Leon Worden

State steps backward on overtime law

By Leon Worden
July 30, 1999

nless you're a union worker, prepare for disappointment if you want to work a "flex-time" schedule after Jan. 1. Former Gov. Pete Wilson suspended wage orders that required overtime pay after eight hours of work in a day. As of Jan. 1, 1998, overtime had to be paid after 40 hours in a week.
    The change brought California's wage regulations in line with modern reality. Most Californians don't work eight-hour shifts in non-union factories anymore, like they did when wage rules were first implemented in 1916. Today, many couples share responsibilities, and there are many single mothers who can't work if it means a five-day-a-week schedule.
    With the 1998 change, Mom and Dad could spread 40 hours of work over four 10-hour days, or 90 hours over nine 8 1/2-hour days, and take little José to the doctor or soccer practice on their day off without jeopardizing their jobs.
    Clean air activists hailed the switch. California's air would be cleaner, they said, if people were driving to work four days a week instead of five.
    I don't know if the environmentalists were looking the other direction this year or if some back-room deal kept them at bay. Either way, the old eight-hour overtime rules are back, and this time, they're "hard-coded" into law. In some ways employers and employees are even worse off than they were with the old rules under former Gov. Jerry Brown.
    Starting Jan. 1, time-and-a-half must be paid after eight hours of work in a day, and double time after 12 hours. The new law, drafted by Beverly Hills Democrat Wally Knox, applies to more classifications of workers than before, and now, to be exempt, managers and supervisors must be paid at least double the minimum hourly wage ($23,920 a year).
    For the first time, employers and employees such as payroll personnel who make mistakes in paying overtime can face criminal charges and penalties ($50 for the first offense, $100 for the second, plus the amount incorrectly paid). Under the new law, an employee or group of employees can choose an alternate, flex-time schedule only if two-thirds of all employees in a company vote to allow it (although anyone with a flex-time schedule as of July 1, 1999, can be grandfathered in).
    Opposed by business groups such as the Santa Clarita Valley and California chambers of commerce, the bill became law last week, with backing from organized labor. This is curious, since union workers are exempt from the bill.
    Art Pulaski, executive secretary-treasurer of the California Labor Federation, AFL-CIO, said, "California unions are watching out for the best interests of the people who get up every morning, stay late for work and make this booming economy happen.... (The bill) just begins to restore fairness and decency to the California workplace."
    So... for altruistic reasons, the AFL-CIO is concerned for California's non-union workers? I don't buy it. In truth, the bill increases the power of California's labor unions at the expense of non-union employees. Since an employer must pay a non-union worker overtime after eight hours but doesn't have to pay overtime to workers covered by a collective bargaining agreement, unions can approach a prospective employer with a sweeter deal than what the new law allows for non-union workers. An employer wouldn't have to pay overtime to union workers whose agreement specifies, for instance, a four-day, 10-hour schedule.
    This affects some industries more than others— particularly health care, where nurses commonly work three 12-hour days a week.
    Nursing is "on hold" from the new law until July 1, 2000, so some details can be ironed out, but as it stands, on July 1 hospitals will have to start paying non-union nurses overtime after eight hours.
    Nurses at Henry Mayo Newhall Memorial Hospital will vote next month on whether to join the California Nurses Association, the state's largest nurses union. Under the new law, as of July 1 Henry Mayo would have to pay non-union nurses overtime (driving up the cost of health care), while it wouldn't have to pay overtime to union nurses after eight hours, if the CNA agrees.
    The eight-hour overtime law was a priority for the new governor, Gray Davis, and while he has complained that the Legislature isn't responsive enough to other parts of his agenda, Sacramento lawmakers have shown no such hesitation when it comes to special-interest legislation that will drive up the cost of doing business in California.
    There's a bill to hold employers accountable for workplace safety violations committed by independent contractors over whom they have no control. There's a bill to unravel recent reforms and boost workers compensation benefits. There's a bill to make it more lucrative to be unemployed by hiking unemployment benefits. There's a trial-lawyer bill to prevent employers from requesting arbitration to solve workplace disputes. There are more, and all are moving forward.
    I'm starting to long for the days when nothing ever got done in Sacramento. Because doing nothing would be better for California's employers and employees than what's going on now.
    Leon Worden is The Signal's business editor.

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