When January 1, 2000, rolls around, most California employers will have to pay overtime after eight hours in a day under the new daily overtime law. But adopting an alternative workweek schedule can help you avoid many daily overtime obligations so long as you follow the procedures set out in the new law. If you already have an alternative workweek that was set up after January 1, 1998, your program must comply with the new law; if it doesn’t, you’ll have to pay daily overtime beginning next year. To help you comply with the rules, we’ve prepared a seven-point guide to adopting alternative workweeks. We have also included several sample forms on our Web site to simplify the process.
What Is An Alternative Workweek?
Wendy A. Woldt, a partner in the Torrance law firm of Woldt & Associates, points out that an alternative workweek program allows you and your employees who aren’t exempt from overtime to agree on a schedule of not more than 10 hours a day without triggering daily overtime. In the most common alternative arrangement, employees work four 10-hour days. In another, the “9/80” schedule, employees work 80 hours over nine days. A 9/80 schedule is authorized only under Wage Orders 1, 4, 5, 9 and 10. Note that Wage Orders 14 and 15 currently prohibit any type of alternative workweek.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Who Should Follow The Alternative Workweek Rules?
If you currently have an alternative workweek that wasn’t adopted in a secret ballot by two-thirds of the workers in a work unit, and/or exceeds 10 hours per day, you must hold a successful election before January 1, 2000. Individual employees who, as of July 1, 1999, were voluntarily working an alternative workweek under Wage Orders 1, 4, 5, 7 or 9, may request, in writing, to continue doing so without daily overtime. But this voluntary arrangement doesn’t apply to people hired after July 1.
The new law authorizes the Industrial Welfare Commission (IWC) to adopt, by July 1, 2000, new procedures for setting up alternative workweeks. Until they do, there will continue to be conflicts among the new overtime law, existing wage orders, and wage orders that will be reinstated on January 1. If you opt for an alternative workweek, taking the following steps now will help you comply with the broadest reading of the law:
- Identify work units that will be covered. An alternative workweek must apply to a specified work unit. Existing rules define a work unit as a division, department, job classification, shift or separate location. In some situations, even a single employee may qualify as a work unit.
- Prepare a written proposal. Describe the new schedule and its impact, if any, on pay and benefits. You can propose a single schedule for all workers in the work unit or a menu of schedule options for employees to choose from. A schedule can fluctuate if the differences are specified in the proposal – unless the workers are covered by Wage Orders 2, 3, 6, 7, 8, 11, 12 or 13. These require that schedules be consistent from week to week and include no more than four workdays. Wage Order 1 specifies that employees must be scheduled for 40 hours of work a week and at least four hours a day. And under most wage orders (except 4, 5, 9 and 10) employees must be scheduled for two consecutive days off.
- Communicate with workers. Under several of the existing wage orders and some of those that will be reinstated on January 1, you must meet with employees to discuss the impact of the alternative workweek scheduling proposal. Whether this will continue to be required when the IWC amends the wage orders next year isn’t clear. But regardless, it’s still good practice.
- Hold a secret ballot election. Employees must ratify the agreement by a two-thirds majority in a secret ballot election. You must report election results within 30 days to the California Department of Industrial Relations, Division of Labor Statistics Research, P.O. Box 420603, San Francisco 94142.
- Get agreement signed. Many of the existing and reinstated wage orders require that at least two-thirds of your employees voluntarily sign a schedule agreement. It’s uncertain whether this will be required when the IWC amends the wage orders next year. But, to be safe, it’s a good idea to have a signed agreement.
- Have employees select schedules if you propose a menu. Each employee should select, in writing, a fixed schedule from the menu. To simplify matters, have employees initial their schedule on the written agreement.
- Accommodate employees where necessary. Everyone in the work unit is subject to the new workweek arrangement, even if they voted against it. However, you must try to arrange a schedule that doesn’t exceed eight hours a day for employees who were eligible to vote, but can’t work the new schedule. And you must explore accommodations for workers whose religious beliefs or observances conflict with the schedule. If, after the election, an employee is hired who can’t work the alternative schedule, you are permitted, but not required, to make an accommodation for the person.
Additional Changes On The Way
See the CEA Special Report on the new daily overtime rules for other details on alternative workweeks, including overtime premium pay obligations and special rules for the healthcare industry. We’ll update you about rule changes when the IWC issues revised wage orders next year.