Top Four Overtime Laws To Know In California
12 Feb 2017
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 overwork. The idea was to disincentivize 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 ignore these laws frequently, and capitalize on what they perceive as the ignorance of their employees. Here are four important overtime rights that will help you determine whether your employer has illegally denied you overtime pay:
1. Overtime pays at time-and-a-half of an employee’s regular rate of pay for work performed 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 and California Labor Law 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 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 workers 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. The overtime statutes provide for time-and-a-half regular rate of pay for work performed 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 one and a half times 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. Employers must pay double the regular rate of pay as overtime for work performed 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 statute provides a significant opportunity for employees to earn overtime pay. More specifically, the statute found within labor code § 510 provides that an employer must pay an employee double 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 2x overtime (5 x $34). She is owed a total sum of $384 in wage for the day.
4. Overtime must be paid to employees when they work 7 consecutive days
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 compensation for employees who are overworked an opportunity to make substantially more than the regular hourly rate would provide for.
Example: Roger’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. He 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.