NOTE: The Internet version of this Industrial Welfare Commission Order may be posted as is required at places of employment. To obtain the official printed Order, you may call 415.703.5070 and it will be mailed to you free of charge. You may also request copies by writing to the Department of Industrial Relations, Public Information Office, P.O. Box 420603, San Francisco, CA 94142-0603.

ORDER NO. 5-2001

Effective August 21, 1993 as amended)


To employers and representatives of persons in occupations covered by IWC Order No. 5-89 who work in the health care industry:

The Industrial Welfare Commission (IWC) Of the State of California proceeded according its authority in the Labor Code and the Constitution of California, and concluded that Sections 2, 3, and 11 of its Order 5-89, regulating the Public Housekeeping Industry, should be amended to affect persons who work in the health care industry. The IWC promulgated these amendments to Order 5-89, made pursuant to the special provisions of Labor Code Section 1182.7, on June 29, 1993. The amendments become effective on August 21, 1993. The amendments become effective on August 21, 1993.

All other provisions of Section 2, Definitions, Section 3, Hours and Days of Work, and Section 11, Meal Periods, and all other sections of Order 5-89 remain in full force and effect.

The amendments allow more flexibility with respect to work scheduling, managerial and administrative exemptions and the definition of hours worked for compensation. They apply only to persons covered by this order who work in the health care industry. This includes, but is not limited to, all employees who work for hospitals, skilled nursing facilities, intermediate care and residential care facilities, convalescent care institutions, and similar establishments.

The amendments printed in this mailer must be posted next to the calendar-style poster on which the entire Order 5-89 is printed, and which should already be posted where employees can read it.

The reasons for the changes accompany the amendments in the Statement as to the Basis, provided for you information. If you have any questions on interpreting the amendments or how they apply to you, please contact your nearest Division of Labor Standards Enforcement office, list below. If you need additional copies of this amendment, please write to:

Division of Labor Standards Enforcement,
P. O. Box 420603
San Francisco, CA 94142-0603

(The following language is added to Section 2, Definitions, subsection (H).)

(H)…Within the health care industry, 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 in accordance with the provisions of the Fair Labor Standards Act.

(The following language is added to Section 2, Definitions, subsection (L).)

(L)…Within the health care industry, the term "primarily" as used in Section 1, Applicability, means (1) more than one-half the employee’s work time as a rule of thumb or, (2) if the employee does not spend over 50 percent of the employee’s time performing exempt duties, where other pertinent factors support the conclusion that management, managerial, and /or administrative duties represent the employee’s primary duty. Some of these pertinent factors are the relative importance of the managerial duties as compared with other types of duties, the frequency with which the employee exercises discretionary powers, the employee’s relative freedom from supervision, and the relationship between the employee’s salary and the wages paid other employees for the kind of nonexempt work performed by the supervisor.


(The following language replaces subsection (C) in Section 3, Hours and Days of Work.)

(C) No employer engaged in the operation of a hospital or an establishment which is an institution primarily engaged in the care of the sick, the aged, or the mentally ill or defective who reside on the premises shall be deemed to have violated any provision of this Section if, pursuant to an agreement or understanding arrived at between the employer and employee before performance of the work, a work period of fourteen (14) consecutive days is accepted in lieu of the workweek of seven consecutive days for purpose of overtime computation and if, for any employment in excess of eight (8) hours in any workday and in excess of eighty (80) hours in such fourteen (14) day period, the employee receives compensation at a rate not less than one and one-half (1 ½) times the regular rate at which the employee is employed., provided:

(1) An employee who works beyond twelve (12) hours in a workday shall be compensated at double the employee’s regular rage of pay for all hours in excess of twelve (12);

(2) An employee who works in excess of forty (40) hours in a workweek shall be compensated at one and one-half (1 ½) times the employee’s regular rate of pay for all hours over forty (40) hours in a workweek;

The following language replaces subsection (K) in Section 3, Hours and Days of Work.)

K. Employees in the health care industry may work on any days any number of hours a day up to twelve (12) without overtime, as long as the employer and at least two-thirds (2/3) of the affected employees in a work nit agree to this flexible work arrangement, in writing, in a secret ballot election before the performance of work, provided:
(1) An employee who works beyond twelve (12) hours in a workday shall be compensated at double the employee’s regular rate of pay for all hours in excess of twelve (12);

(2) An employee who works in excess of forty (40) hours in a workweek shall be compensated at one and one-half (1 ½) times the employee’s regular rate of pay for all hours over forty (40) in the workweek;

(3) Prior to the secret ballot vote, any employer who proposes to institute a flexible work arrangement shall make a disclosure in writing to the affected employees, including the effects of the proposed arrangement on the employees’ wages, hours, and benefits. Such a disclosure shall include meeting(s), duly noticed, held at least fourteen (14) days prior to voting, for the specific purpose of discussing the effects of the flexible work arrangement. Failure to comply with this section shall make the election null and void;

(4) The same overtime standards shall apply to employees who are temporarily assigned to a work unit covered by this subsection;

(5) Any employer who institutes an arrangement pursuant to this subsection shall make a reasonable effort to find an alternative work assignment for any employee who participated in the secret ballot election and is unable or unwilling to comply with the agreement. An employer shall not be required to offer an alternative work assignment to an employee if an alternative assignment is not available or if the employee was hired after the adoption of the flexible work arrangement. There is no maximum number of employees whom an employer may voluntarily accommodate consistent with its desire and ability to do so;

(6) After a lapse of twelve (12) months and upon petition of a majority of the affected employees, a new secret ballot election shall be held and a two-thirds (2/3) vote of the affected employees shall be required to reverse the arrangement above. If the arrangement is revoked, the employer shall comply within sixty (60) days. Upon a proper showing by the employer of undue hardship, the Division may grant an extension of time for compliance;

7) For purposes of this subsection, affected employees may include all employees in a readily identifiable work unit, such as a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision of any such work unit. A work unit may consist of an individual employee as long as the criteria for an identifiable work unit in this subsection are met.
(The following is added to Section 3, Hours and Days of Work, as subsection (L).)

(L) When an employee in the health care industry requests in writing, and the employer concurs, the employee shall be permitted to make up work time lost as a result of personal obligations. The amount of make up time shall not exceed two (2) hours in any one workweek or, where applicable, four (4) hours in any one fourteen (14) day work period and must be made up during that workweek or work period, whichever is applicable. With the exception of the make up time authorized in this subsection, the appropriate overtime provisions in Section 3 shall apply to all other excess daily or weekly hours worked in the workweek or fourteen (14) day work period.


(The following is added to Section 11, Meal Periods, as subsection (C).)

(C) Notwithstanding any other provision of this order, employees in the health care industry who work shifts in excess of eight (8) total hours in a workday may voluntarily waive their right to a meal period. In order to be valid, any such waiver must be documented in a written agreement that is voluntarily signed by both the employee and the employer. The employee may revoke the waiver at any time by providing the employer at least one day’s written notice. The employee shall be fully compensated for all working time, including any on-the-job meal period, while such a waiver is in effect.

Amendments adopted in San Francisco on June 29, 1993. Amendments effective August 21, 1993.


Lynnel Pollack, Chairperson
James rude
Robert Hanna
Donald Novey
Dorothy Vuksich

Statement as to the Basis of Amendments to Sections 2, 3, and 11 of
Industrial Welfare Commission Order No. 5-89

Labor Code Sec. 1182.7 requires Industrial Welfare Commission (IWC) to provide accelerated review of petitions filed by organizations recognized in the health care industry who request amendments to an IWC order directly affecting only the health care industry. Under this authority, the California Association of Hospitals and Health Systems (CAHHS) petitioned the IWC to amend and/or clarify certain sections of Order 5, solely for employers and employees in the health care industry. The IWC accepted the petition which proposed to redefine "primarily" and ‘hours worked" to parallel federal law in Section 2, Definitions; to clarify and expand regulations regarding flexible schedules and overtime in Section 3, Hours and Days of Work; and to permit employees to waive meal periods in Section 11, Meal Periods. The IWC held three public hearings on its proposals in April 1993.
After deliberating on all the evidence presented with respect to its proposals, the IWC adopted amendments to Order 5 for the health care industry on June 29, 1993, and offers the following statement as to the basis for its actions:


Testimony suggested the current DLSE interpretations of "hours worked" were "unduly narrow" resulting in "substantial confusion and serious technical problems," and consistency with the Fair Labor Standards Act (FLSA) would eliminate this confusion. In response to testimony presented at the public hearings that the reference to "29 CFR Part 785" was unclear, the IWC amended that language and referred to "the Fair Labor Standards Act" instead, a term more easily understood by the public. On June 29, 1993, the IWC adopted language to assure "hours worked" in the health care industry would be interpreted in accordance with the FSLA, the regulations interpreting the FLSA including, but not limited to, those contained in 29 CFR Part 785, and federal court decisions. The clarification confirms the IWC’s intention that issues related to working time will be resolved consistently under state and federal law.

With respect to redefining "primarily" for the health care industry, the IWC decided since it had examined the professional component of the administrative/executive/professional exemption and adopted language to exempt learned and artistic professions as recently as 1989, it was time to respond to demands for a more flexible application of the executive/ administrative exemption than the rigid 51 percent rule. Employees testified current regulations sometimes resulted in treating an employee as nonexempt under a rigid application of a 51 percent rule, such as where emergency or other conditions resulted in less than 51 percent of the time

being devoted to exempt duties. On June 29, 1993, the IWC adopted language consistent with the FLSA, which promoted clarity and compliance while providing needed flexibility to allow exempt executive and administrative employees to perform nonexempt duties without losing their exempt status. In response to public comment suggesting the term "other pertinent factors" was unclear and confusing to employees, the IWC clarified the meaning of that item by listing some, but not all, examples of pertinent factors.


With respect to the petitioner’s request to amend Order 5 so that the IWC’s standard for a 14-day work period conformed with federal law, the IWC was advised that while such work periods are ordinarily implemented on a departmental-wide or institutional-wide basis, DLSE’s interpretation of the current regulation would allow one employee "to destroy the validity of such an arrangement by individually insisting of a seven day workweek standard." Public testimony in favor of the proposal claimed it set a "reasonable standard" one similar to the FLSA. Other arguments suggested a change was necessary to prevent individual employees from "opting in and out" of 14-day work periods because such activity could prove disruptive to established arrangements. Those opposed to the IWC’s proposal objected to deleting language referring to a "written agreement or understanding voluntarily arrived at" from the current regulation, protections not found in the FLSA. On June 29, 1993, the IWC adopted its original proposal regarding the 14-day work period because it provided for a more stable working environment by clarifying how 14-day work periods would be consistently calculated and because it confirmed the IWC’s intention that the California standard parallels the federal standard. Finally, the WIC stated its intent that flexible work arrangements, such as allowing employees to work up to 12 hours a day without overtime, and 14-day work periods, were mutually exclusive of one another and thus cannot be used simultaneously for the same employees.

Testimony supported the petitioner’s claims that DLSE’s interpretations regarding the flexible scheduling rules adopted in 1986 and 1988 limited desirable options for employees and frustrated the IWC’s intent of more, not less, flexibility. Many at a "reduced rate of pay," with overtime after eight hours a day. Although this practice is permissible, it sometimes adversely affected their benefits and pensions-in order to cope with DLSE’s overly "restrictive" policies. Other employees said they preferred to "mix days off" and working the same days each week was an "unrealistic" practice. The revised language clarifies the IWC’s original intent to maximize flexibility in scheduling so that the days and hours of work can vary. While some employees argued part-time employees who have flexible work arrangements should be paid premium wages when asked to work beyond their normal part-time arrangements, by the end of the public hearings, most employees agreed requiring premium wages for part-time or temporary employees who work less than 12 hours a day or 40 hours a week is unfair to full-time workers in the same work unit who earn straight time pay for the same daily and weekly hours. While a few employees suggested the "secret ballot election process" allowed under the IWC orders was "flawed" due to "lack of oversight," the Labor Commissioner testified DLSE had received few, if any, complaints regarding the election process.

After evaluating all the evidence, on June 29, 1993, the

IWC adopted its proposal to amend flexible scheduling rules so that an individual employee in the healthcare industry could agree with his or her employer to work on any days any number of hours a day under certain protective conditions. The new language allowing flexible work arrangements permits employers and employees maximum daily and weekly scheduling flexibility, including but not limited to allowing employees to work overtime on a regular basis, as long as the appropriate premium wages are paid for work after twelve (12) hours a day, or in the case of weekly overtime, forty (40) hours a workweek. Moreover, the final language clarified only one meeting regarding disclosure need be held when not more than one meeting is necessary. The IWC intended the same overtime standards to apply to all employees in a work unit regardless of full-time, part-time, on-call, replacement, permanent, or temporary status. The new rules do not invalidate any arrangement that was implemented prior to their effective date.
With respect to allowing employees in the health care industry to make up work time lost as a result of personal obligations, the IWC proposed and eventually adopted the petitioner’s suggested language. The IWC agreed the request was reasonable and balanced the needs of employees and employers. Moreover, the language provided flexibility on an as needed basis without requiring a group vote or long-term schedule change.


The petitioner requested the IWC to allow employees in the health care industry who work sifts in excess of eight (8) total hours in a workday to waive their right to "any" meal period or meal periods as long as certain protective conditions were met. The vast majority of employees testifying at public hearings supported the IWC’s proposal with respect to such a waiver, but only insofar as waiving "a" meal period or "one" meal period, not "any" meal period. Since the waiver of one meal period allows employees freedom of choice combined with the protection of at least one meal period on a long shift, on June 29 1993, the IWC adopted language which permits employees waive a second meal period provided the waiver is documented in a written agreement voluntarily signed by both the employee and the employer, and the waiver is revocable by the employee at any time by providing the employer at least one day’s notice.