San Mateo County Times

State approves high-tech work schedule changes
Saturday July 03, 1999

By Liz Garone

SACRAMENTO -- Silicon Valley businesses achieved two small but substantial victories this week.

Even after a bill reinstating the eight-hour workday is put into law, employers will not have to pay employees overtime when they work four 10-hour days. And, the tax credit for research and development will increase by 1 percent.

Schedule options

On Thursday, the state Senate approved an amendment that will allow companies and workers some continued flexibility in their work week. The bill, authored by Assemblyman Will Knox, D-Los Angeles, was amended after repeated requests from Silicon Valley business leaders to consider the need for alternative schedules in the high-tech work world.

Without the amendment, employers would have been forced to pay their workers for overtime on any days that they worked more than eight hours -- even if the employees had chosen that schedule.

The only other option would have been to abolish the flexible work week schedules -- a move that would have damaging effects on high-tech employers' ability to recruit and retain qualified workers, according to Carl Guardino, president of the Silicon Valley Manufacturing Group.

For Guardino, the amendment was both a victory and a compromise.

"We're not getting the whole loaf of bread but a good, thick slice," he said. The amendment addresses only people working four 10-hour days and those who were working a flexible schedule as of July 1.

Also approved was a Senate bill which will increase the state tax credit by 1 percent for money spent on research and development.

Larger tax credit

While 1 percent may not seem like much, it represents millions of dollars in savings for Silicon Valley companies, according to Sen. Byron Sher, D-Palo Alto, who authored the bill.

Savings to the companies are estimated at $9.5 million a year.

"It's not earth-shaking, but it's a demonstration of the importance to high-tech in our area and California," he said. "Research and development is key to the success of companies in Silicon Valley."

Gov. Gray Davis is expected to sign the tax credit bill next week.

The overtime bill, with the amendment, will be brought before the full Senate next week.

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