California Modifies Its Alternative Workweek Schedule Rules

February 25, 2009

Summary

Last Friday, Governor Schwarzenegger signed a bill that modifies the rules regarding alternative workweek schedules.  The new law becomes effective in May of 2009, and is intended to give employers and employees more flexibility in utilizing alternative workweek schedule arrangements by permitting an additional scheduling option for employers, and by permitting employees to move between various schedule options as their personal needs may dictate.  While the improvements are best described as modest, this new law does make alternative workweek schedules more attractive for some employers.

Details

Almost 10 years ago, California reinstated daily overtime after a two year hiatus.  The law that did so (AB60), also re-introduced the concept of alternative workweek schedules (AWS).  In short, the law permits schedules that include shifts of greater than 8-hours, but without employees being entitled to any overtime premium.  For example, under an AWS, employees can work four 10-hour shifts, rather than five 8-hour shifts, and not be paid daily overtime.  Such arrangements must be proposed by the employer, and approved by 2/3 of the employees in the designated work unit in a secret ballot election.  While facially attractive, the law included sufficient drawbacks that have prevented widespread use of AWS agreements. 

One feature of the AWS rules is the option of providing employees with a menu of alternative schedules to choose from.  For example, employees might be permitted to select either four 10-hour shifts per week, or four 9-hour shifts and one 4-hour shift.  However, there were significant restrictions on this menu option.  The restrictions included a prohibition of including 8-hour shifts within the menu of options, and the lack of any ability for employees to regularly adjust their option selections.

This new law attempts to make AWS menu options more palatable.  To do so, it amends Labor Code section 511 to provide that:

1.  An AWS menu of work schedule options may include a regular schedule of 8-hour days.  Employees selecting this option would be subject to the daily overtime requirements that apply to employees not subject to an AWS agreement. 

2.  Employees who adopt an AWS agreement with a menu of options may, with their employer's consent, move from one schedule to another on a weekly basis. 

Additionally, the new law amends Section 511 to define the term "work unit," which is the group of employees that can be covered by an AWS agreement.  "Work unit" is broadly defined as "a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision thereof."  The law also notes that a single individual employee may be a work unit "as long as the criteria for an identifiable work unit" is met.  In other words, if the employee is the only person in his or her job classification, shift, or physical location, s/he can have his or her own AWS agreement.

What This Means

This new law makes the AWS menu of options alternative a bit more user friendly.  It allows greater flexibility to employers in the types of shifts that can be included (i.e. 8-hour shifts) and to employees in being allowed (with employer approval) to move between AWS options.  As a result, in some circumstances, this in an alternative worth reviewing.  If an employer already has an AWS with a menu of options, it may (depending on the language of the original agreement) need to hold a new AWS election to take advantage of this change in the law.  

Employers should keep in mind that AWS arrangements work best when employees' work schedules are well established.  This is because the primary deterrent to the use of AWS agreements remains the fact that when an employer requires (and in some circumstances, even permits) an employee to work on a workday that is not part of the employees regular schedule, the employer must pay the employee time and one-half his or her regular rate of pay for all hours worked up to 8, and double time for hours worked in excess of 8, on that workday.  Thus, employers considering an AWS agreement should determine their expected need for employees to work on days other than their regularly scheduled workdays before pursuing this option.

This e-update was authored by Michael Sullivan and Brenda Kasper. For more information, or questions, please contact Mr. Sullivan, Ms. Kasper or any Paul, Plevin attorney at (619) 237-5200


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