California Overtime Laws
Calculating Overtime in California
In California, generally, any work over 8 hours in a workday, 40 hours in a workweek, and 8 hours on the seventh consecutive day of work in a work week, must be paid at an amount at least 1.5 times the employee’s regular rate of pay.
Here is an example:
Han pays Chewy $30 per hour. Chewy works 9 hours in a day, Chewy is therefore entitled to 8 hours x $30/hour + 1-hour x $45/hour. So, Chewy is entitled to $285 for that day’s work.
Here is another example:
Chewy works 8 hours per day, Monday, through Saturday. Chewy is therefore entitled to 8 hours of overtime for that week because he worked 48 hours in the week.
Additionally, any hours worked over 12 in a workday or 8 on the seventh consecutive day, must be paid at an amount at least 2 times the employee’s regular rate of pay.
Here is an example:
Chewy works for Han. Chewy makes $20 per hour as his regular rate of pay. Chewy works 13 hours in one day. So, Han owes Chewy 8 hours x $20/hour + 4 hours x $30/hour (1.5 times regular rate in excess of 8) + 1-hour x $40/hour (2 times regular rate for hours worked in excess of 12). So, Han owes Chewy $320 for the day.
But employers are not required to combine multiple rates of overtime compensation in order to calculate the amount owed. And, employees are not allowed to “double dip”.
Here is an example:
Chewy works 8 hours Monday through Thursday, and 9 hours on Friday, giving Chewy 41 hours for the week. Chewy is not entitled to an hour of overtime for working more than 8 hours in a day, and another hour of overtime for working more than 40 hours in a week.
Also, absent an agreement to the contrary, employers do not have to pay employees additional money for working holidays, nightshifts, or weekends.
California’s overtime laws even protect non-resident employees, doing work in California.
Exemptions to Overtime Laws
California and federal law have certain exemptions to overtime laws. The exemptions are all for classifications of employees. Typically, “white collar” exemptions include executives, administrative, and professional employees making a salary. Additionally, certain high-level computer professionals, certain commissioned inside sales employees, and outside sales employees, may be exempt from overtime laws. Employees covered by collective bargaining agreements can even be exempt under certain circumstances.
Overtime for California Agricultural Employees
As of 2018, California agricultural employees are entitled to time-and-a-half overtime for:
•More than 10 hours of work in a workday;
•More than 6 days of work in a workweek; and
•The first 8 hours on the seventh consecutive day of work.
Additionally, agricultural employees are entitled to double time for work over 8 hours, on the seventh consecutive day of work.
But that is all changing. Starting January 1, 2019, any person employed in agriculture must receive 1.5 times that employee’s regular rate of pay for all hours worked over 9.5 in a workday, or 55 hours in a workweek. Starting January 1, 2020, any person employed in ag must receive 1.5 times that employee’s regular rate of pay for all hours worked over 9 in a workday, or 50 hours in a workweek. Starting January 1, 2021, any person employed in an agricultural occupation must receive 1.5 times that employee’s regular rate for all hours worked over 8.5 in any day, or 45 in week. Finally, starting January 1, 2022, any person employed in an agriculture must receive 1.5 times that employee’s regular rate of pay for all hours worked over 8 hours in a day, or 40 hours in a week and twice the employee’s regular rate for all hours worked over 12 in a day.
What is a Workday?
A “workday”, under California labor law, is defined as any consecutive 24-hour period beginning at the same time each calendar day. The California Division of Labor Standards Enforcement (DLSE) will treat each work day as starting at midnight and each work week starting at midnight on Sunday, so that Sunday is the first day of the work week and Saturday is the last unless the employer has predesignated the work day and work week. Employers often try tricks like starting an employee’s shift at 4:00 PM, and then ending that shift at Midnight. But, instead of going home, the employee’s next shift starts at midnight and goes to 8 AM. But that is illegal. Employers cannot schedule employees in tricky ways to evade overtime.
Alternate Workweek Schedules
California law permits alternate work week schedules. An alternative workweek schedule, or AWS, is any regularly scheduled workweek, requiring an employee to work more than 8 hours in a 24-hour period. Under the most common example, employers propose that employees work 4 days a week and 10 hours a day. If employees adapt an AWS, employers must pay the employees 1.5 times their regular rate for hours outside their regularly scheduled hours.
How to Determine Regular Rate of Pay for Salaried Employees
For most people, figuring out their regular rate of pay is easy because it’s just their hourly rate. But salaried employees are a little different. Not all salaried employees are exempt from meals and rest periods, and/or overtime. In fact, most salaried employees are “misclassified” as exempt employees, when they are not. To determine a salaried employee’s regular rate of pay, you take the employee’s weekly salary, and then you divide that number by 40 for the hours in the week. So, say
Here is an example:
Uncle Owen’s Sand Farm pays Luke $120,000 per year. To calculate Luke’s hourly rate, you divide $120,000 by 12 (because there are 12 months in a year) leaving you with $10,000. Then, you divide $10,000 by 4.3 (because there are 4.3 weeks in a month according to the DLSE) leaving you with $2,325.58 per week. Then you divide $2,325.58 by 40 (because there are 40 hours in a typical workweek) leaving you with $58.15, as Luke’s hourly rate. Let’s say Luke works 9 hours in a day. Luke should get $58.15 x 8 hours = $465.20, plus $87.23 ($58.12 x 1.5) x 1, for a total of $552.43 for the day.
How to Determine Regular Rate of Pay for Pieceworkers
If an employee is paid piece-rate, the employee’s regular rate is determined by adding together the employee’s total earnings from piece rates and dividing that by the number of hours worked in the work week. If the piece rate employee works double time, the regular rate is owed for the double time hours worked in the work week.
Luke fixes droids for Uncle Owen’s Sand Farm and Droid Repair. Luke gets paid $10 per droid he fixes. Say Luke made $600 for the week and worked 10 hours per day, 5 days per week, for a total of 50 hours, (10 hours of overtime). Luke’s overtime calculation is $600 divided by 50 hours = $12/hour divided by 2 = $6 (half time premium) x 10 overtime hours = $60 (get that? He’s already getting credit for the regular hours worked in the original computation, so you only multiple by a 1/2 time premium).
How to Determine Regular Rate for Commission and Bonus
Commissions and bonuses for employees must always be included in calculating the regular rate. That’s regardless of whether they are the sole source of compensation for the employee or are in addition to the employee’s guaranteed salary or hourly rate. To calculate the regular rate of pay on commissions and/or bonuses, the total commission/bonus earnings are divided by the total hours worked in the commission/bonus period. The employee must be paid an additional ½ of the regular rate for all overtime hours worked in the commission or bonus period. For example, Jabba pays Boba $10 per hour, and Boba earns commissions of $500 during the workweek for all the bounties he brought in. But it took Boba 10 hours of work per day, and it took him 5 days of work per week to bring in all those bounties. So, he had a total of 50 hours of work during the workweek (10 hours of overtime). To calculate Boba’s overtime rate, we must first calculate his overtime on his hourly wages. Here it is 10 hours x $15 = $150. Next, we must calculate the overtime on the commission/bonus. Here it is $500 divided by 50 hours = $10 per hour. Then we divide that by 2 = $5 (half-time premium). Then we multiply that by 10 overtime hours, which equals $50. So, Boba’s total earnings for the week are $1,100 ($400 + $150 + $500 + $50). It is pretty like the calculation for piece-rate employees.
If you have a question about California overtime laws, you should contact an experienced overtime lawyer.
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