HR Management & Compliance

Alternative Workweeks: Court Rejects Employer’s Challenge to Wage Order 16; Overview of Alternative Workweek Requirements






In 2001, the state
Industrial Welfare Commission (IWC) adopted Wage Order 16, regulating for the
first time the construction, drilling, logging, and mining industries and
setting out detailed alternative workweek requirements for these industries.
Recently, a construction employer attacked Wage Order 16—and its alternative
workweek provisions—as being invalid. But, as we’ll explain, an appeals court
has come to the opposite conclusion.

 

Alternative Workweek
Questioned

In 1999, Brinderson
Constructors, Inc., headquartered in Costa
Mesa
, conducted a secret ballot election to adopt an
alternative workweek schedule consisting of four 10-hour days. Employees
approved the 4/10 schedule, and Brinderson filed the election results with the state
Department of Industrial Relations, as required. (Note that even though Wage
Order 16 wasn’t yet adopted, Brinderson’s alternative workweek was validly implemented
under procedures in effect in 1999.)

 

In 2004, a group of
employees that wasn’t employed at Brinderson in 1999 filed a class action
lawsuit for unpaid overtime, charging that they were entitled to overtime when
they worked more than 8 hours in a day—even though the 4/10 alternative
workweek was in place. The basis of the employees’ claim was that after A.B. 60
(the legislation authorizing this wage order to be adopted) and Wage Order 16
took effect, Brinderson was required to conduct a new alternative workweek
election, which it didn’t do.

 

Wage Order 16 sets out
various alternative workweek schedule requirements. One provision calls for a
new secret ballot election whenever the number of people employed for at least
30 days in the work unit that adopted an alternative workweek schedule increases
by at least 50 percent above the number who voted to ratify the schedule. Here,
the employees claimed that after the 1999 secret ballot election, at least one
Brinderson work unit increased in size by more than 50 percent.

 


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Brinderson countered
that the 1999 alternative workweek was valid. The company argued that Wage
Order 16 didn’t invalidate the schedule or require another election because
Wage Order 16 itself wasn’t valid. Brinderson contended that there was no
rational explanation for the IWC imposing a requirement that a new election be
conducted when the work unit increased by more than 50 percent.

 

Construction Wage Order
Upheld

But a California appeals court has now upheld Wage
Order 16 and the IWC’s authority to adopt it.
1  As to the new election
requirement, the court pointed out that the IWC clearly set out its reasoning
in the wage order. There, the IWC reaffirmed the state’s commitment to the
eight-hour workday and daily overtime, emphasizing that decisions to adopt or
repeal an alternative workweek lie with employees. Further, it pointed out that
alternative workweeks can be adopted or repealed only with a two-thirds vote of
the affected employees— and when the number of affected employees increases by
50 percent, those who originally voted for the workweek may no longer represent
the vote of two-thirds of the current employees. Thus, a new election is
warranted to give the new employees a voice in
deciding whether they want to work the alternative
workweek schedule.

 

The case will now return
to the lower court to determine whether Brinderson was, in fact, required to conduct
additional elections under Wage Order 16. Note that this case isn’t the first
one challenging Wage Order 16. Last year, another California appeals court invalidated a meal
period exemption contained in this wage order.


Alternative Workweek
Overview

Whether you’re in
construction or another industry, it is important to understand the ground
rules for alternative workweek schedules, which can provide you and your
employees with flexibility around the eight-hour daily overtime rule. Here’s a
look at the basics, although you still need to consult the particular wage
order(s) covering your employees because they contain some differences in the
procedures for adopting these schedules and the types of schedules that are
permitted.

 

The law provides that
after an employer proposes it in writing, employees may adopt a regularly
scheduled alternative workweek providing for up to 10 hours a day within a
40-hour workweek, without daily overtime pay (certain healthcare employees can
work up to 12 hours without daily overtime). An alternative workweek schedule
can be adopted only if it is approved in a secret ballot election by at least
two-thirds of a work unit’s affected employees. The regularly scheduled alternative
workweek proposed by the employer can be a single work schedule that would
become the standard schedule for all workers in the work unit, or it can be a
menu of work schedule options from which each employee in the unit can choose.

 

If an alternative
workweek schedule is approved, the employer has to pay overtime only for hours worked
in excess of the approved daily schedule. So, for a 4/10 workweek, overtime at
the rate of time plus one-half would be required for more than 10 hours on a
regularly scheduled day, and double time would be required for more than 12
hours. Overtime is also required for all work on a nonregularly scheduled day. Note
that Wage Orders 14 and 15 don’t contain alternative workweek provisions, but
employers covered by those wage orders can adopt alternative workweeks under the
general provisions in the Labor Code.

 

The new decision is
online at www.courtinfo.ca.gov/opinions/continue.htm.

 

_

1 Small v. Superior Court
(Brinderson Constructors Inc.), Calif.
Court of Appeals (Dist. 4) No. G037041, 2007