The Industrial Welfare Commission (IWC) has had jurisdiction over working hours since 1913. For 67 years this jurisdiction covered only women and minors. In 1980, the California Supreme Court upheld the adoption of final wage orders incorporating an eight-hour workday for all people. Thus overtime was required for all hours worked in excess of eight per day as well as those in excess of 40 hours per week. In 1998, the IWC, recognizing the need for more flexibility in work schedules to enable employees to respond to current day work and life needs amended five of the wage orders (previously upheld by the California Supreme Court) resulting in the elimination of the requirement to pay overtime for more than eight hours of work per day. Thus, effective with the amendments, overtime was required only for more than 40 hours of work per week. The flexibility in most work schedules came to a grinding halt with the signing by Governor Gray Davis of AB 60, introduced by Assemblymember Wally Knox in 1999. In accordance with AB 60, effective January 1, 2000, overtime pay for more than eight hours per day became the general rule in California. AB 60 does provide for alternative workweek schedules but the process is burdensome and requires adoption in a secret ballot election by at least two-thirds of the affected employees. There is one major exemption from the overtime requirement of AB 60 which applies only to employees covered by a valid collective bargaining agreement. Thus union employers with a valid agreement (containing certain restrictions) are not subject to the more than eight hours per day overtime requirement. Now, more than ever, flexible workweek schedules are needed to enable quality of life and to reduce costs of living. In most families, both husband and wife need to work and are left with little quality time to spend assisting their children with homework and for parent-child bonding. Almost everyone in California experiences the daily frustration and stress resulting from traffic congestion that could be significantly reduced by flexible work schedules. Additionally, with the current skyrocketing prices of gasoline, most people are looking for ways to drive less. A 4-day, 10-hour per day, workweek would allow working people to drive one less day per week. AB 2127, introduced on February 20, 2008 by Assemblymember John J. Benoit (R-Riverside) would authorize individual employees, with the approval of their employer, to work up to ten hours per day within a 40-hour workweek, without overtime, for workplaces with less than 25 employees. The agreement between the employee and employer must be in writing and must be terminable by either employee or employer at any time upon seven days’ advance written notice. In looking at AB 2127 one might think that passage should be a slam-dunk. Who would be against a bill that seems as logical as this one? The fact is that it failed in the first vote of the Assembly’s Labor and Employment Committee. Additionally, there have been a number of similar bills in 2005, 2006 and 2007 that have all failed. Why did this happen? Who could be against a bill that merely allows an employee and employer to agree on a flexible workweek? The “who” consists of approximately a dozen labor unions that already have the right to bargain for a flexible workweek; the “why” appears to be that the unions want to restrict the ability to have flexible workweeks to union establishments, thereby providing an incentive for more companies to unionize. So what happens now? As I mentioned, AB 2127 failed in the first committee vote. But, what I didn’t say is that, after the bill failed, a motion was made for reconsideration and reconsideration was granted. It appears that the main reason that reconsideration was granted is that, unlike the previously unsuccessful bills, this bill applies only to companies with less than 25 employees, unlikely targets for unionization. Although this bill is restricted to smaller companies, it still can have significant impact on the quality of life issues since more than 80 percent of all California businesses have less than 25 employees. If you would like to give AB 2127 a better chance of passing, the most effective way to be heard is to write to the following legislators who are members of the Assembly’s Labor and Employment Committee: DeSaulnier, Fuentes, Gaines, Laird, Leno, Ruskin, Strickland and Swanson (Chair). Addresses of the legislators can be obtained on the California Assembly website: www.assembly .ca.gov. Make sure to send your correspondence to their offices at the Capitol. Gregory N. Lippe, CPA, is Managing Partner of the Woodland Hills-based CPA Firm of Lippe, Hellie, Hoffer & Allison, LLP, Chairman of the Valley Industry and Commerce Association (VICA) and a Director of First Commerce Bank.
AB 2127 For Better Quality of Life