Dive Brief:

• Public and private employers in Maryland would have an incentive to shift to a shorter workweek under a pilot program state lawmakers proposed Jan. 18.
• The “Four-Day Workweek Act of 2023,” HB 181, would provide employers with a state income tax credit of up to $750,000 per fiscal year, limited to two credits, if they transition at least 30 employees from a 5-day workweek to a 4-day workweek without reducing pay or benefits. The state department of labor would administrate the program.
• To receive the tax credit, employers would have to allow the department to conduct employee surveys and interviews to study the impact of their transition to a shorter workweek. The program would take effect July 1 and expire at the end of 2027. Maryland senators filed a companion bill, SB 197, on Jan. 20. A committee hearing is scheduled for Feb. 9.

Dive Insight:

Companies have been experimenting with a shortened workweek for several years. But it was the findings of an international six-month pilot program in 2022 by the nonprofit group 4 Day Week Global that put the four-day workweek on the mainstream radar. The findings also inspired Maryland General Assembly Delegate Vaughn Stewart, a co-sponsor of HB 181, to introduce a similar program for employees in his state, he reportedly told Vice.com.

The timing seems right to many employers. Work priorities and expectations radically changed as a result of the pandemic. Actions like “quiet quitting” and the Great Resignation show that workers have decided they want quality, meaningful work and also to be able to do things outside of work, Charlotte Lockhart, 4 Day Week Global’s managing partner and co-founder, recently told HR Dive.

More than 30 businesses, most of which are in the U.S. or Ireland or are fully remote, participated in the group’s pilot program. They weren’t required to institute an exact type of work-time reduction. But they did have to commit to maintaining pay at 100% and provide a “meaningful” reduction in work time, the report explained. In practice, the actual workweek of participating employers declined by six hours, from about 41 to 35 per week, the report noted.

The companies appeared to be satisfied. Among the 27 businesses that responded to a final survey, 18 said they were definitely continuing with a four-day workweek. None were leaning against it or not planning to continue. One business found staff were more focused, engaged and dedicated and could better help the company reach its goals, its chief strategy officer said in a news release, HR Dive reported. Employees liked it, too: 97% said they definitely wanted to continue with a shortened workweek.

While the benefits of switching to a four-day workweek can be substantial, the transition requires careful preparation, the executives of two companies that have successfully done so told HR Dive in January 2022. It’s essential to consider how the policy will be implemented; HR pros can start by studying fruitful initiatives elsewhere, they said.

For employers concerned about preventing a decline in productivity, the key is to prioritize tasks that deliver outcomes that really matter to company success and dump time-wasters, like unnecessary meetings, that don’t, they recommended.

A shortened workweek may not work for every business. In 2022, after a group of California lawmakers sought to officially change the state’s definition of “workweek” from 40 hours per week to 32, some companies expressed concern. Organizations with operations across multiple regions during various times of the day may struggle to provide sufficient customer coverage under a four-day workweek, the chief culture officer of a software company previously explained to HR Dive. It may be more effective to implement more general flexibility policies that allow employees to take time off for appointments and family outings, she said.

The California bill, AB-2932, has since stalled in committee. It would apply to employers with 500 or more employees and require them to pay overtime for hours worked in excess of the 32-hour workweek.