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Home » Blog » Everything You Need to Know About California’s Overtime Laws

Everything You Need to Know About California’s Overtime Laws

Posted on June 18, 2018 | By Omid Nosrati | Discrimination,Retaliation,Wage & Hour Laws

Overtime laws exist to provide due compensation to employees who work additional hours beyond the expected work day and work week. California law prohibits employers from requiring employees to work more than eight hours a workday and more than forty hours in a work week without compensation. Employees may not waive this right, and employers must pay it.

Overtime Rates

The overtime rate is one-and-a-half times the employee’s regular rate of pay for hours more than eight per day or forty per week. For hours worked more than twelve in one day and more than eight on the seventh consecutive day of work in a workweek, the rate is double the employee’s regular rate of pay.

Numerous exceptions and exemptions to overtime rates apply to certain classes of employees. For these employees, California law has different overtime laws.

Determining Regular Rate of Pay

Overtime pay is based on an employee’s regular rate of pay, which includes hourly, salary, piecework, and commission earnings. No matter the classification of earnings, the rate of pay must not fall below minimum wage.

  • For hourly employees, the regular rate of pay is their hourly rate.
  • For salaried employees, regular rate of pay is the amount of yearly salary divided by 52 weeks, then by the legal maximum 40 hours per week.
  • For piece and commission employees, the regular rate of pay can be determined for overtime by A) Using the piece or commission rate as the regular rate, or B) Dividing total earnings for the workweek by number of hours worked.
  • Group rates can apply to piece workers, determining the rate of pay by the number of pieces divided among the group members.
  • For employees paid two or more rates by the same employer within one workweek, the regular rate of pay can be determined by dividing the amount of earnings for the week by total hours worked.

Some employees work on alternate workweek schedules, such as four ten-hour days or three twelve-hour days. For these employees, overtime rates can be determined on the basis of forty hours per workweek.

Unauthorized Overtime

If an employee works overtime without their employer’s approval, the employer is still legally obligated to pay the overtime rate by California law. However, the employer may discipline the employee for violating the overtime policy.

Inclusion of Bonuses

Nondiscretionary bonuses, such as those based on hours worked, production, or proficiency, are part of calculating regular rate of pay for purposes of overtime. Discretionary bonuses, such as holiday bonuses, do not apply when calculating regular rate of pay.

Exemptions

Regular rate of pay excludes certain types of payments, such as:

  • Discretionary bonuses
  • Expense reimbursements
  • Failure of the employer to provide sufficient work
  • Gifts for special occasions
  • Illness
  • Premium pay for weekends and holidays
  • Vacation pay

Such payments are not part of determining regular rate of pay and cannot influence determining overtime.

Salary Employees

Employers must pay salaried employees overtime unless they meet state qualifications for exemption or a provision by the Industrial Welfare Wage Orders exempts them from overtime.

Required Overtime

An employer may require an employee to work overtime. In most circumstances, the employer may discipline employees for refusing to work scheduled overtime.

Overtime Payments

Employers must administer overtime payments within the same pay period the employee worked overtime hours.

If an employer does not provide overtime payments, an employee may file a wage claim or lawsuit to recover lost wages, even if the employee no longer works for the employer. A wage claim will first go to conference with the involved parties. If there is no resolution at conference, the claim will either move to court or reach dismissal due to lack of evidence. Either the employer or employee may appeal the court decision.

If an employer does not pay or appeal the court decision, then the Division of Labor Standards Enforcement can enter judgement against the employer.

Employees may also file a discrimination/retaliation complaint if an employer discriminates or retaliates against the employee for filing a wage claim for unpaid overtime.

Nosratilaw, A Professional Law Corporation has over 20 years of combined experience in advocating for employee rights and advocates for the rights employees seeking compensation for unpaid overtime or cases of unlawful discrimination or retaliation.

 

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About the Author
Omid Nosrati

Mr. Nosrati been selected as one of the Top 100 Labor and Employment lawyers in the State of California for 2016, 2017, and 2018 by The American Society of Legal Advocates (ASLA). He has a “Superb” (10 out of 10) rating on Avvo and a 4.9 out of 5.0 Peer Rating from other lawyers on Martindale Hubbell. Omid Nosrati is also a member of the respected California Employment Lawyers Association, Los Angeles County Bar Association, and Santa Monica Bar Association. He is a firm believer in education, loves to read about technology trends in the legal field and leverages his firm’s technological strengths to benefit each of his firm’s clients.