Business groups clock in on effort to loosen overtime law.

Several statewide business groups have launched their attempt to loosen the state's daily overtime law, backing legislation that would allow employees to seek permission from their bosses for an alternative work schedule without requiring employers to pay overtime.

The legislation faces an uphill battle amid what's expected to be sharp opposition from labor unions. The fight is likely to be intense given the prospects of an all-out initiative war between Gov. Arnold Schwarzenegger and his business allies on one side and labor unions and their Democratic allies on the other.

"With the unions caught in a battle with the governor on so many fronts, the attempt to reform daily overtime could come up as a bargaining chip," said Michael Shaw, assistant state director for the National Federation of Independent Business.

Several bills have been introduced to loosen the overtime law, though only one has gained the backing of the state's major business groups. That one would allow employees to seek permission from employers to set-up a schedule of four ten-hour days, commonly referred to as a "4-10 workweek."

The legislation, by Assemblyman Van Tran, R-Costa Mesa and drafted by the California Chamber of Commerce, comes up for a hearing on April 20.

California is one of only four states requiring overtime pay (1.5 times the hourly pay rate) for hourly workers who work more than eight hours in a day; the others are Alaska, Nevada and Wyoming. All other states conform to the federal standard that requires overtime for employees who work more than 40 hours in a week, regardless of how many hours are worked in a day.

California employers have long chafed under this law, saying it limits their flexibility in arranging alternative work schedules. But labor unions and their Democratic allies say weakening daily overtime takes money away from workers and they note that the current law allows enough flexibility to set up alternative workweeks.

Eight years ago, under pressure from employers, Republican Gov. Pete Wilson overturned the daily overtime law administratively and implemented the national standard. But 18 months later, Democrat Gov. Gray Davis carried out a campaign promise and signed legislation reinstating daily overtime.

Now with Schwarzenegger in office, business groups and Republican lawmakers are trying again to loosen the restrictions.

Debate over flexibility

Two approaches are being considered. One eases the process for getting alternative workweek schedules approved; besides the Tran bill, another proposal would allow for a maximum of 12 hours worked in a day without overtime.

The other approach focuses on exempting classes of employees from daily overtime. Already, all workers receiving salaries are exempt, along with public safety employees and many hospital workers. A couple of bills now circulating extend the exemptions to other classes of employees.

A spokesman for Schwarzenegger said the governor has not taken a position on the bill. However, he has often said that more needs to be done to make California a more attractive place to do business.

"We're hearing from our member companies that their human resources personnel have to turn down request after request from workers seeking to work 4-10 weeks," said Julie Broyles, human resources and small business lobbyist for the Chamber who drafted the legislation. "It's all about providing a more flexible workplace, where employees can take that extra day to care for a child or relative or can avoid those harrowing rush-hour commutes."

Currently, in order to switch to an alternative work schedule, the employer calls for an election by secret ballot among workers. Two-thirds of the workers must approve the change in order for it to go into effect.

Under the Tran legislation, Broyles said, employees would initiate the request to work a 4-10 schedule; the employer then approves or disapproves the requests.

The emphasis on the employee seeking the change is intended to counter union claims that employers want to impose extended hours on workers without having to pay overtime.

But labor groups aren't buying the argument.

"Under current law, employers already have the option to switch to an alternative workweek schedule, if approved by the workers. There is no need to change the law," said Caitlin McCune, legislative advocate for the California Labor Federation.

"The reality in many workplaces is that if the boss comes up to a person and says here's the schedule we would like you to adopt, that person is going to feel obligated to go along," McCune said. "There's really no safeguard for overtime pay."

McCune said the daily overtime bills are part of a larger agenda among employer groups to take away worker protections. This is also the view of the Democratic leadership in the Assembly.

"This is simply a move by employers that's designed to cut their costs," said Steve Maviglio, deputy chief of staff to Assembly Speaker Fabian Nunez.

If the Tran bill and similar measures fail to pass the Legislature, Schwarzenegger won't be able to do what Wilson did in 1997. After a measure to scrap daily overtime pay was defeated on largely party-line votes, Wilson went to an obscure state body known as the Industrial Welfare Commission that has the power to set state policy on wage and hour laws. The IWC passed the proposal on a 3 to 2 vote. But last year, the Legislature voted to defund the IWC.

Changes Proposed,

Fight looms over reforms.

Current Law: Hourly workers get time-and-a-half when working more than eight hours in a day

Proposals: Business groups favor legislation making it easier to adopt a "4-10" workweek and other flexible work schedules. Other proposals would exempt certain employees from daily overtime requirements.

Players: Business groups and Republican lawmakers support changing the daily overtime law; labor unions and Democratic lawmakers are opposed. Gov. Arnold Schwarzenegger has not taken a position

Timetable: An Assembly committee will hear three proposals on April 20; any new law passed by the Legislature could take effect by Jan. 1

Prospects: Slim chance of passage. But issue could re-emerge as a bargaining chip or as part of a larger deal.