BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: April 14, 2010 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: SB 1335
Author: Cox and Dutton
Version: As Amended April 6, 2010
SUBJECT
Employment: working hours.
KEY ISSUE
Should an alternative to the existing workplace election
procedure for electing a particular workweek schedule be
established that would: (a) allow an employee to request to work
up to 10 hours per day within a 40-hour workweek, and (b)
relieve the employer of the obligation to pay overtime
compensation under such a schedule?
PURPOSE
To allow for greater flexibility in the scheduling of individual
worker's hours and to delete a requirement for overtime
compensation if an alternative workweek schedule has been agreed
upon.
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, or a 40-hour workweek, 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 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 schedule.
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
Hearing Date: April 14, 2010 SB 1335
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Senate Committee on Labor and Industrial Relations
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.
In addition, existing law provides that the standard
requirements for overtime compensation do not apply to certain
exempt executive, administrative, and professional employees, as
specified. (Labor Code 515)
This Bill would enact the Workplace Flexibility Act of 2010
which would permit an individual nonexempt employee to request
an employee-selected flexible work schedule providing for
workdays of 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.
Specifically, this bill:
Provides that 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 if the employee requests this schedule in
writing and the employer approves the request. This shall
be referred to as an overtime exemption for an
employee-selected flexible work schedule.
Specifies that if an employee-selected flexible work
schedule is adopted, 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.
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Senate Committee on Labor and Industrial Relations
Provides that an 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.
Specifies that an employee or employer may discontinue
the employee-selected flexible work schedule at any time by
giving written notice to the other party. The request will
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.
Provides that 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.
Requires that this section shall be liberally construed
to accomplish its purposes;
Specifies that the Division of Labor Standards
Enforcement shall enforce this section and shall adopt or
revise regulations in a manner necessary to conform and
implement this section.
Requires that this section shall prevail over any
inconsistent provisions in any wage order of the Industrial
Welfare Commission
Provides that the provisions of this act are severable.
In addition, this bill sets forth certain Legislative findings
and declarations relating to the need for additional work-hour
flexibility for individual workers and for worker protections
connected with this flexibility.
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Senate Committee on Labor and Industrial Relations
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 or identical 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, this bill would provide for a process under which
individual employees may make a request for an alternative
workweek schedule, giving up overtime for work in excess of 8
hours. The proportion of workers interested in such
individual accommodations is unknown.
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 18,844 employers that have successfully
established an alternative workweek for their employees.
3. Proponent Arguments :
According to proponents, California is one of only a handful
of states that require overtime pay for hours worked over 8 in
a day (in addition to over 40 in a week), meaning that 9 and
10-hour work days, common to flexible schedules, require
payment of overtime. Proponents contend that particularly in
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Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
today's economic downturn, many employers find themselves
forced to choose between allowing flexible schedules and
keeping employees on the payroll.
Proponents argue that currently, the only method for employers
to grant employees 9 or 10 hour workdays at straight time is a
rigid, complex, and bureaucratic process that requires a
secret ballot election and a 2/3 vote of approval. In
addition, proponents argue that this process requires a litany
of detailed procedures including notifications, meetings,
distributions, and filings according to strict timelines and
any deviation from this process can void the election and give
rise to costly lawsuits. Proponents argue that this process
discourages employers from granting compressed schedules, and
believe that instead, California law should permit flexible
work week schedules for individual workers desiring to find a
balance between work and personal lives.
In addition, proponents argue that flexible work schedules are
a win-win-win for employees, employers, and the environment.
For employees, they argue that this flexibility can help to
better balance work and personal lives. For employers, they
can greatly increase workplace productivity, efficiency, and
employee recruitment and retention. And for the environment,
proponents argue that flexible schedules mean fewer cars on
the road and reduced greenhouse gas emissions. Lastly,
proponents note that this bill provides for important employee
protections in allowing for this alternative scheduling.
4. Opponent Arguments :
According to opponents, this bill would undermine the
eight-hour day by allowing employers to potentially force
employees to work ten hours straight without paying overtime.
Opponents argue that current law was carefully crafted to
ensure adequate flexibility for employers and employees while
protecting the basic right to overtime. Opponents believe
that this bill is unnecessary and argue that employers who
want to institute an alternative workweek schedule can either
negotiate one through collective bargaining or conduct an
employee election. Opponents also argue that employees who
Hearing Date: April 14, 2010 SB 1335
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
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 emphasize that the alternative workweek election
process is largely in the hands of the employer: (1) the
employer has sole discretion over whether to conduct an
election; (2) the employer decides which worksite, department,
or division is eligible to participate in the election,
regardless of its size; (3) the employer decides what
alternate schedules to make available and can offer just one
or a menu of options.
Opponents argue that this bill would replace this system of
carefully crafted protections by giving employers the right to
negotiate alternate schedules one individual employee at a
time, absent any criteria for schedules to be approved or
denied, and with nothing to prevent employers from awarding
desirable schedules to favored employees. In addition,
opponents argue 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. Opponents believe that the current
system strikes the right balance.
5. Prior Legislation :
SBX8 66 (Cox), heard by this Committee on February 24, 2010,
is identical to this bill. 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
Air Monitor Corporation
Automotive Service Councils of California
Bakersfield Chamber of Commerce
Brentwood Chamber of Commerce
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Senate Committee on Labor and Industrial Relations
California Automotive Wholesalers' Association
California Business Properties Association
California Chapter of the American Fence Association
California Dental Association
California Farm Bureau Federation
California Fence Contractors Association
California Framing Contractors Association
California Grocers Association
California Hospital Association
California Hotel & Lodging Association
California Independent Grocers Association
California Independent Petroleum Association
California Landscape Contractors Association
California League of Food Processors
California Lodging Industry Association
California Manufacturers and Technology Association
California Newspaper Publishers Association
California Restaurant Association
California Retailers Association
California Veterinary Medical Association
California Women's Leadership Association
Capree Escrow
Chambers of Commerce of Alliance Ventura & Santa Barbara
Counties
Claremont Chamber of Commerce
Coast Personnel Services
Corona Chamber of Commerce
Culver City Chamber of Commerce
Custom Employee Benefits Insurance Services, Inc.
El Centro Chamber of Commerce
Engineering Contractors Association
Flasher/Barricade Association
Fresno Chamber of Commerce
Garden Grove Chamber of Commerce
Goleta Valley Chamber of Commerce
Gossett Alarm
Greater Riverside Chamber of Commerce
Imperial Valley Press
Irwindale Chamber of Commerce
J. Craig Venter Institute
Lakewood Chamber of Commerce
Long Beach Area
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Senate Committee on Labor and Industrial Relations
Long Beach Chamber of Commerce
Marin Builders Association
Millbrae Chamber of Commerce
Milpitas Chamber of Commerce
Modesto Chamber of Commerce
Napa Chamber of Commerce
National Federation of Independent Business
Orange County Business Council
Oxnard Chamber of Commerce
Palm Desert Chamber of Commerce
Physician's Automated Laboratory, Inc.
Pleasanton Chamber of Commerce
Porterville Chamber of Commerce
Redondo Beach chamber of Commerce & Visitors Bureau
Riverside Chamber of Commerce
Robyn Bleakley
Roseville Chamber of Commerce
Sacramento Metropolitan Chamber of Commerce
San Diego East County Chamber of Commerce
San Diego Regional Chamber of Commerce
San Fernando Valley Chamber of Commerce
Santa Clara Chamber of Commerce
Simi Valley Chamber of Commerce
Small Manufacturers Association of California
Sonoma Valley Bank
South Bay Association of Chambers of Commerce
Southwest Airlines
Southwest California Legislative Council
State Farm
SureWest Communications
The Olson Company
Thousand Oaks-Westlake Village Chamber of Commerce
True Blue
United Staffing Associates
Ventura County Agricultural Association
Victorville Chamber of Commerce
Western Electrical Contractors Association
Western Growers Association
Western Manufactured Housing Communities Association
Woodland Farms, Inc.
Hearing Date: April 14, 2010 SB 1335
Consultant: Alma Perez Page 9
Senate Committee on Labor and Industrial Relations
OPPOSITION
American Federation of State, County and Municipal Employees,
AFL-CIO
California Applicants' Attorneys Association
California Conference Board of the Amalgamated Transit Union
California Conference of Machinists
California Employment Lawyers Association
California Federation of Teachers
California Labor Federation
California Nurses Association/National Nurses Organizing
Committee
California State Pipe Trades Council
California Teamsters Public Affairs Council
Consumer Attorneys of California
Engineers and Scientists of California, IFPTE Local 20
International Longshore and Warehouse Union
Jockeys' Guild
Professional and Technical Engineers, IFPTE Local 21
Service Employees International Union
United Food and Commercial Workers Region 8 States Council
United Transportation Union
UNITE-HERE!
Western State Council of Sheet Metal Workers
* * *
Hearing Date: April 14, 2010 SB 1335
Consultant: Alma Perez Page 10
Senate Committee on Labor and Industrial Relations