How to Implement Alternative Workweek Schedules in California

California Labor Code Section 511 and some Industrial Welfare Commission (IWC) Wage Orders provide for alternative workweek schedules. An alternative workweek schedule means any regularly scheduled workweek requiring an employee to work more than eight hours in a 24-hour period without overtime pay.

An alternative workweek schedule can be created for any readily identifiable work unit, such as a division, department, job classification, shift or separate physical location, with the approval by secret ballot election of at least two-thirds of the affected employees in the work unit.

Step 1: Determine Which Alternative Workweek Schedules Apply to the Organization

Not all IWC orders provide for alternative workweek arrangements. Alternative workweeks are provided for in Orders 1 through 13, 16 and 17.

The California Division of Labor Standards Enforcement Policies and Interpretations Manual explains the wage order provisions for alternative workweek arrangements. There are differences within the orders and among the industries covered by the specific orders, both in the schedules that may be adopted and in the election procedures to be used. Special alternative workweek rules apply for certain health care workers. Consequently, a careful review of the provisions of both the IWC orders and the Labor Code sections must be made to understand the alternative workweek rules. If an alternative schedule is not implemented correctly, the organization may be subject to significant liability for overtime wages.

Step 2: Identify Employee Groups

The next step is to carefully identify and select which group(s) of employees will be eligible for the alternative workweek schedule. The Labor Code defines a "work unit" as a division, a department, a job classification, a shift, a separate physical location or a recognized subdivision thereof. A work unit may consist of an individual employee as long as the criteria for an identifiable work unit in this section are met; for example, only one employee exists in a particular department or job.

Step 3: Determine Workweek Days and Hours

The organization may propose a single work schedule that would become the standard schedule for employees in the work unit or a menu of work schedule options from which each employee in the unit could choose. If the organization proposes a menu of work schedule options, the employee may, with the approval of the organization, move from one menu option to another.

Longer shifts/fewer days

Alternative schedules permit greater flexibility by enabling employees to work longer shifts on a fewer number of workdays and provide related benefits such as decreased commuting time and costs. These schedules also permit nonexempt employees to work more than eight hours in a day without incurring daily overtime. Common examples of alternative workweek schedules are the 4/10 (employees work four 10-hour days in a workweek) or the 9/80 (employees work 80 hours in nine days over two workweeks). The impetus for proposing an alternative workweek schedule may be based on business needs or on requests from employees.

An alternative workweek schedule should never be used as a means of avoiding paying employees overtime. Under existing California labor law, an alternative workweek is a week consisting of shifts of no longer than 10 hours per day within a 40-hour workweek, without payment of an overtime premium. Employees working an alternative workweek schedule exceeding the 10-hour per day limitation are entitled to overtime pay at a rate of no less than one-and-one-half times their regular rate of pay for all time worked between 10 and 12 hours, and at twice the regular rate of pay for any hours worked in excess of 12.

There are some general exceptions to alternative workweek schedules and California's general overtime law. See California Labor Code Section 511 and the applicable Industrial Welfare Commission wage orders.

A complete overview of these requirements is beyond the scope of this guide, and employers are encouraged to contact legal counsel before implementing any alternative workweek arrangement. There are numerous exceptions specific to certain wage orders and industries. Employers should double-check all wage orders applicable to their employee groups.

Here are several of the general exceptions for employees under an alternative workweek schedule; these apply to all wage orders except Orders 14 and 15:

• No overtime is required for a regular schedule of not more than 10 hours per workday within a 40-hour workweek.
• An employee should receive one-and-one-half times his or her regular rate of pay for any work in excess of the regularly scheduled hours in any workday beyond the schedule established by the agreement up to 12 hours a day or beyond 40 hours per week. This requires payment of overtime for all hours of work performed on any day that is not included in the alternative workweek schedule.
• Employers should double the employee's regular rate of pay for work in excess of 12 hours per day on regular workdays and for any work in excess of eight hours on those days worked beyond the regularly scheduled number of workdays established by the agreement.
• For all orders except Order 16, if the employer requires an employee to work fewer hours than those that are regularly scheduled, the employer must pay the employee overtime at the rate of one-and-one-half times the employee's regular rate of pay for all hours worked in excess of eight hours, and double the employee's regular rate of pay for all hours worked in excess of 12 hours for the day the employee is required to work the reduced hours.
• For Order 16 only, an employee who works longer than eight hours but no more than 10 hours in a workday, pursuant to an alternative workweek schedule, must be paid an overtime rate of not less than one-and-one-half times his or her regular rate of pay for any work in excess of the regularly scheduled hours established by the agreement.

Seasonal schedules

California's Division of Labor Standards Enforcement (DLSE) authorized a variant on alternative workweek scheduling in DLSE Opinion Letter 2009.03.23, whereby employers could use alternative workweek schedules during particular times of the year (e.g., a summer schedule), provided the schedules were fixed and regularly recurring and the employer adhered to the other requirements for adopting such schedules (see below). In that particular instance, the employer adopted a schedule that rotated between four nine-hour days and one four-hour day during the summer months and five eight-hour days during the rest of the year, thus allowing employees longer weekends during the summer months.

Step 4: Communicate Proposed Schedule Changes to Employees

After identifying which groups of employees will be affected and what the proposed alternative schedule will be, the employer must present a proposal in the form of a written agreement describing the proposed schedule's effects on wages, hours and benefits. (The organization may propose a menu of different options, including a regular five-day, 40-hour workweek, and employees may, on a weekly basis, shift between the different menu options that have been approved.)

The proposal must specify the number of workdays and the number of work hours for each workday under the alternative workweek schedule. It need not specify the particular days of the week or the particular schedule on each day.

Step 5: Hold Pre-Election Meetings

Prior to the secret ballot vote, the employer must have held meeting(s) with the affected employees a minimum of 14 days prior to the election to discuss the effects of the proposed alternative workweek schedule on the employees' wages, hours and benefits. A written disclosure detailing the information above must be included in the meetings. If at least 5 percent of the affected employees speak a language other than English, the disclosure must be provided in that language in addition to English. Employers are required to mail the written disclosure to employees who do not attend the meeting(s).

Step 6: Hold Secret Ballot Elections

For the alternative workweek schedule to be valid and recognized by the IWC, the proposed schedule must be adopted in a secret ballot election by at least a two-thirds vote of the affected employees in the work unit. The election must be held before the implementation of the alternative workweek schedule. A sample ballot may be provided with the written disclosure or at the meeting in advance of the election.

An election must be held at the worksite of the affected employees during regular working hours. (The employer must pay for all associated costs.)

Step 7: Notify Affected Employees/File Required Notices

Election results must be reported by the employer to the DLSE within 30 days of finalizing the results. DLSE instructions request that results be sent to:

Attn: Alternative Workweek Election Results
Department of Industrial Relations
P.O. Box 420603
San Francisco, CA 94142-0603

The following information must be included: name of the business, address, city, state, zip code, county, nature of the business, date of election, date of letter, final and full tally of the vote, size of the affected work unit, and work schedule.

If the proposed alternative workweek schedule is adopted pursuant to the secret ballot election, the organization should give notice to the affected employees. The notice should state a specific date on which the alternative workweek schedule will be implemented. That implementation date must be at least 30 days after the final election results.

Step 8: Implement New Alternative Workweek Schedule

Employees affected by a change in work hours resulting from the adoption of an alternative workweek schedule may not be required to work those new hours for at least 30 days after the announcement of the final results of the election.

Step 9: Respond to a Repeal by Employees

A group of employees affected by an alternative workweek schedule may repeal the schedule. In the case of a revocation of an alternative workweek schedule, one-third of the affected employees may petition to repeal; however, a new secret ballot election must be held, and a two-thirds vote of the affected employees is required to reverse the alternative workweek schedule. The election to repeal the alternative workweek schedule must be held within 30 days after the petition is submitted to the organization. However, the same group of employees who voted in an election to adopt or repeal an alternative workweek schedule cannot vote again within 12 months from the last election. If the alternative workweek schedule is revoked, the employer must comply within 60 days.

Step 10: Maintain Records

The employer should maintain all copies of alternative workweek schedule proposals, employee meeting communications and election results, as well as other supporting information and documentation, including documentation regarding hours and days worked and overtime pay. Time-keeping and records affecting specific employees can be maintained in individual personnel files; other types of documentation, such as election results, may be kept in a separate employer file.