California legislators routinely tout our state's economic prospects by noting its success in spawning innovative technology and "green" industries. That may be true, but these and other companies must struggle under a labor code designed more for fast-food workers and last century's assembly lines.
At issue are California's rigid overtime rules, which require companies to pay hourly employees time-and-one-half not only for time worked in excess of 40 hours a week — but for time worked beyond eight hours each day. As the state's Division of Labor Standards Enforcement declares, "Eight hours of work constitutes a day's work … ." But what works in the view of a Sacramento bureaucracy isn't necessarily what works for others.
"What I see a lot — a young mom or dad who wants to coach a soccer team and work four days a week," said employment attorney Michael Kalt of Wilson Turner & Kosmo in San Diego. The parent wants an individualized schedule, but to do so under current law means gaining two-thirds approval by the entire work "unit" and filing paperwork with the state. It means involving many employees in one employee's personal situation.
Yet an effort last year to allow for such "flextime" and free California from Industrial Revolution-era thinking on this matter was crushed by organized labor in an Assembly committee. Assemblyman Brian Jones (R-Santee) is bringing back a similar measure this session called the Workplace Flexibility Act of 2015. "It's surprising to many that California statute actually prohibits the option for most employers and employees to select alternative work schedules, which includes flextime, part-time, job sharing, telecommuting and compressed work weeks," Jones wrote to potential co-sponsors.
As the Assembly analysis for last year's effort explained, "The California Labor Federation, AFL-CIO argues that the reality is that it is the employer who has the most to gain, a significant financial incentive, in moving an employee from daily overtime to weekly overtime." Yet unions promote a double standard.
The Labor Project for Working Families, which included the labor federation's leader on its board, views flextime as an important option: "The flexibility that professionals and managers take for granted remain far beyond the reach of 70 million wage earners." Such flexibility, it says, promotes better education, health and family life.
So California unions demand flextime for their members even though they oppose it for everyone else. A recent court decision declared that collective-bargaining agreements can trump overtime law, which helps explain the hypocrisy. Unions lobby to maintain unwieldy rules, but union members are free to negotiate their way around them. This is more about promoting union membership than protecting workers' choices.
California is one of only three states with such inflexible rules, which were signed into law in 2000 by Gov. Gray Davis (D).
"It's a competitive issue," said Robert Lapsley, president of the California Business Roundtable. "Companies have flexibility with employees in other states. Here, they don't have that flexibility. So what are they going to do? … It's a job-determinant issue."
Sure, there are overtime exemptions for professionals, salespeople, administrators and other categories of professional workers, but the formulas are complex and company categorizations are subject to second-guessing not only by state officials, but by trial lawyers. "It's an open invitation for litigation," Lapsley added.
The new flextime bill would require an employee to fill out a state-created form recognizing "that work performed in excess of 10 hours in a day or in excess of 40 hours in a week is required to be compensated" at overtime rates. It would include a description of the specific flextime plan. The employee would have to certify the decision is "voluntary."
This sticks in my craw. Do we really need state officials policing these types of private workplace arrangements? Are Californians incapable of knowing what's best for themselves and their families?
This is a modest bill, yet it's unlikely to get traction given the union-friendly politics of the Capitol. Still, it would be nice if legislators recognized that innovative companies need more than rhetoric. They need some flexibility and freedom.