California laws protecting low-wage workers inhibit telework, new report by business groups suggests

Coronavirus cases are rising again in California and business groups are calling for relaxed enforcement of labor regulations so that lower-wage workers can get equal access to telework during the remainder of this months-long pandemic and beyond. But labor unions say it would only leave workers more vulnerable.

A new report by the Center for Jobs and the Economy and the California Business Roundtable suggests that California employment laws disproportionately benefit higher-paid workers, who under current Labor Code regulations were able to shift to telework swiftly while some lower-wage employees were never given the chance to switch to work from home, because of businesses’ new concerns over liability.

Before the pandemic, only 7% of workers in the United States had access to telework, according to a Pew Research Center analysis of 2019 data from the Bureau of Labor Statistics. The ones who had telework access were often managers or other white-collar professionals and highly-paid, salaried workers. Today, about 40 percent of the U.S. labor force is working full-time from home, according to the Stanford Institute for Economic Policy Research.

“Suddenly we are having a tectonic shift in how people are ready to think about work,” said California Business Roundtable president Rob Lapsley. But the labor laws in place, Lapsley said, haven’t shifted with the times. “What we’re discussing now is whether the state is going to help lean on that, or whether they’re not.”

Unlike most states, who deal with overtime on a weekly 40-hour basis, California has strict overtime laws: every hour needs to be paid, and more than 8 hours in a day, that’s extra pay. But in a telework pandemic economy, these laws protecting workers are disincentivizing businesses from offering telework as an option, Lapsley said. Timing meal periods and sick leaves are other requirements the group argues are hard to transfer to telework.

Salary employees and hourly employees who make above twice the minimum wage are exempt from many of the Labor Code protections which the report argues inhibits telework. But not other wage workers.

Many who are paid by the hour or making less than twice the minimum wage, like those working call centers or in IT, were asked to physically come back into work — or were never called back. Meanwhile, most higher-wage workers swiftly made the switch to telework and kept their jobs, as shown by relatively unchanged state tax withholdings, the report said. Read more via SiliconValley