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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