Will Having Every Friday Off Work Become the New Normal? The 5 Things Employers Should Consider Before Establishing A 4-Day Workweek

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Workers have been asking for it, and some employers are starting to listen: we’re talking about the push to establish four-day workweeks as a new standard. And we don’t mean assigning employees to work four 10-hour days per week – we’re talking about trimming employees’ mandated hours by 20%. So is 32 (hours) the new 40? This article will explore the pros and cons of a four-day workweek, and then offer five steps to consider if your organization wants to adopt this new model.

Brief History of the Workweek

As a brief travel through time, workweeks initially started with approximately 120 hours per week, with employees working six days a week. It was not until 1926 when Henry Ford introduced the five-day workweek within the Ford Motor Company. This decision impacted the entire job industry, leading President Roosevelt to sign into law the Fair Labor Standards Act (FLSA), limiting the standard workweek to eight hours a day and five days a week. To present, the five-day workweek remains the standard across the nation.

However, as reported in Forbes, some workers and labor unions believe the five-day workweek is outdated because it is considered a “solution to a century-old problem.” This is particularly interesting for advocates of the four-day workweek because it is argued that most work can be done online, and most workers are no longer working in assembly lines. Thus, workers across the nation are pushing to have the average hours worked per week decrease by reducing the number of days worked.

A 2018 survey by the Workforce Institute at Kronos revealed that more than a third of full-time workers (about 40%) in the U.S. favor a four-day workweek. This could be linked to productivity reports and the fact that world-wide averages of hours worked per week typically fall below that what we find here in the States.

For example, in 2019, the Organisation for Economic Cooperation and Development conducted a survey regarding employment and labor market statistics. In that survey, Korea took the lead with an average of 37.82 hours worked per week, the U.S. took second place with an average of 33.19 hours, and Japan taking third place with an average of 31.61 hours. Surprisingly, however, NPR reported that Microsoft Japan implemented a four-day workweek, allowing employees to still get their normal paycheck despite the limited number of working hours. Apparently, the results included a productivity boost of 40% and lower electricity costs. Similarly, PR Newswire reported that, in 2018, a New Zealand trust management company implemented a four-day workweek, resulting in a 20% gain in employee productivity. That same year, the New Zealand company made the four-day workweek policy permanent.

While it seems unlikely that federal wage and hour law will be amended any time soon to reduce the standard workweek below 40 hours, it does not seem like a far-fetched idea for employers to consider adopting a 32-hour workweek anymore. But there are pros and cons to consider before making the switch.

Negative Implications of a 4-Day Workweek

Four-day workweeks carry with them other implications besides happier workers and increased work-life balance. In fact, employers considering adopting a shorter workweek need to take into account wage and hour laws, compliance with other relevant employment laws, state-specific considerations, labor unions and collective bargaining agreements (where applicable) – and the fact that shorter workweeks may not work for everyone.

Wage and Hour Issues

Four-day workweeks present issues for both hourly and exempt employees. For hourly employees, there are wage and hour issues regarding overtime, leave, time off, benefits, effect on part-time employees, and issues for those employees who are not unionized. This is particularly important for non-unionized employees without a collective bargaining agreement (CBA) establishing their workweek and overtime requirements.

As stated above, the FLSA requires employees to be paid at an overtime rate of for all hours worked over 40 hours in a workweek. But with a 32-hour workweek spread throughout four days, employers could still implicate overtime requirements. In some states, like California, an employee receives overtime pay after working more than eight hours in a single day – which could lead to unexpected additional labor costs and the need for strict wage-and-hour-law compliance to ensure you don’t run afoul of the law.

Similarly, sick leave, paid time off, or vacation plans may be affected by a four-day workweek. Generally, laws allow businesses to develop their vacation plans, but businesses are often bound by their handbooks – so vacation plans should state exactly what time off is provided to employees. In some states (again, like California), employers who provide paid sick leave using an accrual method other than one hour for every 30 hours worked must ensure that employees have 24 hours of paid sick leave by the 120th day of employment. A four-day workweek would then possibly decrease the chances of employees accruing 24 hours of paid sick leave by the 120th day of employment even by taking just a few days off.

On the other hand, treatment would be different for exempt employees. In 2016, we published a Legal Insight explaining the FLSA definition of “workweek” for exempt employees. FLSA’s recordkeeping regulations do not require the same workweek for both non-exempt and exempt employees. And, because exempt employees are not eligible for overtime pay, a four-day workweek should not present any major problems. However, make sure you consult with your employment lawyer about this possible change.

Proper Compliance with Other Employment-related Laws

Just like with wage and hour laws, a four-day workweek may present issues in other employment laws, especially when it comes to discriminatory practices.

Under the American with Disabilities Act (ADA), there is a risk that a compressed workweek may bring come with negative consequences for some employees with ADA protections. For example, some employees that experience fatigue or weakness may require shorter days. Or, some employees may not be able to perform at a higher productivity level in order to accomplish company goals in 32 hours a week instead of 40.

Similarly, under the FMLA, four-day workweeks may cause issues surrounding absenteeism and retaliation. With a shorter four-day workweek, absenteeism, sick leave requests, or leaves of absence may become more apparent to supervisors or managers, leading to stricter – and possibly unfair – standards surrounding FMLA leave. Without proper training for a four-day workweek, managers and supervisors could be accidentally retaliating against some employees.

Labor Issues and Collective Bargaining Agreements

Labor unions are beginning to make the case for even less work for their workers. In 2019, the AFL-CIO (the largest federation of labor unions in the U.S.) released a report regarding the Future of Work and Unions focusing on methods for employees to take advantage and benefit from ever-evolving technology. The report explores how artificial intelligence and other new technologies have generated the interest in a “leisure dividend” allowing the reduction of overall work hours with no reduction in pay for workers.

What about collective bargaining agreements? While it is true that the FLSA established the 40-hour workweek, work hours can be reduced by bargaining a four-day workweek, establishing minimum work hours for issues surrounding insufficient work, and even pay or other wage and hour issues like overtime pay by establishing a 32-hour workweek.

In 2014, the California Court of Appeal concluded in Vranish v. Exxon Mobil Corp. that when there is a valid collective bargaining agreement, “employees and employers are free to bargain over not only the timing of when overtime pay begins within a particular day, but also the timing within a week.” And, labor unions may argue that a holding such as this one may be valid for purposes of a four-day workweek of 32 hours without reduction in pay. Furthermore, the FLSA requires employees to be paid at an overtime rate for all hours worked over 40 hours in a workweek. And, assuming a CBA provides for overtime compensation for all hours worked over 32 hours in a workweek (instead of 40), then such CBA would be valid under the FLSA.

The issue is, however, that both employers and unions have to consent to the change, triggering negotiations on other unrelated issues for a four-day workweek. If you have a unionized workforce and are considering a 32-hour workweek, you should coordinate with your labor counsel before advancing any changes.

It Just Won’t Work for Everyone

Lastly, the reality is that shorter workweeks may just not work for everyone. Four-day workweeks and their limited hours may result in higher employee costs or lower quality of service.

For example, the Washington State Legislature proposed SB 6516, advocating for a 32-hour workweek. The bill also required employers to pay overtime for all hours worked over 32 hours at time-and-a-half. While this may sound great for employees, there is still a problem: implementing a four-day workweek may cause employers to increase wage costs by at least 12% and businesses may be forced to raise prices on consumers or lay employees off.

The Bright Side to a Four-Day Workweek

Even with the potential traps explained above, four-day workweeks have many positives that should be considered by all employers considering the option.

Increased Productivity

Advocates for the four-day workweek argue that the five-day workweek is actually counterproductive. In 2018, the International Labour Organization (ILO) of the United Nations concluded in its research paper that, “longer hours of work are generally associated with lower unit labor productivity, while shorter hours of work are linked with higher productivity.” In support of this statement, the ILO compared several countries and found that the relationship between the number of hours worked annually per person and labor productivity (measured as GDP per hour worked) was strongly negative.

Similarly, a study in the American Journal of Epidemiology found that working long hours may have a negative effect on cognitive performance. That is, that those who worked 55 hours per week performed worse on certain mental tasks than those who worked 40 hours a week. So, even though the study explored hours worked over 40 hours per week, the study serves as a great resource for advocates of the four-day workweek when looking for studies to point at that “fewer hours = higher productivity.”

Equal Workplace

Another valid argument in favor of a shorter workweek is the push for an equal workplace. Tools such as a four-day workweek used to reduce class inequality could benefit all workers, but could be particularly impactful for women. Marketplace reported that more than two million women left the workforce since 2020, many of them leaving to care for their children. A recent article from Fisher Phillips’ Emily Litzinger discussed this concerning problem and provided some possible solutions.

Even without taking the COVID-19 pandemic into account, women remain less likely to participate in the labor market than men around the world. UN Women conducted research regarding facts and figured of women in the workplace, showing their lower labor participation rate and their disproportionate responsibility for unpaid care and domestic work, such as child care. These numbers only increased during the pandemic. As reported by the U.S. Census, around one in five of working-age adults reported to not be employed because COVID-19 disrupted their childcare. And, of those not working, women ages 25-44 are almost three times as likely as men to not be working due to childcare demands. To put it in perspective, about one in three (32.1%) of these women are not working because of childcare, compared to 12.1% of men in the same age group.

Needless to say, a four-day workweek would promote an equal workplace as employees would be able to spend more time with their families and find some balance between their work and home commitments.

Competitive Advantage in the Marketplace

Like with any trend seen as friendly to workers, those employers who adopt the 32-hour workweek change are likely to see a boost when it comes to attracting and retaining talent. The competition for skilled workers remains fierce and will likely stay at this level for the foreseeable future, so anything you can do to stand apart and provide a welcoming working environment will be favorably received in the internal and external marketplace.

Thinking About Implementing A Four-Day Workweek? 5 Things to Consider

With all of the arguments for and against a four-day workweek, is your company thinking about implementing a shorter workweek? If so, we compiled a list of five key things you and your company to look out for before making it official.

  1. Clarify the meaning of a 4-day workweek and its intent
    Make sure your workers understand what your company means when its implementing a four-day workweek. For example, you may want to clarify that this new policy is not an another way of saying 4 X 10 (e.g., still 40 hours per week), but instead that you are implementing a workweek of only 32 hours (i.e., 4 days of 8 hours each).

    Further, make sure you communicate with your workers about the intent of this new policy. Do you want to create a more inclusive workplace? Do you want to increase productivity? Do you want to change company hours? The cliché of “communication is key” has never been more appropriate.
  2. Consider wage and hour issues
    As discussed above, the possibility of wage and hour violations should immediately come to mind when considering a four-day workweek. This is even more important in states like California that don’t have just weekly overtime requirements but also daily requirements. Before you implement a new and shiny four-day workweek, consult with your employment counsel about the possible ramifications at the state and local levels.
  3. Consider the impact on your customers
    Is your business dependent on customers that walk in and out of the door on a daily basis? If so, remember to consider the impacts of a shorter week on your customers. If you are looking to implement a four-day workweek, make sure you establish policies and conditions regarding flexibility to accommodate operational demands, peak business periods, and customer needs. You may also want to consider staggering work schedules— something like part-time workers.
  4. Education, communication, and training
    Just like you should communicate your intents and clarify the meaning of a four-day workweek, you should also communicate with your employment counsel about educating and training your workers. For a four-day workweek to properly function, companies will need to change their employee handbooks, clear messages need to be relayed from top senior leaders, the Human Resources department needs to be up to speed, and most importantly, supervisors and managers need to be properly trained in order to avoid any liability.
  5. Consider a test-drive before committing
    Is the idea of a four-day workweek attractive, but you find it too intimidating? Do not worry. There is no need of a full commitment right at the outset. Instead, do a test-drive of how your workers react to a four-day workweek and evaluate the productivity levels; then, go from there. Many companies are already doing this. For example, in 2020, NPR reported that companies like Shake Shack shortened managers’ workweeks to four days (32-hour weeks) without cutting pay to see how it impacted the business.

Conclusion

It is apparent that there are many potential traps when implementing four-day workweeks, and this decision should not be taken lightly. Moreover, regardless of the state from where an employer conducts its operations, you should never proceed to implement four-day workweeks without first consulting your employment counsel.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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