Where Labor Law Gets Crunchy—Should my Studio Implement Crunch?

Where Labor Law Gets Crunchy—Should my Studio Implement Crunch?

In early October, CD Projekt Red, arguably the most recent “Cinderella Story” rags-to-riches video game developer since Bioware, announced that they ...

... were implementing a Mandatory Crunch policy in order to meet their deadlines for the hotly anticipated Cyberpunk 2077. This came as a shock to gamers because CD Projekt Red was previously boasting about remediating their reportedly toxic work practices.

So, what is Crunch? Is it legal? Is it wrong? If my studio needs to Crunch, should we be like CDPR and get out in front of it? In this article, we will be giving you a survey into Crunch in its many forms, and what you should have on your radar as indie dev employer or as employee of AAA.

What is Crunch?

Crunch, broadly defined, refers to any period of mandatory or optional overtime work (either by addition of workdays on weekends or extension of hours on existing workdays) implemented in order to meet a deadline which is otherwise unmeetable without Crunch.

Crunch isn’t uniform in its implementation or experience. For the sake of discussion, we are postulating four varieties of Crunch:

  1. Mandatory Crunch: where the managers of a development studio formally implement overtime with full disclosure to employees, and employees are aware of the implementation and additional compensation they will receive.
  2. Optional Crunch: where the managers of a development studio permit its employees the option to work paid overtime, but neither require it nor penalize non-overtime employees for declining. This one is rare, especially when compared to…
  3. Quasi-mandatory Crunch: This, along with Mandatory Crunch, are the most widely reported-on. This occurs where the official policy laid out by a Dev's managers is that overtime is entirely optional, but a corporate culture emerges where employees are intimidated into working overtime for fear of retaliation from their managers should they opt not to work overtime. Functionally, this is the same as “Optional Crunch”, but for a work environment which unfairly pressures an employee into working overtime where they otherwise would not.

Wait, isn’t this a legal blog?

Yes! Let’s talk law. Crunch itself occupies an area of law not typically discussed by our Blog. Most video game law is concerned with various Intellectual Property, as well as more general business law. Crunch is firmly within the context of labor law, which is mostly dictated differently by each city, state, and country. This complicates the discussion—as video game development is frequently an international issue, whether it is a multinational AAA studio or a small team with employees in two different U.S. states.

For this Blog we have to make a pick though – we don’t have time or space for a compendium on labor laws worldwide, and how they affect video game developers’ working hours. For that, we’ll focus on U.S. federal labor laws, as well as New York and California labor laws.

Is Crunch Illegal?

No, Crunch generally does not violate the labor laws of the states surveyed for this article. However, Crunch can be implemented in a way which is illegal, if an employer is not paying attention to its jurisdiction’s labor laws.

Before we go down the rabbit hole of what the labor laws say, you can use the following rule of thumb:

  1. If you have implemented Mandatory Crunch, and you are not paying your employees or are paying only the same amount as they would make during their normal working hours, then your implementation is likely illegal – unless there is an exemption under local state or municipal laws;
  2. If you are implementing a version of Crunch we have mentioned, and are paying your employees for their overtime hours worked according to state and federal guidelines, then you are most likely in the clear;
  3. If you are implementing Optional Crunch, but are retaliating against your non-crunching employees, then your implementation is likely illegal.

What the Law says about how many hours are legal?

The Fair Labor Standards Act (FLSA) is a federal law which lays the framework for overtime, and the rest is meant to be filled in by state legislature—including limitations to the number of overtime hours mandated by employers. In other words: labor practices which fly in New York may not fly in California, or vice-versa.

Under the FLSA, a typical working day lasts 8 hours, and a typical work week lasts five working days. Any work done beyond 8 hours in one day is overtime, and employers are required to pay an employee working overtime 1.5 times their typical hourly wage for all overtime hours worked.

In New York, mandatory overtime (or mandatory crunch) is legal, and common in certain markets. However, regardless of whether overtime is elective or mandatory, New York employers are required to pay employees 1.5 times their normal hourly rate for all hours over 40 per week worked. Failure to pay overtime rates in New York may subject an employer to substantial liability. The New York State Attorney General has demonstrated a history of prosecuting wage theft. Additionally, New York requires that an employer grant their employee at least 24 hours of consecutive rest per week. In sum, while overtime is regulated in New York, these regulations are still rather loose with respect to the wide latitude an employer may have in implementing any of the three varieties of Crunch common in GameDev.

California is a little bit more restrictive than New York, but not by too much. Like in New York, California employers are legally able to mandate overtime hours for their employees, but employees must be paid 1.5 their normal rate for all hours in excess of 8 on a given workday, and double their normal rate for all hours in excess of 12 for a given workday. Note that bump in pay for continuing overtime, but then consider the following: unlike New York, California Labor Law does not require a period of consecutive rest in a given work week, however beginning on the seventh consecutive day of work from an employee, all hours worked are subject to overtime pay in the amount of 1.5 the normal rate of compensation. This approach both permits more crunch than New York, but disincentivizes an employer to mandate unreasonable amounts of Crunch. Further, California’s approach guarantees an employee more pay if an employer deems extensive Crunch necessary.

And what about retaliation?

Both New York and California prohibit employer retaliation provided the retaliation occurred as a result of a lawful exercise of the employee’s rights. Retaliation can take the form of dismissal, involuntary reduction of workable hours, withheld pay or benefits, overly critical supervision, or abusive verbal conduct. Employers may not engage in this behavior as a result of an otherwise permissible action by an employee, such as issuing a complaint, notifying an employee of a labor code violation, or opting not to work non-mandatory overtime hours.

What do I take away from this as indie dev employer or AAA employee?

The following recommendations are applicable regardless of the type of Crunch and whether you are a two-person studio, or a multinational AAA developer.

  • Amount of workdays per week: Do not require more than 6 workdays per work week for your employees. (In NY State, doing so would violate the law.)
  • Amount of hours per day: Do not require overtime such that your employees could not reasonably expect 8 hours of sleep.
  • Want to implement or are subject to? Consult legal counsel with respect to your jurisdiction's Labor and Overtime laws, determine who is and is not eligible for overtime pay, and ensure you are properly compensating your employees for their extra work.
  • You have implemented it? Follow the guidelines above and maintain as much transparency as possible with your employees with respect to your Crunch policies while considering giving your employees a voice in creating a Crunch policy should the need for Crunch arise.
  • Are there alternatives? If possible, consider alternatives to Crunch, e.g. delaying a game may throw a wrench in marketing and timing of runway but could also go a long way in ensuring employee health and a quality product.

A Final Word: Is Crunch Bad?

Well, that’s a tough question to answer. Is it good? Most industry experts and lawyers agree: No. Is it bad? Not in a vacuum. That said, many instances of Crunch are likely to be found to be unreasonable, and we should all aspire to be reasonable employers. Unreasonable employer practices can lead to lawsuits and, depending on the industry, strikes and collective bargaining (but the state and future of GameDev unions are another article). The key is in the implementation.

On the “not bad” side of things, consider how scale may affect a project. An indie dev may believe in their project with their heart and soul and would be willing to work more hours than the average in order to meet their deadlines. Famously, Eric Barone, the sole developer of Stardew Valley, developed his game while working a separate full-time job. However, even independent developers are likely to find Crunch not quite so romantic if their health is on the line.

But an independent developer often has more latitude in deciding their release window and development runway. AAA studios like Ubisoft or Rockstar manage much bigger entities and are often at the mercy of choices made by those not directly involved in development. As a result, AAA employees rarely have a say in the hours they are expected (or required) to work, which is part of why AAA studios tend to come under the most fire for Crunch.

If you plan to implement Crunch of any kind, consider the decision with the weight it deserves. Listen to your colleagues, your lawyer and, most importantly, your employees.

Author: Edward Baxter and Daniel Koburger

First Published: 12.3.2020

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Roche Legal, PLLC


Alexandre Leturgez-Coïaniz, Esq., LL.M.

Daniel B. Koburger, Esq., LL.M.

Côme Laffay, Esq., LL.M.