Four Days, Ten Hours: The California AWS Playbook
Alternative Workweek Schedules in California
Under California law, nonexempt employees generally earn daily overtime when they work more than eight hours in a workday. An Alternative Workweek Schedule (“AWS”) allows certain employers and employees to adopt regularly scheduled workdays longer than eight hours without triggering daily overtime for those scheduled hours, provided the arrangement complies with California law and the applicable Industrial Welfare Commission (“IWC”) Wage Order.
An AWS can offer significant scheduling flexibility. Some employers use alternative schedules to accommodate operational demands, industry practices, or health and safety considerations. Others implement them to provide employees with compressed workweeks, such as four 10-hour workdays instead of five eight-hour days.
An employer, however, cannot simply announce that employees will begin working an alternative schedule. California imposes detailed procedural requirements for establishing a valid AWS. Failure to follow those requirements can invalidate the schedule and potentially expose the employer to liability for unpaid overtime.
Is an Alternative Workweek Schedule Right for Your Workplace?
Before beginning the AWS process, an employer should determine whether a fixed alternative schedule is compatible with its operational needs.
An AWS generally requires a regularly recurring schedule. Employers that routinely need to change employees’ starting times, ending times, or scheduled workdays may find an AWS difficult to administer.
Depending on the circumstances and applicable Wage Order, regularly recurring schedules may include rotational or seasonal arrangements. The key consideration is whether the proposed schedule satisfies the requirements governing the particular employees and industry.
Employers should therefore evaluate both the benefits and limitations of an AWS before beginning the election process.
Does Your Business Qualify for an AWS?
Not every California workplace can use the same alternative workweek procedures.
An employer should first identify the IWC Wage Order governing the affected employees. Alternative workweek provisions generally appear in Wage Orders 1 through 13, 16, and 17.
Even when an applicable Wage Order permits an AWS, the permissible schedules and procedural requirements may differ. Employers should carefully review the applicable Wage Order and Labor Code provisions before proposing a schedule.
Establishing the Appropriate Work Unit
Before conducting an AWS election, the employer must identify the employees who will comprise the affected work unit.
California Labor Code section 511 recognizes several types of work units, which may include:
A division;
A department;
A job classification;
A shift;
A separate physical location; or
A recognized subdivision of one of these groups.
Under appropriate circumstances, a work unit may consist of a single employee if the employee satisfies the requirements of an identifiable work unit.
Correctly defining the work unit is important because the employees within that unit will determine whether the proposed alternative schedule is approved.
How Is an Alternative Workweek Schedule Adopted?
California requires an employee election before an AWS can generally take effect. The process involves several important steps.
1. Develop the Proposed Schedule
The employer must first develop a written proposal identifying the proposed alternative workweek schedule.
Depending on the applicable Wage Order, the proposal may consist of a single schedule or, where permitted, a menu of schedule options from which employees may select.
The proposal should clearly identify the number of workdays and the number of hours employees will be scheduled to work.
2. Provide Written Disclosure
Employees in the affected work unit must receive information explaining the proposed schedule and its effects.
The disclosure process is intended to give employees sufficient information to make an informed decision before voting.
3. Conduct a Pre-Election Meeting
The employer generally must hold a meeting with affected employees at least 14 days before the election.
During the meeting, the employer must discuss the proposed AWS and explain its effects on employees’ wages, hours, and benefits.
Employers must also comply with applicable requirements for providing disclosures to employees who cannot attend the meeting and for communicating with employees who may require information in a language other than English.
4. Conduct a Secret-Ballot Election
After the required pre-election period, the employer may conduct the AWS election.
The election must be conducted by secret ballot during regular working hours at the employees’ worksite. The employer is responsible for the costs associated with conducting the election.
For the AWS to be adopted, at least two-thirds of the affected employees in the work unit must vote in favor of the proposal.
The two-thirds requirement is particularly important: approval is based on the affected employees in the work unit, not merely two-thirds of the employees who happen to cast ballots.
5. Report the Election Results
If the required two-thirds vote is obtained, the employer must report the election results to the California Division of Labor Statistics and Research within the required statutory timeframe, generally within 30 days after the election results are final.
Employers should ensure that the required information is accurately reported and preserve documentation confirming the submission.
6. Implement the New Schedule
Approval of an AWS does not necessarily mean the employer can immediately place employees on the new schedule.
The employer must provide affected employees with appropriate notice of the schedule change and comply with the applicable implementation requirements.
Employers should establish a clear effective date and give employees sufficient time to transition to the new schedule as required by California law.
What Records Should Employers Maintain?
Employers implementing an AWS should maintain comprehensive documentation demonstrating that the schedule was lawfully adopted.
Relevant records may include:
The written AWS proposal;
Notices provided to affected employees;
Copies of required disclosures;
Documentation concerning the pre-election meeting;
Records showing when and where the meeting occurred;
Communications provided to employees who did not attend;
Secret-ballot election materials;
Election results;
Documentation establishing the affected work unit;
Records of the employer’s submission of election results;
Notices concerning implementation of the schedule; and
Subsequent communications concerning modifications or repeal of the AWS.
Maintaining complete records is particularly important if the validity of the alternative workweek schedule is later challenged.
An AWS Does Not Eliminate All Overtime
One of the most important misconceptions about alternative workweek schedules is that employees working under an AWS are no longer entitled to overtime.
That is incorrect.
A valid AWS modifies the circumstances under which daily overtime becomes payable; it does not eliminate California overtime protections.
For example, depending on the applicable schedule and Wage Order, overtime may still be required when an employee:
Works more hours than authorized under the alternative schedule;
Works beyond applicable daily limits;
Works more than 40 hours during the workweek;
Works on days outside the regularly scheduled AWS; or
Works hours that qualify for double-time compensation.
Employers should therefore configure their timekeeping and payroll systems specifically for employees working under an AWS rather than simply disabling daily overtime calculations.
Meal and Rest Periods Still Apply
An alternative workweek schedule does not eliminate California’s meal and rest period requirements.
Employees working longer shifts under an AWS remain entitled to applicable meal periods and paid rest periods.
This is especially important with 10-hour and longer shifts because the extended workday may affect the number and timing of required breaks.
Employers should consider meal and rest period scheduling when designing an AWS rather than addressing break compliance only after the alternative schedule has been implemented.
Changes to an Existing AWS
Employers should also exercise caution before informally changing an approved alternative workweek schedule.
Because an AWS is based on a specific schedule approved through a regulated election process, substantial deviations from that schedule may create overtime and compliance issues.
Likewise, California law provides procedures through which employees may seek to repeal an existing AWS. Employers should review the applicable Wage Order and Labor Code requirements before modifying or discontinuing an approved schedule.
The Bottom Line
Alternative workweek schedules can provide California employers and employees with valuable scheduling flexibility, including the possibility of compressed workweeks with longer workdays and fewer scheduled days.
The benefits, however, come with significant compliance requirements.
A valid AWS requires more than employee agreement or an informal scheduling policy. Employers must identify the appropriate work unit, determine the applicable Wage Order, properly disclose the proposal, conduct the required pre-election process, obtain approval through a secret-ballot election, report the results, and properly implement and document the schedule.
Employers must also remember that an AWS does not eliminate overtime, meal periods, rest breaks, or other California wage-and-hour protections.
Because an improperly implemented AWS can result in substantial overtime exposure, employers considering an alternative workweek should carefully review the proposed schedule and election procedures before implementation.
Legal Guidance for California Employers
Havey Law Offices LLC can assist California employers with evaluating, establishing, and maintaining compliant alternative workweek schedules. Legal review before conducting an AWS election can help identify issues involving the applicable Wage Order, work-unit definition, election procedures, overtime obligations, and implementation requirements.
About Heath A. Havey
Heath has been advising companies in California, Nevada, Japan, and U.S. employment laws since 1998.
Havey Law Offices LLC provides experienced legal guidance on California employment law and workplace compliance. Contact us today to discuss your company’s legal obligations, address potential compliance concerns, and develop practical strategies to reduce risk and maintain compliance with California employment laws.
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