Top Four Overtime Laws To Know In California
03 Jan 2018
California Overtime laws were historically implemented to put financial pressure on employers to hire additional staff and to protect employees in weak bargaining positions from being overworked. The idea was to dis-incentivize employers by making it costly to task employees with unreasonably long work hours, and instead encourage employers to split the workload among new hires.
Unfortunately, employers frequently ignore these laws and capitalize on what they perceive as the ignorance of their employees. Here are four important overtime rights (and a detailed guide) that will help you determine whether your employer has illegally denied you overtime pay:
Table of Contents:
1. Time-and-a-half For Work In Excess of 40 Hours In A Week
The most basic rule that workers should understand is that pursuant to both the Federal Fair Labor Standards Act (FLSA) and California Labor Law (subject to some exemptions), all work performed in excess of 40 hours in one workweek is considered overtime and must be paid at one and a half times (1.5X) the employee’s regular rate of pay.
Example: Steve’s regular rate of pay is $15 an hour. He works 50 hours in a week. Steve should be paid $22.50 for any work he performs over 40 hours in a week because the statute provides that overtime is defined as one and a half times (1.5x) the worker’s regular rate of pay ($15/hr). He is therefore owed $600 in regular pay (40 hours x $15) and $225 in overtime pay (10 hours x $22.5).
2. Time-and-a-half For Work In excess Of 8 Hours In One Day
The California Labor Code provides multiple ways for workers to earn overtime. In addition to the 40 hour rule discussed above, workers who work more than eight hours in a workday must be paid at the rate of one and one-half times (1.5X) their regular rate of pay. This law is spelled out in Labor Code § 510 and the Wage Orders.
Example: Donald’s regular rate of pay is $25 an hour. He works 11 hours in a single day. He should be paid $37.50 an hour (1.5 x $25) for any work he performs in excess of eight hours in a day. Donald is therefore owed $200 in regular pay (8 hours x $25), and $112.50 in overtime pay (3 hours x $37.50).
3. Double Pay For Work In Excess Of 12 Hours In One Day
Most workers are familiar with the 40-hour rule for overtime, but few are aware of the double overtime rule. This allows the opportunity for employees to earn even more overtime pay. More specifically, this law (part of Labor Code § 510) provides that an employer must pay an employee double (2X) his/her regular rate of pay for all work performed in excess of 12 hours in a single workday.
Example: Sara’s regular rate of pay is $17 an hour. She works 14 hours in a single workday. She must be paid $25.50 an hour (1.5 x $17) for any work performed in excess of 8 hours up to 12 hours (see #2 above providing one and a half times (1.5x) regular rate of pay for work performed in excess of 8 hours in one day).
She must also be paid $34 or double (2x) her regular rate of pay for any work performed in excess of 12 hours. Sara is therefore owed $112 in regular pay (8 hours x $17). She is additionally owed $102.00 (4 hours x $25.50) in 1.5x overtime pay. Finally, she is owed $170.00 in double overtime (5 x $34). She is owed a total sum of $384 in wages for the day.
4. Overtime Pay For 7 Consecutive Days Of Work
Except for certain situations, California labor statutes require that employees be provided at least one day’s rest in seven (see Labor Code §551–552). Furthermore, California law provides that in the event an employee does work 7 consecutive days in a row, he or she must be paid overtime for the entire day of work.
To be more precise, Labor Code section 510 states that an employee must be paid at a rate of one and one-half times (1.5X) the employee’s regular rate of pay for the first eight hours of work performed on the seventh consecutive day of work in a week.
Additionally, the law provides that an employee must be paid twice (2X) his or her regular rate of pay for any work performed in excess of 8 hours on the seventh consecutive day of work. As the example below shows, there is ample opportunity for employees who are overworked to make substantially more than the regular hourly rate would provide for.
Example: Rodger’s regular rate of pay is $16/per hour. He works seven consecutive days in a workweek (Monday-Sunday). On the seventh consecutive day in a row (Sunday) he works a total of 13 hours. Rodger must be paid $24/hr (1.5 x $16) for work performed in the first eight hours and $32/hr (2 x $16) for work performed in excess of 8 hours. He is therefore owed $192 (8 hours x $24) in 1.5x overtime pay, and $160 (5 x $32) in 2x overtime. He is therefore owed $352 total for the day.
The FLSA Definition Of Overtime
Although there is overlap, the federal definition of overtime is much narrower and therefore provides less protection than its California counterpart discussed above. More specifically, it states that work performed by a nonexempt employee in excess of 40 hours in one workweek must be paid at one and one-half times (1.5X) the employee’s regular rate of pay (the same as California). The FLSA does not allow: daily accrual, any premiums at double the regular rate of pay, or accrual on the seventh consecutive day of work.
Am I Exempt From Receiving Overtime?
Although not all employees are entitled to overtime, many workers are under the misconception that just because they are salaried they are not entitled to overtime. This is simply not true. There is no hard and fast rule that categorically exempts salaried employees from receiving premium pay. Instead, a series of tests should be applied on a case by case basis to determine if a person is truly exempt. Below is a list of workers that are exempt.
Executive, Administrative, and Professional Employees
Pursuant to the IWC Wage Orders and Labor Code section 510 & 511, executive, administrative, and professional workers are exempt from overtime if:
1.) They are paid a monthly salary equivalent to no less than twice California’s minimum wage for full time employment;
2.) The nature of their work is executive, administrative, or professional;
3.) They have primary duties that involves that type of exempt work; and
4.) They discharge those primary duties by regularly exercising independent judgment and discretion.
It is important to note that the status of an employee’s exemption is determined by that person’s salary and duties, not by fancy titles or job descriptions. Further, it is also not determined by an agreement between the employer and the employee that characterizes the employee as exempt.
Computer Programmer Exemption
The exemption also applies to employees in the computer software industry who are primarily engaged in intellectual or creative work that requires the exercise of discretion and independent judgment. (Lab C §515.5.)
For the exemption to apply, the computer professional must be primarily engaged in one of the following duties (Lab C §515.5(a)(2)):
• The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software, or system functional specifications;
• The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; or
• The documentation, testing, creation, or modification of computer programs related to the design of software or hardware for computer operating systems.
In addition, the employee’s hourly wage must be no less than $45.41 ($94,603.25) for full time employment, and the computer professional is required to be highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming, or software engineering. For more information, check out our guide for computer service industry workers.
Outsides salespersons are also exempt from overtime. These are people who are eighteen years old or older who customarily and regularly spend more than 50% of their working time away from the employer’s place of business selling tangible or intangible goods or obtaining orders, contracts for products, services, or use of facilities. An example of an outside Salesperson is someone who goes door to door selling solar panels. (Wage Order Nos. 1–2001—16–2001; §1 (8 Cal Code Regs §§11010–11160, §1).)
Commissioned Sales Employees
Certain commissioned sales persons are also exempt when (1) their earnings exceed one and one half times the California minimum wage ($16.50 in 208), (2) more than half of their compensation is derived from commissions on sales of goods and services, and (3) the person works in the mercantile industry (See IWC Wage Order 7-2001) or works in a professional, technical, clerical, mechanical or similar occupation. (See IWC Wage Order 4-2001).
Nurses have been in demand in the United States in the past ten years, and schools have been pumping out a steady stream of prospects for hospitals, and clinics. But are nurses exempt? Well, the answer simply is that it depends. By statute, registered nurses are not considered employees that are professionally exempt from overtime, but they can be considered exempt if they individually meet the criteria that have been set for executive or administrative employees. Certified nurse anesthetists, certified nurse midwives, and certified nurse practitioners who are engaged in performing the duties for which they are certified for can be classified as professionally exempt. They can also be classified as exempt from overtime requirements if they meet the criteria for administrative or executive employees. (Lab C §515(f)(2)). Determining if a nurse if an exempt can be tricky and therefore it always makes sense to talk to a lawyer.
Caregivers and Domestic Workers
California’s caregiver overtime laws can be somewhat confusing, requiring a closer look. Under the Domestic Worker Bill of Rights which was passed by California’s state legislature in 2014 (California Labor Code sections 1450 through 1454, domestic work is defined as “means services related to the care of persons in private households or maintenance of private households or their premises.”
Who is a Domestic Worker?
The bill goes on to define domestic workers or “domestic work employees” as “[d]omestic work occupations [that] include childcare providers, caregivers of people with disabilities, sick, convalescing, or elderly persons, house cleaners, housekeepers, maids, and other household occupations.” Domestic work under Labor Code section 1451 does not include “care of persons in facilities providing board or lodging in addition to medical, nursing, convalescent, aged, or child care, including, but not limited to, residential care facilities for the elderly.”
Who is not a Domestic Worker?
For purposes of the bill, domestic workers do not include:
- Anyone performing services through California’s In-Home Supportive Services program;
- Individuals who are parents, grandparents, spouses, siblings, children, or legally adopted children of the employer they work for;
- It also does not include babysitters who are under the age of eighteen who babysit a minor in the employer’s own home, nor does it include casual babysitters for minor’s who work in the employer’s residence;
- Workers who are employed by a licensed health facility;
- Any person who is employed pursuant to a voucher issued through a regional center or who is employed by, or contracts with, an organization endorsed or contracted through a regional center or the State Department of Developmental Services to provide services and support for persons with developmental disabilities;
- Any person who is providing child care and is exempt from the licensing requirements, if the parent or guardian of the child to whom child care is provided receives child care and development services pursuant to any program authorized under the Child Care and Development Services Act, or the California Work Opportunity and Responsibility to Kids Act.
Who is a Personal Attendant?
Personal attendants have a different set of rules that apply to them with respect to overtime (discussed in further detail below). Under Labor Code section 1451, a “personal attendant” is any person employed by a private household or by a third party recognized in the healthcare industry to work in private households who supervises, feeds or dresses a minor, or a person who by reason of advanced age, physical disability, or mental deficiency needs supervision. If an individual spends more than 20% of his or her time doing work other than the aforementioned work they are not a personal attendant, although they may still be a domestic worker. IWC Wage Order 15-2001 relating to Household Occupations includes babysitters in its definition of a personal attendant.
Overtime for Domestic Workers (Not Personal Attendants)
The Domestic Worker bill of rights only addresses the law for domestic workers who are personal attendants. IWC Wage Order 15-2001 provides the overtime rules for domestic workers who are not personal attendants. Two different rules may be in play. The rule that applies depends on whether or not the person is a live-in domestic worker or non-live-in. None-live-in domestic workers must be paid one and a half times (1.5X) their regular rate of pay for hours worked in excess of eight (8) in one workday, more than forty (40) hours in a workweek, or the first eight hours (8) hours worked on the seventh consecutive day of the work week. These workers must also be paid double (2X) their regular rate of pay for work performed in excess of twelve (12) hours in one work day, or more than eight (8) hours on the seventh consecutive day of work in a workweek. This rule is no different than what generally applies to most other non-exempt employees. Live-in domestic workers, meanwhile, have different rules. They are entitled to overtime at a rate of one and a half times (1.5X) their regular rate of pay for work performed over nine hours in one workday. They are entitled to double their regular rate of pay (2X) for work performed in excess of nine hours on the sixth (6th) and seventh (7th) consecutive days in a workweek.
Overtime for Personal Attendants
Personal attendants earn overtime at a rate of one and a half times (1.5X) their regular rate of pay for work performed in excess of nine (9) hours in one workday, or forty-five (45) hours in one workweek.
What If I Am Part Of A Union?
The rules above do not apply to workers that are covered by a collective bargaining agreement (CBA) that already provides for:
• Premium rates for all overtime worked; and
• The wages, hours of work, and working conditions of the union workers;
• A regular hourly rate of pay of not less than thirty percent more than the state minimum wage rate.
In such a case, the CBA rule will govern.
Overtime on Weekends or Holidays?
No, you are not entitled to premium compensation solely because you worked on a weekend or a holiday. The court held in Advanced-Tech Sec. Servs., Inc. v Superior Court (2008) 163 CA4th 700 that an employee who already received premium pay at one and one-half times the employee’s regular rate for working on a holiday was not entitled to any additional overtime. The court rejected the employee’s holiday premium rate should be transformed into the employee’s regular rate for purposes of calculating overtime.
Calculating Overtime Owed
Calculating the amount of overtime that your employer has shortchanged you on can be somewhat confusing. The explanations below will focus on California state law to avoid reader confusion and also because generally they provide better protections than the FLSA. The formula, however, is pretty simple: Amount of overtime compensation owed=(regular rate of pay) x (applicable rate of overtime i.e. 1.5x or 2x) x (number of overtime hours worked).
Determining Your Regular Rate Of Pay
The regular rate of pay is an employee’s hourly rate. It includes all remunerations paid to an employee, except matters specifically excluded. If bonuses are provided in addition to the hourly rate, those bonuses must be divided by the number of hours worked in the week and added to the hourly rate so that the regular rate can be determined.
Example: Steve gets paid $15 an hour as a clerk a grocery store. He gets a $100 performance bonus for the work he performed during a particular week. That specific week he worked 40 hours. Therefore, Steve’s regular rate of pay is: $100/40 hours=$2.5 per hour. $15+$2.5=$17.5 per hour.
Calculating the regular rate for salaried nonexempt employees is much more complex. It is determined by dividing the weekly salary of an employee by the number hours the salary was intended to cover (up to maximum 40 hours).
Example: Christina gets an annual salary of $60,000 a year. To calculate her regular rate, first you take her total annual salary and divide it by the total number of weeks in a year (hint there are 52 weeks in a year.) $60,000/52 weeks=$1,153.85 salary per week. Then you divide that number by the agreed upon number of hours your salary is intended to compensate you per week (not to exceed 40 hours). Here, Christina typically works 50 hours a week, so we can assume the agreed upon number of hours per week is 40. So $1,153.85/40 hours= $28.85 regular rate per hour.
Calculating the regular rate for work performed by a pieceworker is relative simple. Working on a Piece-rate basis means that the employee is paid a fixed amount for each unit produced or outcome performed regardless of the actual time. Here the regular rate is calculated by taking the total sum of all earnings in a week and dividing it by the number hours of work performed.
Definition of Workweek & Workday
California state law and Federal law provide that nonexempt employees are entitled to overtime pay for work performed in excess of 40 hours in one “workweek.” But what exactly is the definition of a “workweek?” Usually the law will defer to the employer, but if an employer has not predesignated the workweek, the Department of Labor Standards Enforcement treats workweeks as beginning at midnight on Sunday and ending on Saturday. (Lab C §500(b); 2002 DLSE Enforcement Policies and Interpretation Manual.)
“Workday” is defined by by California Labor Code section 500(b) as any consecutive 24-hour period commencing at the same time each calendar day.
Determining Hours Worked
Just because an employee was not scheduled to work doesn’t mean he or she didn’t actually work for purposes of computing overtime hours. The IWC wage orders define “hours worked” as “the time during which an employee is subject to the control of the employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.” (8 Cal.C.Regs. § 11010 et seq.)
Off The Clock Work
Employers must compensate employees for “off the clock” work, if the employer knew or should have known that employees were working those hours. “Off the clock work” is defined as time worked before punching in or punching out on a time card.
Additional Examples of Overtime Calculations
Example 1 – (Computed Daily): Sally’s regular rate of pay is $10 an hour. She works 9 hours in one day. She is owed one hour of overtime at $15. (1 hour) x (1.5 x $10) = $15
Example 2 – (Computed Weekly): Mike’s regular rate of pay is $12 an hour. He works 8 hours a day for six consecutive days during the work week. He is owed eight hours of overtime at $18 an hour or $144.00. (8 hours) x (1.5x$12) = $144.00.
Example 3 – (Seventh Day Premium): Robert works 7 consecutive days in one workweek and his regular rate of pay is $14 an hour. His employer uses a Mon-Sun workweek. He works 5 hours a day Monday through Saturday, then works 10 hours on Sunday. Although he only worked a total of 40 hours during the entire week he is owed overtime. He is one and one-half times his regular rate of pay for the first eight hours of work her performed on Sunday, and double his regular rate of pay for the final 2 hours of work on that same day. He is therefore should have been paid $15 per hour x 1.5= $22.50. $22.50 x 8=$180 for the first eight hours of worked on Sunday, and $15 per hour x 2= $30.00. $30.00 x 2= $60 for the last 2 hours worked on that same day. Therefore, he is owed a total of $240 for all the work he performed on Sunday (his seventh consecutive day of work.)
Example 4 – (Pieceworkers): Jody builds widgets and gets paid a fixed sum per widget built. In one particular week she earns $700. She worked five days, ten hours per day for a total of 50 hours. This is how her premiums should be calculated: $700 ÷ 50 hours = $14 ÷ 2 = $7 (half time premium) x 10 hours of overtime = $70. Therefore, her total earnings for the particular week are $770 ($700 + $70).
Compensatory Time Off In Place Of Overtime
California has an interesting rule that might prevent some employee’s from accruing overtime in certain special circumstances. Under California Labor Code section 513, if an employer grants an employee’s written request to make up that is or would be lost as a result of the individuals “personal obligations,” the employee can make up the time and no overtime will be charged against the employer on account of the makeup time so long as (1.) the employee provides a signed written request each time he or she wants to make up missed time; (2.) the makeup work is performed in the same workweek in which the work time was originally lost; (3.) the employee does not work more than 11 hours in one workday or 40 hours in one workweek. In such a scenario, the employee benefits by not losing pay for the week or having to use vacation time benefits, and meanwhile the employer benefits by not having to pay any extra overtime for allowing the employee to make up the time. As mentioned above, the three requirements of the code section must be followed closely, for example, if the employee makes up the work in a different workweek than the week the time was taken off then all bets are off and the employee must be paid overtime at the applicable premium rate. Also, the employer cannot credit daily overtime hours worked before a request has been made as make-up time.
Remedies For Violations
Remedies can differ based on whether you bring your claims under the FLSA or California State laws. For example, under 29 USC § 216(b) of the FLSA, an employee who brings an overtime civil lawsuit and provides proper proof, can recover back pay, attorney fees, injunctive relief, and an equal amount of back pay as liquidated damages (double damages). These liquidated damages must be awarded unless the employer proves that it had been acting in good faith and had reasonable belief that its conduct in denying overtime did not violate the FLSA. The court may award a lesser amount in liquidated damages.
Despite the fact that California law provides a broader definition of overtime and additional protections, it does not provide liquidated damages. Instead, Labor Code section 1194 provides back pay, interest, attorney fees and costs of suit. In order to maximize recovery, potential litigants should calculate damages pursuant to the FLSA and the California statutes prior to making a decision on which law they will proceed under.
Can I Request My Payroll Records?
What few aggrieved workers know is that they can actually request their payroll records from their employer. These records will in turn help them calculate the backpay and provide the necessary evidence they need to prove their claim.
Pursuant to California Labor Code section 226 an employer must keep records of wage statements regarding their employees’ hours worked and wages paid, and must upon reasonable oral or written request from a particular current/former employee allow him or her to inspect or copy the records. The employer must comply with the request as soon as practicable, but no later than 21 days after the request.
Under the code, if an employer does not comply, the current/former employee is entitled to a $750 penalty from the employer. If you believe that your employer has unlawfully engaged in wage theft, please give us a call for a free legal consultation with an employment attorney and we will make a request to inspect your employer’s records on your behalf. Alternatively, you can request your records directly from your human resources department.
Statute of Limitations
The statute of limitations governing unpaid wages is three years. (CCP §338). Claims for unpaid wages in some cases can also be recovered under California’s Unfair Competition Law (UCL) which provides 4 years. (Bus & P C §17208; Cortez v Purolator Air Filtration Prods. Co. (2000) 23 C4th 163, 173).