What California Employers Need to Know About Overtime for Employees

California labor laws are designed to protect employees from having to work too many hours without fair compensation for their time. These laws apply at the daily and weekly level.

 

Here is a summary of what California law requires when it comes to overtime pay.

 

Daily and Weekly Overtime in California

Nonexempt employees in California who work more than 8 hours in a day are entitled to 1.5 times their regular rate of pay for every hour worked beyond 8. (The regular rate of pay is the compensation that employees normally earn for the work they perform, plus certain additional sums, such as nondiscretionary bonuses.) There is a special rule if employees work more than 12 hours in a workday: they are entitled to 2 times their regular rate of pay for every hour worked beyond 8.

 

For example, if an employee works 10 hours on one day in a week, the employee will be entitled to 2 hours of overtime. If instead, an employee works 5 hours a day on six days of the week, and then 10 hours on the seventh day, the employee would be entitled to 8 hours of overtime paid at 1.5 times their regular rate AND 2 hours of overtime at 2 times their regular rate.

 

If nonexempt employees work more than 40 hours in a week, they are entitled to 1.5 times their regular rate of pay for every hour worked beyond 40. If they work seven consecutive days in a week, they are entitled to 2 times their regular rate for all hours worked in excess of 8 on that day.

 

So, if an employee works 54 hours in a week, the employee is entitled to 14 hours of overtime paid at 1.5 times their regular rate.

 

Nonexempt employees may either be hourly or salaried. However, employers should note that many salaried workers, such as those classified as executive, administrative, and professional employees, are not entitled to overtime. An hourly employee’s regular rate of pay is calculated as including the hourly rate plus any shift differential (work outside of normal business hours). A salaried employee’s regular rate is calculated as follows: multiply the employee’s monthly compensation by 12 (the number of months to get the yearly salary), then divide that salary by 52 (the number of weeks to get the weekly salary), and, finally, divide that sum by 40 hours.

 

Special rules apply for employees who are paid a piece rate (per unit) or those who receive a commission.

 

A final caution: Any employee who works overtime without the employer’s permission must still be compensated appropriately for those hours worked.

 

Employer Responsibilities and Penalties for Violating California’s Overtime Laws

Employers must pay overtime wages no later than the next payday after they are earned; regular wages must still be paid on time. If an employer fails to do so, an employee can file a wage claim with the California Division of Labor Standards Enforcement or file a lawsuit.

 

California employers that fail to pay overtime may owe interest on unpaid amounts as well as the employee’s fees and costs associated with filing a claim.

 

Where to Get More Information About California Labor Laws

For further information about employer obligations under California labor laws, including displaying posters regarding overtime, other wage and hour laws, and additional employment-related laws, check out our webpage dedicated to California labor law posting requirements.