Overtime Pay Laws in California
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What Are the Overtime Pay Laws in California?
California enforces comparatively strict laws on overtime pay. In California, the general laws are that any nonexempt employee age of 18 years or older or any minor employee 16-17 years of age shall not be employed to work more than 8 hours in any work day or more than 40 hours in a work week unless he or she receives time and half of his or her regular pay as overtime pay.
Eight hours of labor constitutes a day's work. Employment beyond eight hours in any workday or more than six days in any workweek is permissible provided the employee is compensated for the overtime at:
- One and one-half times the employee's regular rate of pay if the employee works more than 8 hours but less than 13 hours. The employee is also owed one and one-half times the regulate rate of pay if the employee works 8 hours on the seventh consecutive day of work.
- Double the employee's regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of 8 hours on the seventh consecutive day of work in a workweek.
What Are the Overtime Pay Laws in California for Salary Employees?
One of the biggest myths about overtime is that people who are paid salary are not entitled to overtime. If an employee is not paid by the hour and is paid salary, the following formula determines what overtime pay that the employee shall receive:
- Multiply the monthly remuneration by 12 (months) to get the annual salary.
- Divide the annual salary by 52 (weeks) to get the weekly salary.
- Divide the weekly salary by the number of legal maximum regular hours (40) to get the regular hourly rate
What Does Regular Rate of Pay Mean Under the Overtime Pay Laws in California?
The employer has to first determine the hours that the employee must be paid for overtime and decide whether they should pay time and half for those hours worked as overtime. The employee must then determine the regular rate of pay that the employee must be paid.
When calculating overtime pay in California, you must use the employee’s regular rate of pay and not the normal hourly pay that the employee gets. The regular rate of pay is the rate the employee would receive after all the types of compensation are considered. The regular rate of pay must include all forms of pay received by that employee. The regular rate of pay must include hourly compensation, piecework earnings, and commission payments
What Are the Pros and Cons of Overtime Pay in California?
To assess the positive and the negative aspect of California’s overtime laws, we'll adapt an employee perspective. Let's start with the "good" part, keeping in mind employee's point of view.
1) The Good Elements
- Compensation for Unauthorized Overtime – Even without appropriate authorization from the employer, an employee working unauthorized overtime has to get overtime pay for work. When employer requires authorization for overtime work, an employee lacking such authorization can be punished. But the employer will still be required to pay for the overtime.
- Inclusion of Bonuses in Overtime Calculation – Overtime pay calculations should include not only the regular wage but also non-discretionary bonuses and commissions. It may also include other payouts that are contingent on an employee's productivity and work hours.
- No Waiver in California – Under California laws, overtime pay cannot be waived by an employee willing to work for less. Therefore, whatever employment contract is signed and despite any oral or written assurances to the contrary, the overtime must be paid for by the employer.
2) The Bad: Exemptions, Exceptions, Exclusions...
- Exemptions and Exceptions – California law provides for various exemptions and exceptions to the overtime laws. An exempt employee is a non-covered employee, meaning that overtime laws do not apply to them. Further, under various exceptions, employees may get less overtime pay depending on their classification.
- Certain Payments Excluded from the Overtime – Certain payouts, such as discretionary bonuses, some reimbursements, paid vacation and sick leave, are excluded from the regular pay for purposes of overtime pay calculation.
3) The Ugly: Finally Some Good News for California Employers
- Requiring Overtime – Under California laws, an employer may require an employee to work overtime. And, if an employee refuses to work the required work schedule that includes overtime, he may be fired by his employer.
- Exception to Unauthorized Overtime – Even though an employee can get compensated for unauthorized overtime, his overtime work must be the type of work an employer should reasonably know about. In another words, an employee who deliberately conceals overtime work from his employer to get more overtime pay will not get the benefits from his trickery.
Why Seek an Attorney's Help?
Many situations may cause you to seek advice of a qualified employment attorney. For example, often your employer may misclassify you as an "exempt" (i.e., non-covered) employee in order to avoid paying overtime. Further, your employer may retaliate or discriminate against you for filing a wage claim with Division of Labor Standards Enforcement (i.e., a division of California Department of Industrial Relations). If you didn't get your overtime pay, an employment attorney may assess whether laws have been violated.
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Last Modified: 02-18-2016 12:59 PM PST
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