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What Would a Mandatory Four-Day Workweek Mean for Californians?

Most people define a standard workweek as 40 hours spent at the job. Hours worked in excess of those 40 hours are paid overtime (time and a half or double time). This is the model that most companies follow, but does that make it the best?

 California Assembly Members Christina Garcia and Evan Low proposed AB 2932 in February. The new bill proposes changing overtime rules that essentially change the standard workweek of 40 hours to a shorter 32-hour week. If this bill passes, what would it mean for Californians?

 Why the Interest in Shorter Workweeks?

 In 2021, Iceland released the findings from a four-year trial run of a shorter workweek. A total of 2,500 workers from around the country were given the chance to work 35 to 36 hours a week instead of 40. The workers’ salaries remained the same during this four-year experiment.

 The findings proved that 40 hours don’t equate to more productivity or success for a business. Workers with shorter workweeks were less stressed, happier, and able to achieve a beneficial work-life balance. Burnout rates declined, too. Because workers were not burning out, they didn’t leave their job, lowering the incidence of high employee turnovers.

 In addition to the effects on the workers, companies that participated didn’t find their revenues or productivity declined. Happier workers were just as productive as those working longer hours. The trial was so successful that about nine out of ten Icelandic workers now have shorter workweeks.

 As news of Iceland’s successful experiment spread, other countries started taking a closer look. Great Britain ordered a panel to look into shortening workers’ hours. Spain launched a three-year trial of 32-hour workweeks for interested companies, promising to keep salaries the same.

 In Japan, Microsoft implemented a summer challenge where employees could pick their work schedule. By the end of the summer, workers were 40% more productive and happier.

 What Is AB 2932?

 California AB 2932 would change the current overtime policies. Instead of getting overtime pay after 40 hours of work, employees would get overtime pay after 32 hours. This shortens the workweek to 32 hours a week. It doesn’t guarantee that workers would get an extra day off, but it would ensure they get paid overtime after 32 hours. Companies cannot reduce current wages to account for the overtime pay.

 Suppose a worker is making $30 an hour. A company couldn’t drop that employee’s pay to $15 an hour to get dodge paying the extra for overtime hours.  In addition to being unable to do things like that, companies caught breaking the new law would have to complete a state-mandated program.

 Companies with fewer than 500 employees are bound by a different rule. They can continue with 40-hour workweeks, but they need to pay overtime at a rate of 1.5x for any employee working more than eight hours in a day, and 2x for employees working more than 12 hours in a day. If an employee has to work seven days in a row, the overtime pay rate is 2x after eight hours.

 Only certain companies will be required to meet this new law. It’s specific to companies with more than 500 workers. Small companies with minimal staff could stick to 40-hour workweeks in most situations.

 Employers in large companies are able to avoid these overtime pay requirements by having a collective bargaining agreement in place. Another option would be to use an alternative workweek schedule.

 The Pros and Cons That People Are Talking About

 The bill is still undergoing changes. Whether it passes or not is anyone’s best guess, but what if it does? Would employers need to switch to a 32-hour workweek to avoid having to pay time and a half?

 One fear involves staffing shortages. If a company is used to having employees on-site seven days a week, what can they do if they have to provide 32-hour workweeks, essentially cutting back to four days? This is actually one of the easier issues to fix. Companies could shift to having some of their workers working certain days each week while others work the others.

 It does take some planning, but splitting up your workers to ensure that there is enough staff each day without exceeding 32 hours is possible. Alternate schedules to make sure every employee gets weekends off every few weeks.

 Another worry is that labor costs will increase. If a company has to increase staffing to ensure there are enough workers each day, extra funds are needed to cover the benefits package offered to each employee. One thing to remember is that countries that have switched to shorter workweeks find their employees are more productive. If employees get more done, the need for extra staff may not impact a business at all.

 There are pros, too. One of the biggest benefits of shorter workweeks is that employees are happier. If people are happy and not burning out, they’ll stay. Companies end up saying a lot of money over having to constantly train new hires. Training impacts productivity when a company has to pull an experienced worker from their job to train someone else. That can negatively impact businesses. Workers remain at jobs longer, leading to more stability and productivity.

 California’s Current Policies

 Currently, California’s labor laws require overtime pay to workers who exceed 40 hours of work in one week or more than 8 hours in one day. This includes unauthorized hours, too. If an employee works 10 hours to catch up on work orders, but management hadn’t approved it first, overtime pay is still required. Companies that do not pay overtime to qualified employees face misdemeanors.

 There are exceptions to overtime rules. Some workers do not qualify for overtime pay. Others may need to work more than 60 hours before overtime pay is required.

  • Airline workers who work less than 60 hours due to a temporary schedule change may not qualify for overtime.
  • Employees who work unauthorized overtime can be disciplined, such as given a written warning.
  • Family members (child, parent, or spouse) are exempt from overtime pay laws.
  • National service program employees such as AmeriCorps workers are exempt from overtime rules.
  • Outside salespeople are not paid overtime.
  • Taxi drivers, carnival ride operators, actors, and commercial fishing crew members do not qualify for overtime rules.
  • Truck drivers with hours regulated by U.S. DOT codes find the federal laws apply.
  • Union workers are bound by the overtime rules in their contracts.

There are also workers in computer software, executive or administrative positions, and state or government workers who don’t always qualify for overtime. There are many exemptions. It’s important to regularly read the government’s Overtime Exemptions FAQ page to keep up with the current rules and intricacies of those rules.

Are You Being Paid Overtime Wages?

You’ve been working 50-hour workweeks and not getting any extra pay. You figured your company’s payroll specialists know what they’re doing. Never assume they’re right.

 If you’re uncertain whether you should have been paid overtime for all of your hours in excess of your typical 40-hour workweek, it’s best to talk to an expert. An attorney in California’s wage and employment laws can help you understand your rights.

 Talk to Shegerian Conniff. Initial consultations are free, and you’ll have a better understanding of the next steps to take to ensure you’re being paid for the overtime you’re working. We’re here to ensure you get the wages you’re due.

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