulare/Kings County
Sierra Human Resources Association
Southern California Wine Country SHRM
OPPOSITION
California Labor Federation
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