Under The New California Overtime Rules
Effective January 1, 1998
We’ve summarized some answers to questions people have on the new overtime rules below. The changes do not apply to everyone, but if your workplace is eligible for flexible work hours under the new rules, this is information you’ll want to know.
1. Which employers and employees are affected by the changes to overtime rules made by the Industrial Welfare Commission?
The new rules will apply to 5 of the 15 Industrial Welfare Commission Orders. These are:
No other industries or occupations are affected by the IWC changes.
2. When will the new rules go into effect?
The new overtime rules will become effective on January 1, 1998 for the five Wage Orders listed above.
3. Does this rule change the way overtime pay is calculated?
Yes, the major change requires overtime to be paid for all time worked in excess of 40 hours in a single workweek instead of the current daily overtime after 8 hours in a single day.
4. Is there any effect on employees under a collective bargaining agreement?
There is no effect on collective bargaining agreements. The IWC Orders provide an exemption for overtime purposes for employees covered by a collective bargaining agreement if the agreement provides for premium rates for overtime work and the cash rate is at least $1 more per hour than the minimum wage. This exemption is still provided in the newly adopted orders. (See Section 3 of the orders.)
5. Do the new rules apply to overtime payments on public works construction?
No, the IWC rulings do not affect the wages paid, including overtime, on state and local government funded construction.
6. What happens to double time under Wage Orders 1, 4, 5, 7, & 9?
Section 3(A) of the Orders which established the requirement for time and one-half after 8 hours in a day and double time has been deleted. As a result, no double time is required for any overtime worked. This now parallels federal law in these Orders.
7. Is there an effect on the “seventh day of work?”
The provision for overtime for work on the seventh consecutive day has been deleted. Therefore, overtime under Orders 1, 4, 5, 7, & 9 begins after the 40th hour worked in a single workweek.
8. May employees arrange with their employers to make up lost hours or days during their (40 hour) workweek and avoid losing pay?
Yes, under the new rules in affected orders and at the discretion of the employer, employees can “make up” hours lost by working additional hours on another day during that workweek. Previously, most employee requests for “make-up time” for lost hours were denied because employers have been mandated to pay time and one-half for the hours that employees worked over eight hours in a single day. The new rule will remove this deterrence to allowing “make-up time.”
9. What should an employee do if the employee wants his or her employer to allow an alternate work schedule?
The new rules take effect on January 1, 1998. Employees should discuss possible scheduling changes with their supervisors or employers in the coming months. The new rules will allow individuals to work with their employers to determine their own individual work schedules. For example, employees and employers may now more easily schedule four 10-hour work days with three days off, or a variety of creative scheduling plans.
10. If the new rule takes effect January 1, 1998, does that mean December 1997 payrolls can be based on the new regulations?
No, the new rules become effective January 1, 1998 and only affect hours worked from that date forward. Hours worked prior to January 1, 1998 are subject to provisions in effect in 1997.
11. Please clarify the provision that permits voluntarily waiving a meal period? Does this mean all meal periods or only the second meal period during a single day?
The changes adopted by the IWC allow employees who work shifts in excess of eight hours in one day to waive their right to a second meal period. The waiver of this second meal period allows an employee freedom to choose between leaving work one-half hour earlier or taking a second meal period on a long shift. The waiver must be in writing and must be voluntarily signed by both the employee and employer.
It was the intent of the IWC to allow for employees to decide whether or not they want to waive the required second meal period required after working 10 or more hours in a single day.
12. How do the changes impact the health care employees covered by Wage Orders 4 and 5, which permit 80 hours of work in a 14 day period?
The provisions of IWC Order 5, which allow a 14-day work period of 80 hours, are not affected by the action taken by the IWC. See Section 3 (B). These provisions do not exist in Order 4.
13. Under Wage Order 1, does implementing a flexible schedule require that 40 hours of work be available?
No. The five wage orders affected, including Wage Order 1, require overtime to be paid to an employee after 40 hours worked in a week. None of the Industrial Welfare Commission Wage Orders mandate that 40 hours of work be available.
14. Is there any limitation on when employers can call someone back to work?
Generally speaking, most employees can be called back to work at any time pursuant to an employer’s directions. However, there are some regulations and statutes contained in the orders and the Labor Code that restrict the number of hours that an employee can work in a workday and workweek. For example, Labor Code Section 551 requires a day of rest in seven. There are also specific provisions limiting the number of hours allowed for certain occupations such as pharmacists, train dispatchers, train operators, etc.
15. Are there any required rest times between work shifts -- i.e. an employee works from 7:00 a. m. to 7:00 p.m. -- how soon can this employee be called back?
There is no limit on when an employee can or cannot be called back to work. Employers are cautioned, however, to keep in mind safety concerns for employees to avoid injuries due to fatigue.
16. How many hours can an employer schedule an employee to work?
While there are no daily limits, caution should be the rule. Employers should be careful and consider employee fatigue, employee commutes and employee morale when implementing any alternate work schedules. Employers are urged to consider employee needs, such as child care or elder care, before implementing any changes.
17. Will the Labor Code Section dealing with one day of rest in seven be enforced?
Yes, the action taken by the IWC regarding daily overtime has no impact on the Labor Code provisions which require a day of rest in seven, except under specific circumstances. (See Labor Code Section 554 for exceptions.)
18. Under Wage Order 5 and 9, what hours does an employer have to count as time worked if an employee does not receive eight hours of uninterrupted sleep time? Is it all the sleep time or only the hours that were actually worked?
The definition of hours worked under Order 5 is different than in Order 9. Under Order 5-98, “hours worked” means the time during which an employee is subjected to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so, and in the case of an employee who is required to reside on the employment premises, that time spent carrying out assigned duties. Within the health care industries, the term “hours worked” means the time during which an employee is suffered or permitted to work for the employer, whether or not required to do so, as interpreted by the provisions of the Fair Labor Standards Act. The provisions in IWC Orders 5-98 and 9-98 dealing with ambulance drivers and attendants allow such employees who are scheduled for 24 hour shifts to agree, in writing, “to exclude from daily time worked not more than three meal periods of not more than one hour each and a regularly scheduled uninterrupted sleep period of not more than eight hours.” It’s important to note, the sleep period must be “regularly scheduled,” if not, it must count as hours worked. Any agreement to exclude such time must be in writing. The orders also provide a maximum of eight hours, for the total number of uninterrupted sleep, which may be excluded from the daily hours worked. (i.e. , if the employee gets ten hours of uninterrupted sleep, only eight may be excluded from hours worked.)
Under Order 9-98, the term “hours worked” means the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so. Individuals employed as ambulance drivers and attendants who are scheduled for 24-hour shifts may agree to exclude from daily time worked three meal periods of not more than one hour and a period of not more than eight hours of uninterrupted sleep. If the employee does not receive eight hours of uninterrupted sleep, all the time must be counted as time worked and paid at the appropriate rate.
19. Do employers have to pay overtime to an employee who missed two days in one week due to illness, then worked three 10-hour days the rest of the week?
No, the overtime rule applies to “hours worked.” In such a case, hours worked during that week would only total 30, even though the employee would be paid for the two sick days. (Assuming that the employer has a paid sick leave program.)
20. What else does an employer need to do before January?
Employers are encouraged to discuss any possible changes with their employees to address employee concerns and allow time to address any issues, such as child care, that need attention before implementing any change in scheduling. Additionally, employers need to review and revise appropriate employee manuals, policy & procedures manuals, overtime rules, and stand-by policies prior to the new rule change on January 1, 1998.
21. Do current alternate workweeks need to be formally dissolved by the employer and a flexible schedule implemented, or will the alternate workweeks automatically be dissolved?
Any employer who wishes to terminate such an agreement must provide the employee with written notice of termination; provided, of course, that the agreement itself does not contain any express language to the contrary, somehow restricting the employer’s right to terminate the agreement. The employer’s obligations, upon terminating such an agreement, are established by the IWC overtime provisions then in effect.
22. Do employers still have to file flexible or alternate schedules with the DLSE?
There is no requirement under the provisions of the newly adopted Wage Orders to file alternate workweek schedules with the DLSE.
23. Where can I get copies of the regulations that become effective on January 1, 1998?
24. What if I have specific questions? Who can answer them?
If, after reading the applicable wage order, you still have questions, we will try to help you. You may contact the Division of Labor Standards Enforcement (DLSE) public information number nearest you for further information. The telephone numbers for DLSE are:
You may also e-mail us with specific questions at email@example.com and a representative of DLSE will respond. (Again, please provide your telephone number so we may contact you in case more information is needed.)