Worker laws at issue in budget
For decades, California employers have griped about state laws governing overtime pay and lunch breaks, contending that they raise costs and darken the business climate.
Now, their concerns have become a Republican bargaining chip in tough negotiations between the governor and lawmakers over how to fix a $14.8-billion hole in the state budget for the current fiscal year that threatens to shut down government by spring.
Major business groups took their concerns to Gov. Arnold Schwarzenegger, and last month he included them in his plan for addressing the budget crisis.
“Workplace reforms,” Schwarzenegger said, are “needed to help keep jobs in California.” Giving California employers incentives to boost payrolls and not flee to lower-cost states would generate more tax revenue and help balance the state budget, he predicted.
But Sacramento Democrats, who control both the Senate and Assembly, flatly reject the proposal, which has been pushed unsuccessfully by the GOP since the early 1990s.
“We’re not interested in rolling back hard-fought gains for workers in California,” said Senate President Pro Tem Darrell Steinberg (D-Sacramento).
At issue are two very different views about how to calculate overtime pay and how strictly to enforce rules that require workers to take unpaid lunch and rest breaks.
Consider the state rules on work breaks. They are intended to make sure that employers don’t force hourly workers to work for long periods without a break. Current law requires that mandatory, unpaid, half-hour lunch breaks be given before the end of the sixth consecutive hour on the job.
Employers say they want to modify the overly rigid law to give them and employees needed flexibility to set schedules. They say they want to make it possible for staff members to eat a sandwich at their desks voluntarily or to keep waiting tables -- and earning tips -- during a busy time at a restaurant. Additionally, working through a lunch break could give employees the option of going home early, employers contend.
Indeed, complying with such work rules often is unpractical, said workers in the package delivery and restaurant industries, who asked not to be identified because they were not authorized to speak by their employers. “I could be in the middle of a building and have to stop right there,” one courier said.
But not all workers are impressed with such arguments. In a 2005 Alameda County Superior Court case, a jury awarded $172 million to 116,000 current and former employees of Wal-Mart Stores Inc., which was accused of failing to pay workers for missed lunch breaks. The company is appealing.
Breaks are an essential part of a job, whether somebody works in a restaurant, store or factory, said Daniel Ponsky, 33, a Sherman Oaks bartender. “A breather is nice when you are on your feet and always running around,” he said.
Ponsky, who says he was forced to “work off the clock,” is a plaintiff in a break-related lawsuit against a restaurant chain that is now before the California Supreme Court.
As for overtime, California law calls for time-and-one-half pay for hourly workers after they clock eight hours in a single day. Additionally, in California and other states, extra pay accrues on a weekly basis after a worker puts in 40 hours.
Employers say the law makes it more expensive and difficult for managers to let an employee juggle his or her schedule to take care of personal or family needs, business lobbyists say.
Workers, they argue, should be free to take off an hour to watch a child’s Little League game and make it up by staying late the next day, without forcing their employer to pay overtime.
Labor unions counter that California’s existing overtime laws already provide plenty of flexibility for both bosses and their employees, without hurting workers’ safety or wages.
They point to a 1999 state law that exempts employers from paying overtime to individual workers who ask to alter their schedules to take care of personal needs. The law also allows all the employees of a specific business unit or office to switch to a 10-hour-a-day, four-day workweek -- without earning daily overtime -- but only after holding an election. Business lobbyists call it all very cumbersome.
Employers’ latest efforts to tie both the meal break and overtime issue to contentious budget negotiations are aimed at reversing basic worker rights, said Art Pulaski, executive secretary-treasurer of the California Labor Federation.
“It’s about trying to help Wal-Mart and other big corporations get away from the long-established understanding that people should get a meal break at work” or be paid extra for extra hours, Pulasksi said.
“This has nothing to do with the budget or stimulating the economy,” said Barry Broad, a lobbyist for the International Brotherhood of Teamsters and other labor unions. “It doesn’t help the economy to lower 20 million people’s wages during a recession.”
But business groups disagree.
Hampering business with overly restrictive labor laws that don’t encourage them to grow isn’t going to be good for the economy or the deficit-plagued budget, said William Dombrowski, president of the California Retailers Assn.
“There isn’t a large employer in the state who hasn’t been sued,” he said. “That tells you that the law as written is flawed, because not every employer in the state is a rogue who is trying to screw people out of meal breaks.”
Employers have learned the hard way that it can be costly “to let employees exercise common sense” about when they should or shouldn’t take breaks, said Allan Zaremberg, president of the California Chamber of Commerce.
But one labor expert demurs. Employers are losing lawsuits “because they broke the law” and “provide incentives to managers to shave labor costs,” said Nelson Lichtenstein, a historian and director of the Center for the Study of Work, Labor and Democracy at UC Santa Barbara. “When you eliminate a lunch break or overtime, what you are doing is chipping away in a petty fashion at the take-home pay of the workers.”
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