Rules Accompany California’s Alternative Workweek Schedules

While most companies follow a traditional workweek schedule of five 8-hour workdays, alternative workweek schedules are becoming more attractive for some employers and their employees. “Compressed” schedules, such as four 10-hour days, can benefit employees by offering more full days off for personal commitments. Employers who have the opportunity to schedule longer, uninterrupted shifts may increase productivity. This is especially true where certain days of the week are consistently busy, while others are slow.

Daily Overtime Exceptions

Non-exempt employees in California earn daily overtime when they work over 8 hours in a workday or on seven consecutive days in a workweek, even if their hours for the workweek do not exceed 40. However, an AWS can make “compressed” work schedules less expensive by allowing an exception to the daily overtime rules for a regularly scheduled workweek with more than 8 hours of work in a 24-hour period.

AWS’s Have Rules

Employers need to read the fine print before embarking on the AWS process because mistakes can result in costly overtime liability and penalties. Below is a general road map for establishing and maintaining an AWS, along with common pitfalls to avoid. CEA members can get more detailed information from our Alternative Workweek Schedule Toolkit.

Steps to Establish an AWS

First, check your applicable Wage Order(s). Specific procedures and requirements for types of AWS schedules can vary.

In general, to implement AWS, the employer will need to:

1. Identify the work unit.
   • While the definition of a work unit is fairly broad, this is an area worthy of significant attention. If the AWS passes, all employees hired into the work unit are part of the AWS.
2. Provide the employees with a detailed written agreement which includes (among other things) the proposed schedule or a proposed menu of schedule options from which they can choose. Employers have to specify the number of regularly recurring workdays and work hours each week. At this stage, employers are not yet required to identify actual days of the week or start/end times. For example, it would be okay to identify “four, 10-hour workdays per week.” Note that, under most Wage Orders, the AWS exception from daily overtime extends up to 10 hours/workday.
3. Schedule an election and have a meeting of the employees at least 14 days before the election. Both the meeting and the election must take place during regular working hours at the worksite.
   • Implement measures to ensure the integrity of the election. Only members of the work unit can vote in the AWS election, and the election must be by secret ballot.
4. If at least 2/3 of affected employees vote in favor of the AWS, it passes.
   • According to the DLSE, a member of the work unit who does not vote is considered to have voted “no.”
   • The employer must report the results to the Department of Industrial Relations within 30 days.
5. Employers must wait at least 30 days after announcing the final results of the election and must make reasonable efforts to find an 8-hour/day schedule for an employee eligible to vote in the election who can’t work the AWS, before employees work the AWS. Employers must also define the actual days of the week and start/end times.

Managing the AWS

Many obligations, such as California’s meal and rest period rules, will stay the same. However, an AWS will bring several new or different requirements. Some important changes include:

• Employees on an AWS are entitled to a predictable work schedule. Employers must schedule regularly occurring work days and starting and ending times.
• Overtime obligations are changed under an AWS, but not eliminated.
  • Employees under an AWS receive one and a half times their regular rate of pay for all work:
    • In any workday in excess of the regularly scheduled hours established by the AWS, up to 12 hours a day.
    • Beyond 40 hours per week.
  • Employees under an AWS receive two times their regular rate of pay for all work:
    • In excess of 12 hours per day.
    • Over eight hours on days other than those regularly scheduled by AWS.
  • If an employee is asked to work a shift outside of their regular AWS, all hours they work on that day would be considered overtime.
• An employer may grant an employee’s request to substitute one day of work for another day of the same length on an occasional basis without the payment of overtime if the request is for the employee’s personal needs. Make sure to get the request in writing to prove it was not employer-initiated.

Alternative Workweek Schedules can help make non-exempt employee compressed schedules more affordable for California employers, but they are formal arrangements with numerous rules and procedures. Employers need to familiarize themselves with all the requirements in advance of taking action.

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