Bill Would Right Wrong of Daily Overtime Pay Cut

For 80 years, California required overtime pay after eight hours work in a day. Far from depressing our economy, this requirement promised that California was a good place to work, get paid and raise a family.

It has been a full year since former Gov. Pete Wilson’s three appointees to the Industrial Welfare Commission (IWC) ended time-and-a-half daily overtime pay for up to 9 million eligible workers. Just how hard this has hit working families’ incomes is unknown, but it may be the largest single pay cut ever foisted on the state’s work force. Full-time employees still are paid weekly overtime for working more than 40 hours a week, as required by federal law. But many part-time employees who used to rely on daily overtime pay to make up for working fewer hours are now out of luck completely.

The full picture of the financial blow to workers has been somewhat masked by the state’s thriving economy. But mere statistical economic indicators belie a more sober reality. Here are just a few true stories:

* A medical professional and her husband, employed in a rural acute care hospital, estimate they lost $5,000 in daily overtime pay in 1998. To partially make up for the pay loss, she was forced to abandon the part-time schedule that had enabled her to spend time with her young daughter. She works much longer hours now for less total pay and sees her child far less.

* A registered nurse at a convalescent hospital in the Central Valley reports that without a pay incentive, employees at the facility declined to work necessary long shifts. When the facility was unable to keep the proper staffing ratios, it had to reduce the number of beds occupied. With less revenue from patients coming in, the hospital finally closed its doors, forcing many employees to seek unemployment benefits. The nurse lost her once-stable occupation.

* A young man working as an aide in a nursing home reports that he used to save a portion of his overtime pay in an Individual Retirement Account. Athough his income was modest, he was saving for his future. With the loss of overtime pay, he was forced to stop the IRA contributions. He has seen his income and his confidence cut.

People whose pay has been cut are stunned to learn that no legislation was needed or passed to repeal the daily overtime pay policy. Wilson eliminated it simply by a vote of the IWC. He did so over the vociferous objections of the Legislature, which twice defeated similar proposals.

Now, a two-pronged approach will be taken to bring back daily overtime pay in the short term and to protect it in the long term. First, Gov. Gray Davis recently announced that he will reinstate daily overtime pay. Second, legislation is needed to make permanent the daily overtime rule so that any future efforts to change it will require approval by the Legislature. As my first bill of the New Year, I have introduced such legislation, Assembly Bill 60.

My legislation also takes into account the need for flexibility in the workplace. Clearly there are people who want to work alternative schedules, such as a four-day workweek at 10 hours a day. My bill allows for these arrangements with one crucial difference from the Wilson approach--the consent of the affected employees must be given.

The elimination of daily overtime pay is a failed policy that has hurt working families, dragged down workplace morale and, in some cases, led to business closures. We now have a chance to right the course, and bring back the eight-hour day that has served well generations of Californians.