AB 2932 Workweek Hours and Overtime
On February 18, 2022, Assembly Members Evan Low (D-Campbell) and Cristina Garcia (D-Bell Gardens) introduced a bill that proposed shortening a full workweek from 40 hours to 32 hours to address employee turnover and burnout. If passed, this bill would apply to ALL businesses that have more than 500 employees. Additionally, employees would be compensated for a full 40 hour workweek while working only 32 hours, and if employees were to work more than 32 hours in a week, the additional work hours would be compensated as overtime pay. This bill does not specify what type of businesses would be affected, but only that it would apply to businesses with more than 500 employees. This bill has the potential to affect nearly 2,600 businesses across the state of California.
While a shortened work week has seen success in some countries, such as Iceland, the results have not universally been successful. The country of Sweden experimented with shortening employee work hours from eight hours a day to six hours, but found that it was too expensive and difficult to implement at a larger scale. In case studies with other businesses, employees initially thought that a shorter work week would provide them more free time, but they felt more tired and burnt out due to the amount of work that needed to be done to meet the same level of productivity. Some employees in these case studies found it exciting to work at a faster pace, and others feeling more pressure and stress due to needing to meet the same level of productivity in a shortened amount of time. This lessened the times that employees felt like they could take breaks and have friendly conversations with their co-workers. Additionally, while these businesses had employees take certain days off, their clients and other businesses they worked with still had five-day work weeks. As such, even on their days off, employees still felt the need to continue working and respond to emails.
The California Chamber of Commerce has listed AB 2932 as one of its “job killer” bills. In a letter addressed to Assembly Member Low, the Chamber states that California is the only state that requires overtime pay for employees who work more than eight hours in a day AND compensate employees for overtime for working more than 40 hours. If a business were to compensate an employee working 32 hours a week for 40 hours of work, there would be a significant increase in the hourly rate paid, especially if that employee required overtime hours to finish their work. The Chamber also mentions that the cost of labor is one of the highest costs for a business and that the increase in labor costs would make it extremely difficult to hire new positions. This would also put businesses who are still trying to recover from the effects of the COVID-19 lockdowns, in a position where they may be less inclined to offer their employees full time hours. The Chamber proposed that a better alternative to this bill would be allowing employees more flexibility with their work schedule, such as allowing employees to take breaks at times of their choosing or allowing for individualized alternative workweek schedules.
As it stands, while the goal of this bill is to address workforce turnover and employee burnout, it neglects several implications and consequences both for employers and employees. By making this a law that applies to all businesses with more than 500 employees, it is putting employers in a position where their labor costs may drastically increase, and it may increase the pressure for employees to be as productive as they were in a shorter amount of time. This bill also does not recognize the unique challenges that each industry faces and by trying to do a blanket reform on existing labor laws, this bill may exacerbate the problems it is trying to solve.