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 the 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 lowerwage 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 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 sw itch to telework and kept their jobs, as shown by relatively unchanged state tax withholdings, the report said.

But only a small minority of workers would actually benefit from the proposed changes, according to Jeffrey Buchanan, director of Public Policy

for Working Partnerships USA. Most workers unable to telework, Buchanan said, are essential workers. “I think it’s disingenuous to say that labor laws and basic protections for people is what’s standing in the way of telecommuting,” Buchanan said.

Gov. Gavin Newsom released specific guidelines for state employees early in the pandemic to allow for an effective shift to telework and released a “telecommuting arrangement” contract laying out specific work- from- home requirements, including a “safety checklist” workers needed to sign verifying their workplace met safety requirements. The state expects as much as 70 percent of its workforce to work from home permanently.

Making such contracts an option for private companies, Lapsley said, would reduce hazard and liability risks and encourage businesses to stick to work-from- home. Cal/OSHA and health officials have released employer guidance and safety recommendations for certain industries, but private companies did not receive such specific telework guidelines. As a result, Lapsley said, fears of litigation have become a deterrent for businesses to keep lower-wage workers employed from home.

Among the changes the groups are advocating for are more flexibility over the fixed 8- hour workday, which doesn’t allow for workers to enter individual work contracts with their employer, and clearer standards regarding liability if an employee’s work schedule isn’t followed to the letter or if a worker gets hurt while working from home.

The California Business Roundtable has previously advocated for sweeping reforms to the Private Attorneys General Act, which allows individual employees — as opposed to the attorney general — to sue their employers for alleged Labor Code violations. This would require statutory changes, but the business group also says it’s possible to address concerns over the 8- hour workday without statutory changes.

Guidelines clarif y ing that employees working from home but who not partaking in regular work duty are not protected under compensation laws, for example, would diminish the liability burden for businesses. Without addressing these labor code regulations, important litigation issues arise, Lapsley said, especially for small and medium businesses, who are not financially ready to face them. “They face higher liability if they propose telework to low-wage employees,” Lapsley said.

Buchanan warned it’d be a slippery slope.

“T here are ways corporations can implement safe work-from-home that don’t require leaving our low- wage workers completely vulnerable if disaster is to strike,” he said.

This article is part of The California Divide, a collaboration among newsrooms examining income inequity and economic survival in California.