State Panel Moves to Relax Overtime Law Amid Protest

SAN FRANCISCO — Amid noisy labor protests at the Civic Center here, state authorities Friday proposed slashing away at California’s daily overtime rules, a move that would jettison a historic protection that has fattened paychecks for millions of workers.

The Industrial Welfare Commission’s plan, adopted at the end of a raucous three-hour meeting, would eliminate in many industries the state requirement that hourly employees be paid overtime whenever they put in more than eight hours in a single day. Authorities estimated that the rule change would apply to half of the state’s 13 million workers.

The proposal, adopted on a 3-2 vote, faces public hearings in Los Angeles, Sacramento and San Francisco. Still, after undergoing nearly two years of on-and-off scrutiny, the plan is expected to receive final approval from the same Republican-controlled Industrial Welfare Commission by this summer.

It does not require any action by the state Legislature. Republicans tried to pass legislation to accomplish similar aims last year, but the bill was blocked by labor-backed Democrats.

The proposal would bring California’s rules into line with looser federal standards, which require overtime pay only if an hourly worker puts in more than 40 hours in a week. As a result, some employees who now put in, say, four 10-hour days no longer would earn overtime pay.

Business groups and the administration of Gov. Pete Wilson have championed the move to eliminate daily overtime requirements. They argue that such a change would encourage more firms to adopt flexible work schedules to cut their own costs while also helping workers balance the demands of work and family.

Organized labor, however, regards the move as part of an assault on protections long held dear by workers. The daily overtime rule in California dates to 1918, when the state ordered that fruit and vegetable canning companies pay time and a half to women and children for any time beyond eight hours in a given day. The aim was to prevent safety hazards and other problems resulting from overwork.

Tempers flared and emotions bubbled as the panel, which deals with state wage regulations, struggled to hear testimony over jeers and chants from the standing-room-only crowd.

“We don’t want you to impose longer hours for working people for less pay,” said Art Pulaski, executive secretary-treasurer of the California Labor Federation, the parent organization for unions in the state. “Business owners are making more money than they have in history. Working people are making less than they have in decades.”

But Julianne A. Broyles, a lobbyist for the California Chamber of Commerce, argued that labor has misinterpreted the issue. “This is not about repeal of the eight-hour day,” she said. “This is about reform of the eight-hour day.”

In the 47 states where the federal overtime standard prevails, she said, workplaces “are operating just fine on the 40-hour week.”

Broyles said California businesses need flexibility to be more humane to their workers and compete better in the marketplace.

Currently, employers in many of the state’s industries must pay at least time and a half when workers labor for more than eight hours--even if they don’t work more than 40 hours during the week.

This means that when parents working full time leave work early on Monday to take their children to the doctor, for example, they must be paid overtime if they make up the lost time by working extra hours Tuesday. That penalizes employers, Broyles said, who cannot afford to pay the extra money.

Already, daily overtime rules have been waived or loosened in such industries as health care and agriculture, where 60-hour weeks are permissible without overtime pay. Also, unions are free to waive daily overtime requirements and negotiate alternative schedules, such as those providing four 10-hour days. In addition, the daily overtime rules do not apply to so-called exempt employees such as managers and certain professionals and administrators.

There currently is a special provision in state law that allows workers to waive daily overtime if it is approved by two-thirds of the company’s work force. But most firms consider the process too cumbersome to adopt.

The new proposal would extend the overtime rule waiver to some of the state’s biggest industries: manufacturing, retail and wholesale trade, transportation and restaurants and hotels, along with the broad occupational category covering professional, technical, clerical and mechanical workers.

If the change gets final approval, Broyles said, there will be “flexibility for employees to go back to school, to spend more time off with their families . . . to attend school activities. You would reduce day-care costs. You would reduce elder-care costs.”

Outside, however, several hundred angry demonstrators convened on the Civic Center before the meeting, decrying the proposal. There were picket signs and bullhorns, hard hats and folk ballads.

Marble mason Dan Wylie took time off from his construction job at the nearby court building to join the protest for what he sees as a crucial safety and equity issue.

“It’s a high-stress job,” he said. “And eight hours is generally plenty. . . . The more stress there is, the more chance there is of somebody getting hurt.”

Part-time workers could also lose out under the proposal. Take, for example, Allan Carley, 48, a Woodland Hills accountant. Carley, laid off from a salaried $60,000-a-year job, now works as a temporary accountant farmed out for a few months at a time to companies.

“It’s not unusual for me to work 10, 11, 12 hours a day at the end of the month,” he said.

Overtime hours help make up for the fact that his pay is two-thirds what it once was and that he has no benefits, he said. Changing the rules would be an incentive for employers to simply work different temps on different days to avoid paying overtime, he said. “The clients would just work you overtime, then dump you,” he said. “It’s very frustrating. As it is, we are just trying to keep the wolf away from our door.”

But Steve Armstrong, owner of Lee Armstrong Co., a commercial flooring contractor in Chatsworth, said the daily overtime rule is a headache for his company. “We do a job a day, and you have to finish the job. You can’t just leave,” he said.

As a result, overtime is about 30% of his payroll. But if he could just give employees time off once they finished a job, he could probably eliminate overtime, he said.

La Ganga reported from San Francisco and Silverstein from Los Angeles. Times correspondent Jill Leovy in the San Fernando Valley also contributed.