March 16, 2023

Legislation making it easier to set up flexible work schedules has been named a job creator by the California Chamber of Commerce.

SB 703 (Niello; R-Sacramento) allows for an employee-selected flexible work schedule and relieves employers of the administrative cost and burden of adopting an alternative workweek schedule per division, which accommodates employees, helps retain employees, and allows the employer to invest these savings into growing its workforce.

Joining the CalChamber in supporting SB 703 is a coalition of employer groups and numerous local chambers of commerce.

California Process

California is one of the only states that requires employers to pay daily overtime after eight hours of work in addition to weekly overtime after 40 hours of work. Even other states that impose daily overtime requirements allow the employer and employee to essentially waive the daily eight-hour overtime requirement through a written agreement.

California, however, provides no such common-sense alternative. Instead, California requires employers to navigate a multi-step process to have employees elect an alternative workweek schedule that, once adopted, must be “regularly” scheduled. This process is filled with potential traps that could lead to costly litigation, as one misstep may render the entire alternative workweek schedule invalid and leave the employer on the hook for claims of unpaid overtime wages.

Currently, there are 44,837 reported alternative workweek schedules with the Division of Labor Standards Enforcement. According to the Employment Development Department, California has about 1.6 million employers. Therefore, less than 3% of California employers utilize the alternative workweek schedule option.

Given that the information in the database is according to work unit instead of employer, it is likely that less than 1% of employers in California are utilizing this process.

Desire for Flexible Schedules

Surveys and studies show employees want flexibility in their work schedules:

• In response to a recent CalChamber poll, 88% of voters agreed (49% of them strongly) that the state’s overtime laws should be changed to make it easier for employees to work alternative schedules, such as four 10-hour days.
• A survey by the Society for Human Resource Management revealed that 91% of human resources professionals agree that flexible work arrangements positively influence employee engagement, job satisfaction, and retention.
• According to Corporate Voices for Working Families and WFD Consulting, an in-depth study of five organizations that allow their nonexempt employees to have flexibility in their schedules found that employee commitment was 55% higher and burnout and stress decreased by 57%.

Women and low-income workers have suffered the most from the inability to have flexible schedules, feeling pressured to abandon career goals to care for children and fulfill household obligations.

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