Flexible Work Arrangements in California Present Unique Challenges

Flexible work arrangements—such as telecommuting and compressed workweeks—can benefit businesses and workers alike, but California employers that wish to offer such arrangements must tackle complex workplace compliance issues. Here's what employers in the state need to know.

Workplace flexibility or "workflex" options are important to employees. Having the flexibility to balance work and life obligations is among the top three benefits rated as "very important" to employees (just behind paid time off and health care benefits), according to the Society for Human Resource Management's (SHRM's) 2016 Employee Benefits survey. 

Many California employers are embracing workplace flexibility. SHRM research shows that organizations in the state are providing employees with the following workflex options:

• Telecommuting (63 percent).
  
• Flextime (48 percent).
  
• Mealtime flex (34 percent).
  
• Flexible break arrangements (30 percent).
  
• Compressed workweek (23 percent).
  
• Shift flexibility (21 percent).
  

"At its core, workflex is about improving business results by giving people more control over their work time and schedules," according to SHRM.

While there are many benefits to offering flexible work arrangements, unique challenges can arise for employers that offer flexible work arrangements in California, said Helen McFarland, an attorney with Cozen O'Connor in San Francisco and Seattle.

"The most important challenge that employers face in offering flexible work arrangements is to properly manage compliance with California's wage and hour requirements and the company's security policies," said Grace Horoupian, an attorney with Fisher Phillips in Irvine. 

For example, she said, employers may have difficulty ensuring that employees who are working remotely are not working off the clock and are accurately recording all hours worked.

Employers may also find it challenging to ensure employees follow the company's information security requirements when working from home, Horoupian added.

[SHRM members-only toolkit: Complying with California Wage Payment and Hours of Work Laws]

California Laws to Consider

Employers that want to offer workflex options should keep the following state rules in mind:

• Daily overtime pay. Nonexempt employees in California are entitled to daily overtime at a rate of time-and-a-half after eight hours and double time after 12 hours. "If an employer offered four 10-hour shifts rather than five eight-hour shifts, in California, unlike many other states, the employer would be required to pay overtime for the extra two hours worked each day," McFarland explained. "Ten-hour shifts would also mean potentially offering two meal periods rather than one," she added.
  
• Alternative workweeks. In certain situations, employees waive their right to daily overtime pay and work regular shifts that exceed eight hours in a day. Employees can vote by secret ballot to approve such an alternative work schedule for a work unit (such as a department, team or job classification)—but employees still must receive overtime pay if they work more than 10 hours a day or 40 hours a week under those arrangements. "Unless an alternative workweek is in place, a compressed workweek means that daily overtime requirements must be met," Horoupian said.
  
• Meal and rest breaks. Nonexempt employees must also be provided rest breaks and meal periods at certain times and for certain durations during a shift. "Employees working remotely lack supervision and would be responsible for documenting their own work hours and meal and rest breaks," McFarland noted.
  
• Make-up time. Employees can make up work time that is missed for personal obligations without counting the made-up time as overtime hours if certain conditions are met. The employee must voluntarily request the make-up time, and it must be worked in the same workweek as the missed time, and time worked can't exceed 11 hours in a day or 40 hours in the workweek.
  
• Business expense reimbursement. California employers must reimburse employees for all business expenses they incur, McFarland said. This can make remote work arrangements complicated because California employers must pay for and establish remote workstations, she said. "This could include Wi-Fi fees, additional computer equipment and other unforeseen costs."
  

HR's Role

"Employers should establish clear, written policies regarding all flexible work arrangements and make sure to apply their policies fairly and evenly," McFarland said.

Horoupian said remote work policy should address:

• The hours that the employee is expected to work.
  
• Specifics of how to comply with information security policies.
  
• The need to keep accurate recordings of hours worked.
  
• How and when to report work-related injuries.
  
• Office attendance requirements.
  
• The company's right to revoke the remote work option at any time.  
  

Employees should sign an acknowledgment that they received and reviewed the remote work policy.

"Employers should also have all hourly employees working remotely sign an attestation that their reported hours of work are accurate," Horoupian added.

"Communication regarding expectations is key," McFarland said. "It may be beneficial to set up a trial period to determine whether the new system is workable and effectively meets the employer's and the employees' needs."

 

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