Governor Calls for California Wage and Hour Changes
By Marie D. DiSante
In response to the current crisis in our nation's financial markets, last week California Governor Arnold Schwarzenegger called for a special session of the Legislature to pass a plan to invigorate California's economy. Governor Schwarzenegger has prescribed an action plan of targeted proposals that are designed to generate and retain jobs in California. The workplace reforms designed to assist California employers consist of the following:
Overtime Exemptions: Governor Schwarzenegger is proposing to classify as exempt from overtime pay all executive, sales, administrative, and professional employees who earn over $100,000 annually. Such legislation is long overdue. It would have the very significant effect of reducing the litigation costs associated with lawsuits alleging that employers failed to pay overtime compensation to highly paid employees. Governor Schwarzenegger's offices estimates this will save California employers $90 million per year in employee classification costs (which includes the cost of paying overtime to highly compensated employees and the cost of misclassification lawsuits).
More Flexible Work Schedules: Governor Schwarzenegger is proposing to allow employees to work more flexible hours upon request, such four ten-hour work days in a 40-hour work week, without being paid overtime. Such legislation would put California in line with nearly every other state in the nation. Governor Schwarzenegger's office predicts that such legislation would reduce absenteeism, boost productivity, raise employee retention rates, and reduce claims on the Unemployment Insurance trust fund. It also would provide employees with the flexibility they need to balance family needs with work obligations, and it would help employees significantly reduce the amount of time and money (not to mention fossil fuels) spent in traveling to work. Again, such legislation is long overdue.
Clarification to Meal and Rest Break Rules: Governor Schwarzenegger also is proposing that the Legislature clarify existing law regarding meal and rest periods to provide employers and employees with a clear understanding of the break rules and by offering flexibility to both businesses and workers. Governor Schwarzenegger's office predicts this will save hundreds of millions of dollars in litigation costs, and it will lead to fewer employment terminations over meal break violations and a more welcoming work environment. On behalf of all employers who have faced the overwhelming costs of meal and rest break litigation, and all employees who have genuinely desired to forego a meal break in lieu of going home 30-60 minutes earlier or earning more money from tips or commissions, I offer a resounding endorsement.
Governor Schwarzenegger's proposals are sound ways to advance the interests of both employers and employees alike. We only can hope the California Legislature sees it the same way. I urge you to contact the legislators in the districts in which you do business to offer support for Governor Schwarzenegger's proposals. It would go a long way toward putting California on a more level playing field with the rest of our great nation, and it would do so in a way that would benefit workers and employers alike.