Everyone is familiar with the traditional work schedule: 8:00 a.m. to 5:00 p.m. and five days per week. However, many people may not be aware that California offers another option: the alternative work schedule (“AWS”). AWS allows employees to shorten the days per week that they work, while still maintaining a work schedule of 40 hour per week. Many employees prefer AWS because it allows them to maintain a better work-life balance. Additionally, employers may also be favorable to AWS because it allows employers to limit the amount of daily overtime they must pay to their employees. Although this seems like a win-win situation for both the employer and the employee, what are the guidelines for implementing AWS in California and what are the legal ramifications if AWS is not implemented correctly?
What is an Alternative Work Schedule?
A normal work schedule, which is generally 8:00 a.m. to 5:00 p.m. and five days per week, is governed by California Labor Code § 510. According to California Labor Code § 510(a)(1), employees under a normal work schedule may not work more than 8 hours in one day, without being compensated at the overtime rate of time and a half. However, this does not apply to an employee who is working under AWS. AWS is governed by California Labor Code § 511. According to California Labor Code § 511(a), employees under AWS may not work more than 10 hours per day within a 40-hour workweek without overtime compensation. Some common examples of how AWS is implemented are 4/10 schedule (employees work four 10-hour days in a workweek) or the 9/80 schedule (employees work 80 hours in 9 days over two workweeks). Many employees prefer AWS schedules such as these because they are able to accrue the same amount of hours as a normal work week, but they are allowed more days off during the month. Similarly, many employers prefer AWS because they do not have to pay as much daily overtime to their AWS employees, since overtime kicks in later than it does for employees under a normal work schedule.
How is an Alternative Work Schedule Implemented by a Company?
Employers may propose a standard alternative work schedule or a menu of alternative work schedule options to “work units” within the employer’s business. Under California Labor Code § 511(i), a “work unit” refers to a division, department, job classification, a shift, a separate physical location, or a recognized subdivision thereof. A work unit may also consist of an individual employee as long as the criteria for a work unit has been met. However, employers may not adopt, implement, or impose AWS on employees unilaterally. According to California Labor Code § 511(a), AWS must be approved in a secret ballot election by at least two-thirds of the affected employees. Additionally, the Industrial Welfare Commission (“IWC”) Wage Orders provide additional election requirements that are applicable to specific industries:
- the proposal must be in writing,
- a duly noticed meeting must be held at least 14 days prior to the secret ballot vote,
- a 30-day waiting period must be given between the election and implementation of the AWS, and
- employers cannot intimidate or force employees to vote for AWS.
If any of these applicable requirements are not met, the employer may not be allowed to implement AWS. Thus, the employer bears the burden of ensuring AWS procedures are followed.
AWS can be a wonderful alternative to a normal work schedule for both the employer and the employee. The employer is given a break on daily overtime costs and the employee has more of a work-life balance. However, it is important that employers refer to and follow California Labor Code §§ 510 and 511, as well as the applicable IWC wage and orders, before implementing AWS. If the employer does not follow these guidelines, the employer is opening themselves up to liability.