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California Legislation Pushes for Four-Day Work Week

An Assembly bill would reduce the definition of a work week down to 32 hours for companies with more than 500 employees and would require companies to pay overtime for time worked past four full days.

cartoon of a man in a suit putting "x" on three days of the week on a calendar
(TNS) — As the pandemic and telework upend where millions of Californians do their jobs, state lawmakers are mulling whether to change when we work as well.

A bill moving through the state Legislature, AB2932, would change the definition of a workweek from the current 40 hours to 32 hours for companies with more than 500 employees, and require overtime pay for making employees work longer than four full days a week.

Larger companies also wouldn't be allowed to cut employee pay to compensate for a missing workday during the week, and unionized workforces would be exempt.

Boosters for the idea say it adapts working life to the transformation brought on by the pandemic and will have myriad benefits for employee health, increasing productivity and even lowering health care premiums. Opposition from business groups has focused on the negative economic effects and the potential for huge time-and-a-half-related cost overruns, as well as worsened sales and service.

"The moment we're in has allowed us to recalibrate how we're going to move forward," as worker shortages and increased demands for work-life balance potentially become more permanent features of professional life, said the bill's author, Assembly Member Cristina Garcia, D- Bell Gardens ( Los Angeles County).

Garcia also pointed to the scores of women across the state and the country who have left the workforce, some to stay home with children, and said the change could make it easier for them to re-enter the labor force. She said the goal was not to "Shove the same amount of work into less time," but in part to formalize some of the changes brought on by the pandemic.

Garcia said she is talking to the California Labor Federation, and other unions groups as well about supporting the bill. She said the carve out for companies with unionized workforce was because "Collective bargaining often results in better employee benefits than the floor that we're setting with this bill."

Assembly Member Evan Low, D- San Jose, also an author, could not be reached for comment.

There is also a bill at the federal level pushing for similar changes by Rep. Mark Takano, D- Riverside.

Todd Scherwin, an attorney with labor law firm Fisher & Phillips LLP, said the bill, if passed, could make companies even more desperate to hire people, while Garcia characterized it as a measure to partly ease the effects of labor shortages.

Scherwin said there were also outstanding questions about how salaried employees would be affected, and if the bill would only apply to companies with 500 employees in California or anywhere. Garcia said the intention would be for the bill to cut working times for salaried employees from 40 to 32 hours per week. She is open to discussions about if the 500 employees threshold should apply only to companies with those employees in the state.

Business groups are already pushing hard against the idea, and some experts say it will have negative secondary effects.

The California Chamber of Commerce recently added the bill to its "Job Killer" list of measures it opposes, saying in a letter to the authors the bill would stunt job growth when the state is still recovering from the economic impacts of the pandemic, and result in "a minimum 10 percent increase in wages per employee per week."

"This is terrifying," said Nicholas Bloom, a Stanford University professor who studies remote work and related trends, in an email. "If they introduce this businesses will reduce employment through hiring freezes and layoffs and slash pay by canceling the next (five) years of pay increases.

"Business can't possibly be competitive in California by having workers only work (four) days. Firms will just move across the border to Oregon or Nevada."

"This is not a good idea," said John Sullivan, a management expert and professor emeritus at San Francisco State university. Sullivan said the move would crater innovation and cause California to lose its competitive edge, and would not produce the desired healthy effects, comparing it to the supposed benefits of remote working.

"We assumed remote work would increase work-life balance," Sullivan said. "It didn't, people worked more. Advocates are pushing an idea (that) they have no idea if it will work."

Garcia, the bill's author, said the strength of the state's economy and the strong attraction for companies to its innovation economy largely nullified concerns about companies leaving. "I think that's an argument that's overinflated," she said of the potential for some companies to flee the state. Yet, there has been a noticeable trend of California companies, including Oracle and Tesla, switching their headquarters to other states.

Garcia said she could not point to any data predicting how much the change would cost, but said it would ease labor shortages, "I would venture to say there's more loss in having an employee shortage than there is in changing to a four hour week."

Some tech businesses in the orbit of Low's Silicon Valley district had been experimenting with a shorter workweek before and during the pandemic, as remote work has taken hold for the long term and even become a recruiting tool for companies vying for top talent.

One San Francisco company, Monograph, has given employees Wednesdays off since its inception in 2019, according to an email from a press representative, which touted the reduced burnout, and higher morale and employee loyalty of a shorter workweek.

"I love it ... that was one of the reasons why I joined," said Monograph Senior Content Strategist Joann Lui. She said the entire company has Wednesdays off, which allow her and other to work on side businesses and hobbies and to rest in the middle of the week. But the strong recruiting pull of an extra day off could be undercut if the practice becomes widespread.

Lui said during especially busy periods it can, at times, be difficult to fit all her work into the four days and that she sometimes works later to compensate, and that the adjustment coming from a traditional full time schedule took some getting used to. "The biggest challenge is figuring out how to work productively without wasting time in the four days you have," Liu said.

Despite the bill's 500-employee cap, it would still affect a large number of companies and their employees. Statewide, there were more than 2,585 businesses with 500 or more employees in the second quarter of last year, according to the Employment Development Department,

That was equal to more than 3.6 million of the 16.9 million people representing the state's workforce.

The extra day off each week is heavily favored by employees. More than 900 of 1,000 full- time employees said they supported the idea in a recent survey by experience management company Qualtrics — with tech workers in particular saying they'd welcome the shift.

About three-quarters of those surveyed said they could do the same amount of work in the shorter time frame, while slightly less than that said it would require them to work longer hours. Almost half of the respondents said the change would hurt sales, with more senior company leaders the most concerned about potential negative effects.

The recruiting and retention benefits of a short week are "Nested within the bigger issue of workplace flexibility," said Benjamin Granger, an organizational psychologist whose team ran the survey.

Granger said other data points show that the work life changes that have happened over the last two years are real and lasting. If there ever was a time to strike while the iron is hot, now is the time."

Part of the reason Granger's team ran the survey is because of a dearth of data on the effects of a shortened week on employees and companies. But there are examples.

Bloom, the Stanford professor, pointed to the ongoing experiment of France's 35 hour week, which he characterized as "A bonanza for the British and Germans," as it forced some French firms out of the country. That law was designed to battle a high unemployment rate in the country more than two decades ago, while California's recovery from the pandemic's economic ravages has seen unemployment rates steadily drop.

For Garcia, the change to a four day workweek would be more about recognizing the power working people discovered they possessed during the pandemic.

"They've always had this power," she said. "This moment has reminded us it's time to use it.

The bill is moving through the Assembly Labor and Employment Committee.

(c)2022 the San Francisco Chronicle. Distributed by Tribune Content Agency, LLC.
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