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EMPLOYMENT NOTES

Amendments to California's Alternative Workweek Rules

03.06.2009

On February 20, 2009, as part of California’s recent budget compromise, Governor Arnold Schwarzenegger signed Assembly Bill (“AB”) 5 into law. This Bill amends Section 511 of the California Labor Code pertaining to alternative workweek schedules and aims to provide more flexibility for employers and employees with regard to those alternative workweek schedules.

As background, California law generally requires overtime pay for non-exempt employees who work more than eight hours in a single workday or forty hours in a workweek. Alternative workweek schedules, however, allow non-exempt employees to work more than eight hours in a workday without the payment of overtime when certain voting and pre-election requirements are met. FN1 Further, existing law allows employers to propose alternative workweek schedules of either a single alternative work schedule that would become the standard schedule for all employees in the affected work unit, or a menu of alternative workweek options, other than eight-hour days, from which each employee in the unit may choose. After certain pre-election procedures are followed, employees vote on those proposed schedules in a secret ballot election. The schedules are adopted upon approval by at least two-thirds of the employees in the secret ballot election. Once adopted, they apply to all employees in the unit except for those employees who are unable to work the schedule and can be reasonably accommodated by the employer with an eight-hour schedule. 

While the pre-election and voting procedures remain the same under AB 5, AB 5 makes the following changes:

(1) AB 5 expands upon the menu of alternative workweek schedule options that an employer may choose to propose to employees to permit, unlike before, a regular schedule of 8-hour days, for which overtime is paid at time and one-half after eight hours and at double time after twelve hours in a workday;

(2) AB 5 codifies the definition of “work unit” for purposes of its provisions, consistent with the definition found in the majority of the California Wage Orders, as including “a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision thereof” and recognizes that a work unit can be a single individual so long as these criteria are met; and

(3) Most significantly, AB 5 permits employees for whom an employer proposes a menu of alternative workweek schedule options to, with the consent of their employer, move on a weekly basis from one workweek schedule to another in the adopted menu.

Some employers choose not to offer a menu of alternative workweek schedule options due to their scheduling needs and the inability to control which options in the menu that the employees will choose. If a menu of workweek schedule options is right for your company, however, then what AB 5 will do is permit an employee who wishes to work a traditional eight hour day to still vote for an alternative workweek schedule providing other options. This will make it easier to obtain the necessary votes of two thirds (2/3) of the employees in the unit.

Thus, when a menu of workweek schedule options is right for your company, AB 5 will likely provide more flexibility.

FN1 The alternative workweek schedule generally is up to ten hours without the payment of overtime although there are law exceptions for the healthcare industry and other law exceptions. Please contact legal counsel for further details.

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