Episode 124: Adopting Alternative Work Schedules

Welcome to the Workplace, a podcast by Cal Chamber. I'm Erica Frank, Cal Chambers executive Vice president and General counsel. And with me on the podcast today is Matthew Roberts, one of Cal Chambers, employment law experts and frequent commentator on the Workplace podcast. Welcome, Matt.

Thanks, Erica. Glad to be here.

As always, to today, we're going to be discussing an issue that has been coming up quite frequently on the Cal Chamber Labor Law helpline, and that has to do with alternative work week schedules. And Matt, I don't know about you, but it's not one of those common questions we typically receive on the helpline. However, over the last maybe month or so, we've definitely seen an uptick.

Yeah, absolutely, Erica. And I think what we're starting to find and notice here is as employers are starting to think about what the return to work situation looks like, whether it's kind of a hybrid or maybe a continuing remote situation, employers are trying to explore ways to maintain that flexibility that they had to impose during the pandemic as we move forward into the future.

And I commend all of those employers that have reached out and actually asked about alternative work week schedules because, you know, for a long time the acronym wasn't really well known. So it's great that at least employers know there's these or it's just the word of art that's been commonly used. But in California, alternative work week schedule is a very specific schedule that has a lot of hoops and hurdles that go along with it, which we'll talk about in a moment. But I think you're right, Matt, as our employers are starting to plan out what the work environment is going to look like and how to accommodate work schedules, whether that's a hybrid method of a few days a week folks are physically in the office or whether they're trying to figure out how to allow employees to continue maintaining the work life balance that they've had. And some may be saying they hadn't because they've been working remotely. But a lot of news reports are talking about employees wanting to continue having some kind of remote life. So to that end, I think a lot of employers are exploring the different ways within which they can have folks back while at the same time maintaining that remote life. So before we talk about flexible work schedules, let's really address this alternative work week schedule. I mean, what is an alternative work week schedule?

Yeah, so alternative work week schedule has a specific legal meeting here in California. And really for employers, the alternative work week schedule is the way to create certain shift lengths that don't require employers to pay overtime. Because as we know, traditionally here in California, if an employee works more than eight hours in a day or more than 40 hours in a week, we have to pay overtime for those hours in excess of those regular times. With the alternative work week schedule, this is really a way for employers to set schedules such as those commonly known 4 tens, the 9, 8, 80 schedules, without having to pay that daily overtime. The real issue, and we'll talk about the process in a moment, is that California requires employers to really jump through a lot of hoops to establish a valid alternative workweek before they can take advantage of that exception to the overtime rules.

So where should employers start?

Yeah, really the starting point is your wage order. And this is really the starting point with almost all things wage and hour related. California has a number of wage orders that are specific to various industries and employment. And so for us as employers, there is a particular wage order that governs our specific industry. And within that wage order, there's all these various rules. And sometimes the rules are different across industries. And alternative work week is one of those situations where in some wage orders, there's some different rules for shift lengths or procedures for establishing the alternative work week that are specific to that wage order that may not be the same for other industries and other wage orders. And so the starting point really is we need to figure out what is the wage order that applies to our industry and to take a look in that wage order to see what is the specific process that we need to follow for our specific industry and what are the different rules and tweaks that might apply.

And once we've identified our wage order and we've actually read through it, because if your wage order allows for alternative workweek schedules, it is spelled out in your wage order, then employers need to really do some strategic planning. And what I mean by that is, for one, they do have to decide, you know, what employees are we going to bundle into this alternative work schedule. What does that really mean, Matt?

Yeah, so for employers, the first step, once we figured out if we can have an alternative work week under our wage order, is to determin what's known as the work unit, or essentially what is that class of employees that are going to be subject to or have the alternative work week available to them. And the work unit is really a loose definition. It's essentially one or more non exempt employees in a specific division department, could be a job classification, could be at a specific physical location, really one that the employer gets to define as what the work unit is. And so this is what Erica, you're really talking about with regards to strategic planning is what class of employees do we want to make this alternative work week schedule available to because it works with our operations. And once we figure that out, let's define that work unit. Because once we define that work unit, then that's going to really dovetail into the next aspects of the process, such as who will be able to participate and whether or not we establish an alternative work week through an election process and developing the actual schedule itself as we'll talk about in a moment.

Matt, I want to just pick up on a statement that you had made at the beginning and that was defining one or more non exempt employee. And the reason that I want to highlight that is our exempt employees are not factored into this alternative work week schedule, Correct?

Absolutely correct, Erica. Remember, when we classify employees as exempt, that really means that they're exempt from many of the wage and hour rules that apply to non exempt employees, such as overtime. And remember, with altern alternative work weeks being a way for us to create different schedules that don't require us to pay overtime, even though they may work more than eight hours in a workday, we're only concerned about this for our non exempt employees. For our exempt employees, of course, the only real rule with that is that we pay them that set salary, they have those exempt job duties, and then they work whatever hours they want because we don't have to worry about overtime with them. But with our non exempt employees, that's really who this alternative work week schedule is for.

Excellent. And that would be true as well. Through the entire alternative work week process, it's really focusing on our non exempt employees. Our exempt employees are in a different bucket, so to speak. They're not associated with the process.

No, because they're not affected employees. And so they wouldn't participate in this process at all.

All right. So once the employer defines the work unit, whether that's the entire organization, whether it's just a department or a division, there's quite a bit of flex that the employer has is defining what that work unit would be made up of, for whom it would be made up of. What's the next step that employers need to make sure?

Once we figure out who is going to be our work unit, then we need to decide what is the alternative workweek schedule we would like to propose or to set. And you know, as I mentioned earlier, on some common ones that we see are those, you know, they work four days in a workweek, 10 hours each day. Otherwise known as four tens, or what's also commonly referred to as the nine schedule. This is where employees may work, you know, nine hours, you know, four days a week, have one Friday on and one Friday off. In order for them to have this extra day off during the week, they still get their 80 hours, but only over nine days instead of 10. And what the employer can do is they can propose one option. They can propose a menu of options that would be available to this affected work unit. That's totally up to the employer and what's effective and beneficial for operations. So really, the next step is figuring out, okay, now that we know that our work unit, what is the schedule that we want to make available to that work unit?

And then as far as determining that schedule, does the employer need to provide the proposed schedule to the employees who would be affected?

Yes. So we need to present a written proposal to those employees.

Including all disclosures about what the schedule may mean. Right. Like this is how the schedule would work and how overtime wouldn't come into play with this schedule kind of thing. And then we would need to hold a meeting with our employees to inform them of this schedule proposal, as well as the fact that there will be an upcoming election. And this is where this real technical requirement of the alternative work week comes into play, because we have to hold that meeting 14 days prior to any election. So the employees need to have at least two weeks to kind of think about and ruminate over, you know, do I want to vote for or against this alternative work week schedule before they have the election. So that's a real key timing component of this, is let's figure out the schedule to provide a written proposal to them and then to have a meeting to answer any questions for them at least two weeks before the election.

Okay. And then let's talk about the election process, because this is. This is where it really gets detailed. So as far as the election's concerned.

Secret ballot election, is there a date that's set?

Yeah. So we hold, like I said, we set a date for the vote. It is a secret ballot election, which means we don't have everyone sit in a room and hold up their hands yes or no, or say yay or nay, like in old congressional times, but secret ballot. And so the data is set for the election, and all affected employees have the right to vote in the election. So that means all those employees who are in that work unit who are affected by the schedule, again, non exempt employees only, not our exempt ones, and then they hold the election on that date of the vote. And in order for the alternative work week to pass or for us to be able to implement it, at least 2/3 of that affected work unit need to vote yes for this. And that's not just 2/3 of the people who vote, it's two thirds of the whole unit. So if people choose not to vote, they still count towards the overall work unit. And we will still need two thirds of that entire work unit to have said yes. We want this alternative work week schedule.

Okay, excellent. So if it passes, is there anything more that the employer needs to do or can they just institute the alternative schedule the next day? No. Yeah.

One more step for everybody and a very important step. We need to file the election results with the Department of Industrial Relations, a specific office of Policy, Research and legislation. There's a lot there. This is really the Labor Commissioner's Office, a division of that that we send the election results to via mail within 30 days of that election. The Labor Commissioner's office, as well as HR California, for our members out there listening, has the addresses to where to send these results. But that's what we need to do to certify the election because this becomes, this becomes a public document, essentially, in that the Labor Commissioner keeps a list of those organizations that have a valid alternative workweek schedule pursuant to this process. So we need to file those election results essentially with the Labor Commissioner's office.

Excellent. And then of course, with everything, it feels like with everything under the Labor Code and in California employment law, there is the requirement of maintaining records about the election. You know, basically everything we've talked about, plus more.

Yeah, exactly. I mean, we're maintaining the records of the written proposal we submitted to the employees, minutes from the meeting that we held to demonstrate that we had that meeting, records of the election procedure, how we did the secret ballot, the actual election results themselves, a copy of the filing with the Labor Commissioner's office, and any other documentation that may relate to the creation of this. We're keeping all of those records.

And one of the things that it's really important for us to press upon to all of those who are listening right now is, as Matt had mentioned, the alternative work week process is detailed and every step needs to be taken and taken correctly in order to have a valid alternative work week schedule. And the reason we say that is if it is invalid. So, for example, the election results were not submitted, then you don't have the protections that you otherwise would have as far as allowing employees to work, let's say, a 10 hour day without incurring overtime. So that's really important. Now, Matt, with an alternative work week schedule, does that mean that the employee never has to pay overtime to these employees?

No. So you only don't have to pay overtime within the confines of that schedule. But if an employee works more than 40 hours in that work week, still overtime will apply for any hours in excess of 40 in that work week. And if they happen to work hours in excess of the set schedule, for example, if we have four tens and someone works 11 hours one day, one of those hours will still be overtime. So overtime will still apply whenever they're working hours in excess of that schedule that we set.

Excellent. Now, for those who are listening and have decided that's just too complicated, we just want to figure out how to get our employees back in the office, accommodate the schedules that they're asking for. What are some things that we can throw out to our listeners issues to keep in mind as they're working through their schedules and planning for the fall, and I say the fall. I realize many employers have brought employees back already, but we're hearing a commonality of after Labor Day is when folks are expected to come back. So what are some things that employers should be considering as they start to plan on their hybrid schedules or flexible schedules?

Yeah, so the flexible schedule is still something that's available. Of course, if we don't set an alternative work week schedule, we'll still need to be cognizant that if a non exempt employee ends up working, you know, really late on one day to kind of make up for some of the time they didn't work in a day earlier, you know, we may be able to use that makeup time exception to overtime if they request it in advance and they don't work a certain number of hours. We can also kind of juggle the way our work week is now formed. So that way, if we see that through our flexible scheduling, that it's easier for us to maintain a 40 hour work week and a more non traditional schedule as opposed to, say, Saturday to Sunday kind of, or I'm sorry, Sunday to Saturday work week schedule, we can always decide to define our work week in a different way or we can, you know, break up, you know, the working hours so that, you know, the employee has the ability to set their own times to work, you know, their shifts earlier in the day or later in the day, if this works operationally. So there's still a lot of flexibility outside the alternative work week schedule. It's just going to be really important for employers to always Remember that with our non exempt employees, we need to keep track of that time. You know, as we talked about, with the appropriate records for alternative work week, it's the same for our hours worked and that we need to keep track of that time. And so we need to remind our non exempt employees that, you know, they need to continue to fill out their time cards or otherwise maintain their time record so we can audit and make sure that we're paying them appropriately and making sure that this flexible schedule isn't incurring too much liability for us.

And one of those hot topics that I always love to mention is those meal and resp break considerations. Those are still in play and they are actually still in play with the alternative work week schedules as well. So those do still need to be followed and implemented, even if we do have a valid alternative work week schedule. But the meal and rest break period is something that we always like to remind our employers whether the workforce is 100% in the office again or you follow that hybrid model, because those requirements are still, still remain in place. And the other thing to keep in mind too, and a question that we often receive on the helpline is what about our exempt employees? Our exempt employees, they don't have to clock in and out. Can we still require them to come back to the office? And Matt, what's the answer to that question?

Yeah, absolutely. So, you know, with our exempt employees, we can still require them to be available or being present at the office during business hours as we determine for our operations. So requiring an exempt employee to be available during specific hours doesn't affect that exemption status because we have the operational need to have someone available there. I always like to use myself an example with this. I'm an exempt employee. I work on the helpline frequently. Hi to everybody who's, who's had a question answered by me who's out there. But I have to be available certain hours, right, Erica, because our helpline is only available certain hours. But this doesn't affect my exemption status. But this is our business needs. So employers who still have specific business needs for their exempt employees to be available or present somewhere during specific business hours is something that employers can still do without worrying about affecting that exemption status.

100% correct and well said. Thank you, Matt. Well, I think that wraps it up. We've certainly hit on a number of important topics and topics that are relevant and have been placed members have been contacting the helpline about. So thank you, Matt, for joining me today.

It was absolutely my pleasure, Erica.

Thank you. And thanks for joining us on the Workplace. Please comment, share and subscribe to Cal Chambers podcast by visiting calchamber.com.