A Shake-Up in Labor Law : Wilson’s Post-Quake Order Stirs Concern for 8-Hour Days

For Helen Lima, at least one good thing came out of the Northridge earthquake: a “flexible” work schedule. Lima, a clerical worker at Valley Presbyterian Hospital in Van Nuys, swapped a conventional Monday-through-Friday routine for a new schedule giving her four 10-hour workdays and three days off every week.

But as more employees are granted similar schedules--sometimes working 35 to 40 hours spread over three or four long days--questions are being raised. Is it a sign of enlightened management responding to the preferences of stressed-out workers? Or is it a back-door assault on the eight-hour working day, a historic protection that the U.S. labor movement struggled to win?

A controversy has been brewing in California over the issue after an order by Gov. Pete Wilson aimed at helping workers and employers whose lives or operations were complicated by the Northridge quake.

The order temporarily frees Southland firms from the state’s requirement to pay most employees, including part-timers, overtime wages whenever they work more than eight hours in a single day. Wilson’s intent was to allow employers to offer alternative work schedules, thus easing rush-hour congestion on the freeways while construction crews make road repairs.

Supporters also regard the waiver as a challenge to anachronistic workplace rules that have damaged California’s economy by making it a tough place to operate a business. But in a state that began passing laws to curb overtime work abuses as far back as 1911, labor leaders aren’t willing to yield ground on the eight-hour day.

“It remains an emotional issue for anyone with a sense of labor history,” said Floyd Tucker, a spokesman for the California Labor Federation. “A lot of people got their heads busted for this.”

For an example of how the daily overtime law has worked, consider someone working 10 hours a day, four days a week. Unless the employer met certain strict requirements, the worker was entitled to eight hours of overtime pay for the week.

Not so under the governor’s new order. Unless workers are covered by union contracts providing better terms, they aren’t owed overtime until they work more than 40 hours for the week.

Some union officials fear a hidden agenda behind the Wilson order, sensing an effort to give employers the labor law changes they have sought, unsuccessfully, for years through their lobbyists in Sacramento.

“You don’t have to kill the eight-hour day to stagger working hours,” Tucker said. “There are all sorts of alternatives employers can use without whacking down the eight-hour day.”

In fact, due to union pressure, Wilson is considering revising the order, possibly by shrinking the five-county territory where it applies.

Perhaps most affected by Wilson’s order are part-timers and other employees who work less than 40 hours a week but who often put in long shifts. Many grumble privately that the governor’s order--and their opportunistic employers--are taking money out of their paychecks.

On the other hand, plenty of workers have never been covered by the daily overtime rule, including salaried professionals and managers and workers whose employers flouted the rules all along.

Some employers don’t even know about the Wilson order, and others have decided against using it for fear of antagonizing their workers.

David G. Gossman, a consultant for the Employers Group, a statewide lobbying and consulting organization serving 4,500 firms, said he has received hundreds of phone calls about the issue. Yet Gossman said that most employers he spoke to were not going to do anything because their employees’ commuting problems were not severe enough to justify schedule changes.

In addition, he said, “just because it’s OK to do something temporarily, how are you going to explain it to your employees? It might be a little awkward to explain why you are shutting it (overtime pay) off.”

But supporters of the governor’s order say the traditional eight-hour-day rules have put California employers at a disadvantage. They note that only about five states have such requirements; most states, and the federal government, require overtime to be paid only if a worker puts in more than 40 hours per week, just as Wilson’s order now allows in Southern California.

Consider the story of Hinderliter Heat Treating, a metals-processing firm with plants in Tarzana and Anaheim, as well as Texas, Oklahoma and Tennessee. Outside of California, the company has found it could operate most efficiently by keeping its plants running all day, every day, and by putting workers on schedules of 12 hours a day, three days a week.

In California, however, the cost of paying time-and-a-half overtime wages for the 12-hour work days has been prohibitive.

“We’re a small company, and every penny counts,” said Paul M. Schmidt, a vice president at Hinderliter’s headquarters in Dallas.

The result: The company has thought about moving its California operations to Nevada or Utah. With the governor’s temporary order in effect, however, Hinderliter is experimenting with new work schedules in California resembling those it uses elsewhere.

The initial reaction is generally upbeat, the company says, although some workers resent getting less overtime pay.

“Working a couple extra hours a day and then getting an additional day-and-one-half off a week is a pretty good trade-off,” said Philip P. Stella, Hinderliter’s district manager for Southern California.

Other supporters of the governor’s order say it allows employers to provide flexible schedules for workers who want them. At Valley Presbyterian Hospital, employees now on flexible schedules “are very grateful that the hospital is willing to let them do this,” said Katie Wargnier, the hospital’s manager of human resources.

“They see this as one more way that we’ve been trying to help them” deal with the consequences of the earthquake, she added.

The Overtime Pay Suspension

To encourage employers to offer flexible work schedules in the wake of the Northridge earthquake, Gov. Pete Wilson issued an order in January suspending the state’s daily overtime pay requirement.

What the order does: When workers put in more than eight hours in a single day, but not more than 40 hours during the week, they no longer are entitled to overtime. Previously, hourly and other “non-exempt” workers putting in more than eight hours in a single day were owed overtime pay, even if they were part-time employees. There were exceptions to the rule before, but only in certain industries and only if two-thirds of the affected workers approved.

Who it affects: The order currently applies to Los Angeles, Orange, Ventura, San Bernardino and Riverside counties. Due to opposition from unions, Wilson is considering narrowing the order. The order is supposed to expire when “all Los Angeles and Ventura County freeways damaged by the earthquake are open to normal traffic” free from rebuilding-related delays. The order does not apply to government employees nor union workers whose collective bargaining agreements cover their overtime pay rates.