A new measure introduced in the California Legislature would change the definition of a workweek in state Labor Code for employers with 500 or more workers to 32 hours from the current 40 hour work week.
The bill, AB 2932, would require overtime pay of at least time and a half for any employees who work more than four eight-hour days during the week. Under the legislation, a shorter workweek would not be accompanied by a corresponding salary cut and employers would be required to maintain their original set wages, despite decreasing working hours.
The California Chamber of Commerce and other business groups have come out strongly opposed to the measure, saying it’s a “job killer” that would hurt business and result in substantial overtime being paid out. They also say the bill would increase labor costs, expose employers to litigation, and impose requirements that are “impossible to comply with.”
“Labor costs are often one of the highest costs a business faces. Businesses often operate on thin profit margins and the number of employees you have does not dictate financial success,” the chamber wrote in a letter opposing the bill.
Other observers say the bill would put employers in the Golden State at a competitive disadvantage compared to their peers in other states. It would also significantly increase litigation, employment law experts say.
Proponents of the bill say that it would benefit employee health, increase productivity and reduce health insurance premiums. In a recent survey conducted by experience management company Qualtrics, 90% of workers polled said they supported the idea of working just four days a week.
About 75% said they could do the same amount of work in the shorter time frame, while 48% said it would require them to work longer hours. Notably, 47% said the change would hurt sales, with management the most concerned about potential negative effects.
The employees of businesses with fewer than 500 workers would continue to work eight hours a day for five days a week to be considered full time. However over time this would make it even more difficult for small businesses to recruit and retain employees.
An analysis of the legislation, citing the state Employment Development Department, says the bill, if it becomes law, would affect some 2,600 business and 3.6 million employees in California.
AB 2932 is currently awaiting hearing in the Assembly Labor and Employment Committee.
For more information supporting small businesses in California, contact Shannon Wolford, VMA’s membership director at firstname.lastname@example.org.