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A bill proposed by the state Legislature could make California the first state in the nation to cut its work week to four days for a large portion of workers.
The bill, AB 2932, would change the definition of a 40-hour work week to 32 hours for businesses with more than 500 employees. A full working day would remain at eight hours and employers would be required to pay overtime for employees working more than four full days.
The bill was drafted by Assembly Members Cristina Garcia (D-Bell Gardens) and Evan Low (D-San Jose). At the federal level, a bill by Rep. Mark Takano (D-Riverside) is pushing for similar changes under the Fair Labor Standards Act.
Reached by phone Friday, Garcia said the idea was partly prompted by the exodus of employees during the COVID-19 pandemic, many of whom were seeking a better quality of life. More than 47 million Americans voluntarily left their jobs in 2021, according to the US Bureau of Labor Statistics.
“We’ve had a five-day work week since the industrial revolution,” Garcia said, “but we’ve made a lot of progress in society, and we’ve had a lot of advancements. I think the pandemic right now allows us the opportunity to rethink things, to reimagine things.”
Garcia and other proponents say a four-day workweek would lead to increased productivity and profits, and point to case studies already underway in Iceland and companies such as Kickstarter. (The Times editorial board in September argued that the concept was worth trying.)
Opponents say a four-day workweek would stunt job growth in the state and could create untenable conditions for employers. The California Chamber of Commerce included the bill on its “job killer” list, writing that it would dramatically increase labor costs, expose employers to litigation and impose “impossible” requirements. to respect”.
Here’s what you need to know about this potentially monumental change:
Who would be covered by AB 2932?
The bill as written would apply to California employers with at least 500 employees. According to the state’s employment development department, that’s about 2,600 businesses and more than 3.6 million employees.
Unionized workers, or those with collective agreements, are exempt, Garcia said.
How would that work?
The bill seeks to amend Section 510 of the California Labor Code by redefining the 40-hour workweek to 32, with eight-hour workdays remaining in place.
Under the bill, employees who work more than 32 hours would be paid at a rate of at least 1.5 times their normal rate of pay, as is currently the case for those who work more than 40 hours.
Basically, the bill would also prohibit employers from reducing an employee’s normal rate of pay because of the reduced work week requirement.
Garcia said conversations are ongoing about how the rules will work for salaried employees. She said the bill doesn’t apply to workers with collective agreements because “I like to think of it as a floor, and often our collective agreements are better.”
But, she added, “we have to start the discussion somewhere.”
What are the potential benefits?
Iceland conducted two large-scale trials of the concept between 2015 and 2019, in which around 1% of the national workforce reduced their working week to 35 or 36 hours without a pay cut.
The country found that productivity and service remained the same in the majority of workplaces tested, and worker well-being increased significantly across a range of indicators, including perceived stress and burnout, and health and work-life balance.
As a result of the trials, at least 86% of the country’s workforce are now working fewer hours or gaining the right to reduce their hours.
“The thing is, a lot of other companies are already doing it, and other countries are, too, so I think that’s the direction we’re going,” said Low, co-author of the bill, noting that many many companies that have tried similar strategies have also reported better customer engagement and lower utility costs.
“It will attract more [employees] to your company, because it is undeniable that workers are looking for more flexibility,” he said.
What are the potential downsides?
Ashley Hoffman, policy advocate at the California Chamber of Commerce, said the additional labor costs imposed by the bill would amount to a minimum 10% increase in wages per employee per week, among other things. concerns.
“This significant increase in labor costs will not be sustainable for many businesses,” she wrote in opposition to the bill, noting that labor costs are often one of the highest costs a business faces and that many businesses operate with very low profit margins.
“Such a large increase in labor costs will reduce the ability of businesses to hire or create new positions and therefore limit job growth in California,” Hoffman said. “This is especially true now that businesses are still recovering from the impacts of COVID-19 and the resulting increased supply chain costs.”
Hoffman also said the bill could have the unintended consequence of reduced hours for workers.
What happens next?
AB 2932 is currently with the Labor and Employment Committee for review.
“We now have the opportunity for businesses, unions and workers to have an honest and frank conversation about what this looks like, and then we will make changes accordingly,” Low said, adding that the bill was a “work in progress”.
A hearing date has not yet been set, he said.
This story originally appeared in the Los Angeles Times.
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