By Jodi L. Karpel, Esq.

State laws governing overtime, sick leave, and age discrimination in employment will change on January 1, 2000. As a result of three bills signed by Governor Gray Davis, AB 60, AB 109, and SB 26, there are substantial changes to California labor laws which require significant revisions to most employers' policies and procedures.

Daily Overtime Reinstated (AB 60)

AB 60, known as the "Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999," reinstates the requirement to pay daily overtime in California. Although AB 60 also provides for alternative workweeks and allows for an employee to "make-up" lost time without earning overtime pay, AB 60 sets forth specific procedures for implementing these optional procedures. For most employers, the new law will go into effect on January 1, 2000.

AB 60 requires employers to pay an employee one and one-half times the employee's regular rate of pay (1) for all hours worked in excess of eight hours in any workday, (2) for all hours worked in excess of 40 hours in any workweek, or (3) for the first eight hours worked on the seventh day of work in any workweek. In addition, the law requires employers to pay an employee twice the employee's regular rate of pay for any work in excess of 12 hours in a workday, or for any work in excess of eight hours on the seventh day of work in any workweek.

Despite its daily overtime requirements, AB 60 also allows employees to "make-up" time without earning overtime pay. An employer may approve an employee's written request to make-up work time that is lost due to the employee's need for time off. If the make-up time is worked during the same workweek as the time lost, and if the total hours worked, including make-up time, does not exceed 11 hours in one workday or 40 hours in one workweek, the make-up time is not required to be counted when computing overtime.

An employer may propose that its employees adopt a regularly scheduled alternative workweek. An alternative workweek allows the affected employees to work up to ten hours per day within a 40 hour workweek without the payment of overtime. In order to adopt an alternative workweek, it must be approved in a secret ballot election by at least two-thirds of the affected employees in the work unit. If the employee's approve the alternative workweek, they will only receive overtime for hours worked in excess of the alternative schedule. If the alternative schedule is approved, employers must make a reasonable effort to accommodate employees who are unable to work the alternative schedule. In order for the alternative workweek to be valid, the results of the election must be sent to the Division of Labor Statistics and Research within 30 days after the results are final. Effective January 1, 2000, alternative workweek schedules currently in existence may be null and void, depending upon the nature of the alternative workweek and the date the alternative workweek was established.

Employers currently using alternative workweeks and employers seeking to implement alternative schedules should consult with labor counsel to ensure that they are in compliance with AB 60.

Sick Leave to Care for a Child, Parent or Spouse (AB 109)

Effective January 1, 2000, all employers who provide sick leave to their employees (regardless of the size of the employer) must permit an employee to use one-half of the employee's accrued sick leave in each calendar year to attend to the illness of a child, parent, or spouse of the employee. AB 109 prohibits an employer from denying the use of sick leave or from discriminating against an employee in any way for using, or attempting to use, sick leave to attend to an illness of a child, parent, or spouse of the employee.

Although AB 109 governs the use of sick leave, it does not require that an employer offer sick leave benefits to its employees, nor does it require an employer to offer more sick leave than the employer currently provides.

If an employer is found to have violated the new sick leave law, an aggrieved employee may be entitled to reinstatement (if applicable), damages, and other relief ordered by a court, including reasonable attorneys' fees.

Use of Salary Factor May Result in Age Discrimination (SB 26)

In a 1997 decision (Marks v. Loral Corporation), a California appellate court declared that a layoff decision based upon salary is not age discrimination, even if it results in the retention of only younger employees. The enactment of SB 26 rejects this appellate court decision and states that the use of salary as the basis for differentiating between employees when terminating employment may be found to constitute age discrimination if it disproportionately affects older workers (workers over the age of 40).

SB 26 clearly sets forth its intent to protect older workers from prohibited discrimination to the same extent as prohibitions against race and sex discrimination. SB 26 states, "The Legislature further reaffirms and declares its intent that the courts interpret the state's statutes prohibiting age discrimination in employment broadly and vigorously, in a manner comparable to prohibitions against sex and race discrimination, and with the goal of not only protecting older workers as individuals, but also of protecting older workers as a group, since they face unique obstacles in the later phases of their careers."

SB 26 does not in any way limit the defenses traditionally available to employers in employment discrimination cases, including "business necessity." However, because of the implications of relying on "business necessity" when making employment decisions affecting employees over the age of 40, employers should discuss the issues with labor counsel before doing so.

Jodi L. Karpel is an attorney with Swerdlow Florence Sanchez & Rathbun, A Law Corporation, in Beverly Hills, California.

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