California Democrats have proposed legislation that would mandate a four-day workweek for large companies.
A bill put forward by Democratic state Reps. Cristina Garcia and Evan Low would require companies with 500 employees or more to change the definition of a work week from 40 hours to 32 hours. The bill, AB 2932, would mandate that employees receive the same level of compensation for working four eight-hour days as they would for a regular five-day, 40-hour work week.
Any employee required to work more than 32 hours would have to be compensated with overtime pay. Hours worked in excess of 32 hours would be compensated with time-and-a-half paym while overtime work over 40 hours would require double pay by law.
The legislation would effectively force employers to give workers a raise because it prohibits reduced pay for the fewer hours worked. According to the state's Employment Development Department, more than 2,600 California companies and more than 3.6 million workers would be impacted by the bill.
There is an exemption, however, for companies that have a collective bargaining agreement with workers — meaning large companies with unionized employees can keep the standard 40-hour work week. It is unclear how the legislation would impact salaried employees.
Similar legislation has been introduced at the federal level by U.S. Rep. Mark Takano (D-Calif.).
Garcia, one of the state bill's sponsors, told the Los Angeles Times that the COVID-19 pandemic has created an opportunity for Americans to rethink what work should look like. According to the U.S. Bureau of Labor Statistics, more than 47 million Americans quit their jobs in 2021, and many transitioned to working from home during the pandemic.
“We’ve had a five-day workweek since the Industrial Revolution,” Garcia said, “but we’ve had a lot of progress in society, and we’ve had a lot of advancements. I think the pandemic right now allows us the opportunity to rethink things, to re-imagine things.”
Democrats claim that a 32-hour work week would actually increase productivity and profits, citing pilot programs at companies like Kickstarter as evidence the idea could work. They also point to case studies from Iceland that found companies that reduced their work week to 35 or 36 hours maintained the same level of productivity and service while workers reported being happier.
“The fact of the matter is many other companies are already doing this, and other countries too, so I think this is the direction we’re going,” co-sponsor Low said.
The California Chamber of Commerce is firmly opposed to the legislation, calling it a "job killer."
Ashley Hoffman, policy advocate for the California Chamber of Commerce, wrote in a letter to Low that the bill "imposes a tremendous cost on employers and includes provisions that are impossible to comply with."
She estimated that the bill would impose a minimum 10% increase in wages per employee per week, which she said would be unsustainable for many businesses.
“Such a large increase in labor costs will reduce businesses’ ability to hire or create new positions and will therefore limit job growth in California,” Hoffman said. “This is especially true now as businesses are still recovering from the impacts of COVID-19 and resulting rises in supply chain costs.”
Hoffman also noted that an unintended consequence of the bill could be a reduction in hours for workers.
AB 2932 will be considered by the state Labor and Employment Committee before it advances in the legislature.