©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 219 A strong dissent in Harris challenged the majority’s conclusions. The California Supreme Court granted review of Harris in 2007, and finally issued its decision in 2011.192 The Supreme Court unanimously reversed the Court of Appeal and remanded for further proceedings.193 The high court distinguished Bell as involving a stipulation that the plaintiffs’ work there was “routine and unimportant” and as relying on the 1998 version of a Wage Order, which was superseded by a 2001 version that incorporates relevant aspects of federal regulations. The high court explained that modern-day, post-industrial, service-oriented businesses may not follow the administrative/production worker dichotomy, and that courts should not strain to apply the dichotomy where it does not fit. Thus, while the dichotomy might still have use as an analytical tool, the Court of Appeal erred in applying the administrative / production worker dichotomy as a dispositive test. 7.6.5 The quantitative requirement for “white collar” exemptions In America generally, a “white collar” exemption applies where an employee must, as a “primary duty,” perform exempt tasks and, in doing so, regularly and customarily exercise discretion and independent judgment. In interpreting “primary duty,”194 the U.S. Department of Labor does not treat the amount of time spent by the employee on those duties as the sole test. The DOL recognizes that an employee might be an exempt executive without spending most of working time in managerial duties.195 In California, it’s different. In an analogous situation involving the exemption for outside salespeople,196 the California Supreme Court ruled that the test for exempt versus nonexempt duties is a “purely quantitative approach,” gauging whether “more than one-half” of an employee’s time is spent on exempt duties. In so holding, the California Supreme Court declined to follow the DOL’s regulation that “reclassifies intrinsically nonexempt sales work as exempt based on the fact that it is incidental to sales.”197 The quantitative test applies for other exemptions as well, including the executive exemption.198 7.7 Other Exemptions 7.7.1 Alternative workweek schedule To accommodate employers and employees who want flexible hours, certain California Wage Orders permit alternative work schedules (AWS), including “four-day workweek” arrangements, whereby nonexempt employees can work schedules in excess of eight hours per day without daily overtime. These arrangements require specified secret-ballot election procedures by employees in readily identifiable work units (such as a division, department, job classification, shift, or facility). The results of the election must be reported within 30 days to: Division of Labor Statistics and Research Attn: Alternative Workweek Election Results Department of Industrial Relations P.O. Box 420603 San Francisco, CA 94142-0603 While most employers use 10-hour alternative work schedules, longer schedules likely are permissible, subject to the foregoing procedures, provided that the employee is paid overtime for all hours over ten in the workday.199 There is additional flexibility for certain employees in the healthcare industry, who can adopt schedules that include shifts of up to 12 hours payable at straight time. Labor Code section 511 provides that an employer may adopt an AWS only if two-thirds of the affected employees approve the AWS in a secret vote. Specific AWS requirements appear in the applicable Wage Orders. Wage Order 1, for the manufacturing industry, permits adoption of an AWS only upon satisfying these requirements: (1) the employer proposes an AWS in writing, (2) two-thirds of the affected employees vote to
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