The fight over changing California's eight-hour overtime law has degenerated into more name calling and falsehoods than any labor-management battle in recent years. As is so often the case, small business owners are caught in the middle. It's time to set the record straight.
The Industrial Welfare Commission is holding public hearings on its proposal to change overtime laws so overtime pay will be required only after 40 hours in a work week. Current law requires overtime pay after each eight-hour day for non-union employees covered by IWC regulations.
The proposed change will conform California law with 47 other states and the federal government, which hold to a 40-hour work week for overtime pay. Small business owners overwhelmingly favor this change 90 percent supported it in a recent survey of the National Federation of Independent Business.
The change will permit employers to adopt more flexible working schedules for their employees; the advantage for employees is that it would allow them to work more than an eight-hour day and take compensating time off later. Employers now discourage this because of the overtime costs.
But labor unions and their allies among various politicians have raised a huge stink about the change, insisting the IWC is trying to repeal the eight-hour day and return California to some barbaric period in the past. What they don't admit is that labor unions often negotiate a 40-hour week, and thus abandon the eight-hour day, in labor contracts. If it is so sacrosanct, why are they willing to negotiate it away?
The fact is that flex time benefits both employers and employees. People want more time off. Employees often ask their employers for a few hours off for a child's medical appointment or a school function, with the promise that the employee will work extra hours later.
Under current law, if the extra hours exceed an eight-hour day, overtime must be paid. Small business owners, often struggling to make ends meet, aren't inclined to give employees time off during the day if they have to pay overtime when the employee makes up the time off.
Under the 40-hour work week, you could work six hours one day and 10 hours the next and the employer would pay for two eight-hour days. What's so wrong about that?
It's how the federal government calculates overtime for employees covered by federal law. In fact, some government offices allow employees to work eight and a half or nine hour days and take a day off when the overtime has accrued. Overtime pay after 40 hours of work in a week, not eight hours in a day, is the rule around the country, not the exception.
While union leaders and politicians yell that we are repealing the eight-hour day, the fact is exceptions are already allowed under existing California law. You can institute alternative workweek schedules now if two-thirds of the employees authorize it by secret ballot, but then all employees must follow that schedule.
The problem with this is that you can't just let an employee work a flexible schedule when the workload requires it everybody must be covered. It's so cumbersome only a few hundred employers in California use it.
The overwhelming majority of government employees are paid overtime only after a 40-hour week, as are many union employees as a result of collective bargaining agreements. But the ordinary business owner covered by IWC rules must pay overtime on an eight-hour day basis.
In a world of hectic schedules and changing lifestyles, flexible working hours are a real necessity. The IWC rule change allows flexibility and yet doesn't change anyone's pay as long as they work 40 hours in a week.
Nevertheless, labor is talking about an initiative to overturn the new rule, and politicians are threatening lawsuits.
How's that in anyone's interest? The IWC rule should become law and California should conform with federal rules and 47 other states on overtime pay.
Martyn Hopper is California state director for the National Federation of Independent Business.
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