The state of California follows federal overtime laws, but it also has some overtime rules of its own that are unique. When it comes to overtime pay laws in California, there are a few things that you should know.
Since there are two sources of applicable law (the federal Fair Labor Standards Act and the California Labor Code) a California employer must comply with both. Let’s take a look at the overtime laws as they apply in the state of California.
What is the Definition of Overtime in California?
Overtime in California is defined as any hours that are worked over 8 hours in a day – or 40 hours in a week. This overtime must be paid no later than the payday for the next regular payroll period after the wages were earned.
So, by the usual standard of California overtime law, employees must be paid an overtime rate of 1.5 times their regular rate of pay (time and a half) when:
- They work more than 8 hours in a day.
- They work more than 40 hours in a week.
- They work on the 7th consecutive day in a workweek.
Additionally, employees must be paid 2 times their regular rate of pay (double time) when:
- They work more than 12 hours in a day.
- They work more than 8 hours on the 7th consecutive day in a workweek.
This is the main area where California overtime pay laws are different than federal overtime law: the requirement to pay double time when the employee has worked for more than 12 hours in a day or more than 8 hours on the 7th consecutive day in a workweek. Plus, federal overtime kicks in after 40 hours no matter how they are distributed in the week. California overtime begins on any day that the employee has worked more than 8 hours.
So what about “comp time” workweeks where the employee works 10 hours on a Monday, then works 6 hours on a Tuesday? These types of workweek arrangements are allowed under federal law, but not under California overtime law. According to the state laws, the employee would be eligible for two hours of overtime pay on the Monday. This is the distinction that often gives rise to wage-and-hour litigations in California for violation of state labor laws.
What is a “Workday” and a “Workweek”?
Keep in mind that a workday is a 24-hour period that can start at any point in the day (but should always start at the same time every day). A workday doesn’t have to coincide with the start of the employee’s shift and different workdays can be set for each employee. If the employer fails to define the workweek, the default of Sunday through Saturday will apply, with the workday starting from 12:01 am and lasting until midnight.
Employers can establish a workweek different from this, which may be more suitable for employees who work different shifts. However, once you establish the workdays they cannot be changed unless the change is permanent and not done to avoid overtime payment.
When you have seven consecutive 24 hour periods in a row (168 hours in total) this constitutes a workweek. The workweek can begin at any time on any day – as long as it stays the same week on week. Again, employers are not allowed to change workweeks frequently to avoid overtime payment.
Who Qualifies for Overtime?
In order to receive overtime payments, an employee must be in a non-executive, non-administrative, non-professional role.
What does this mean? Essentially, it means that the employee is directly involved in the production of whatever it is that the company sells to customers. It also means that their pay is quantified against the number of units the company produces and they don’t have the freedom to choose when and how they perform their job.
Also important to note: overtime in California doesn’t need to be authorized. An employer can discipline an employee if they violate the policy of working overtime without authorization, but the overtime must be paid, whether authorized or not.
It also matters how old the employee is. Employees 15 and under are not allowed to work overtime at all. Employees who are 16 and 17 are only allowed to work a maximum of 48 hours per week and overtime must be paid after 40 hours. There are certain restrictions on when teenagers are allowed to work (such as whether they can work on school days) so read this helpful PDF about California Child Labor Laws for more information.
What About Salaried Employees?
There is a myth that salaried employees are not entitled to overtime – but this is not true. Employees who are paid a salary are still entitled to overtime, unless they meet one of the exemptions. Most people don’t qualify for these exemptions, so in many cases overtime still needs to be paid to salaried employees.
Whether an employee is on an annual salary, a daily rate or an hourly rate doesn’t matter – they still qualify for overtime. How is the overtime rate calculated for someone who receives a salary? The annual salary is divided by 52 (weeks in a year) and then by 40 (hours in a workweek).
What About Employees Who Earn Two Different Rates?
If an employee is paid two or more different rates by the same employer during the workweek, the regular rate will be the weighted average of those two rates. This is calculated by taking the full straight time pay for the workweek and dividing it by the number of hours worked. Then, the overtime rate is calculated as 1.5 times that rate.
Who Doesn’t Qualify for Overtime?
There are some types of employees who are not qualified to receive overtime payments under California overtime rules, such as:
- Independent Contractors: A contractor hired independently is not an employee, so is not covered by overtime laws.
- Executives: An employee is an executive if they earn more than twice the minimum wage, run a company or a department of a company, manage more than two employees and have the power to hire and fire employees.
- Administrative Employees: An employee is an administrative employee is they earn more than twice the minimum wage, have a job that doesn’t require manual labor but does require a set of specialized skills and training and if they perform their work on their own schedule with minimal supervision.
- Professional Employees: This includes anyone who earns more than twice minimum wage, has a job in dentistry, medicine, law, architecture, optometry, teaching, engineering, accounting, the arts and science and has the freedom to decide how and when they perform their work.
- Others: There are others who are exempt from California Overtime Law, including actors, student nurses, drivers and some journalists.
It is important to note that it is the nature of the job that determines whether or not an employee is entitled to overtime – not the field of work or the employment status.
Out of approximately 120 million American workers – nearly 50 million did not qualify to receive overtime.
What About Days Off?
What does the law on overtime say about an employee who takes a day off during a workweek, such as a vacation day or a sick day? Do those hours count towards the overtime calculation?
The answer is no. The hours in the day off do not count – employees only receive overtime payment when they have worked more than 40 hours in a workweek. California overtime laws are different than federal laws – so it is important to comply to both when paying employees.
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