IR # 97-33
Monday, June 30, 1997

Rick Rice
Troy Swauger
(415) 972-8835

Flexible Work Week Rules Upheld by Court

SAN FRANCISCO -- A ruling issued today by San Francisco Superior Court upholds the authority of the Industrial Welfare Commission (IWC) to amend state overtime provisions and protect the general welfare of California workers. The decision was hailed by John Duncan, Acting Director of the California Department of Industrial Relations, as an affirmation of the IWC's effort on behalf of California workers and employers to permit more flexibility in the work place and conform California's overtime requirements with those of federal law.

"We are quite pleased by today's ruling and satisfied that the court has both affirmed the authority of the IWC and provided California workers with a solid win," Duncan said. "The overtime rules held intact by this decision will enable Californians to enjoy what the federal government and 47 other states already have -- flexible work weeks."

A study on the effect of the new overtime regulations, conducted by the Hoover Institution at Stanford University, shows that it is likely to result in an additional $500 million in annual earned income for Californians and provide increased scheduling flexibility for California workers and their employers.

The decision by Judge Cahill rejects arguments mounted by organized labor groups to derail amendments in the state's overtime rules. Critics had incorrectly claimed that the IWC did not have the authority to amend overtime rules contained in the IWC orders.

"The California Constitution is quite clear about the authority of the Industrial Welfare Commission," Duncan said. "The Legislature may enact laws prescribing hours of work, but it may also delegate that authority to the IWC, which it clearly did."

The new state rules, which require payment of overtime after 40 hours in a work week, are scheduled to go into effect on January 1, 1998.

The new overtime rules cover five occupational and industry groups, including the manufacturing industry; mechanical, clerical, technical and professional occupations; hotels, restaurants, and hospitals (public housekeeping); retail, wholesale and sales (mercantile); and the transportation industry.

Workers employed in the above industries or occupations who are covered by collective bargaining agreements are not affected by the change in the wage orders since these agreements supersede state regulations. Also there will be no change in private sector exempt employees, such as doctors, lawyers, other professionals and executives. In addition, federal employees, state and local government employees and those employed by the state Legislature remain unaffected by the IWC's action.

Today's court decision is the second rejection of legal challenges by organized labor, which first attempted to invalidate the appointment of one of the labor representatives on the commission. That challenge was turned back earlier this month when the court ruled against the Professional Engineers in California Government and upheld the appointment.