California Overtime Law: What You Need to Know

The state of California has some of the most employee-friendly overtime laws in the United States. California Labor Code §510 provides that employees are entitled to receive overtime pay for any hours worked beyond the standard workweek based on a multiple of their regular hourly rate. All employers must comply with the state’s overtime laws, or they may have to pay employees not only overtime pay they may also have to pay employees steep penalties and face other legal action from their employees.

Basics of Overtime Law

California Labor Code §510(a) states that employees who work more than eight hours in a day or 40 hours in a week are entitled to receive overtime pay. Overtime pay is calculated as one and a half times the employee’s regular rate of pay for all hours worked over eight hours in a day or 40 hours in a week. For example, if your regular rate of pay is $20.00 an hour and you worked 1 hour of overtime, you should be paid $30 for the ninth through 11th hours of work. In this case, one and a half times the regular rate of pay is calculated as follows: $20 divided by 2 equals $10. $10 + $20 equals $30.

Not everyone is entitled to overtime pay. Read on to learn about a few exceptions to the overtime law. 

Exempt employees

Exempt employees are employees who are not covered by the overtime law. 

Some employees may receive a salary because of the nature of their job. These employees are exempt from California’s overtime laws and many of the other protections under California’s Labor Code.

Employees classified as exempt are usually (but not always) people employed as managers or supervisors. Other examples of exempt employees are people employed as professionals like doctors and lawyers. 

Employees who work in certain industries. The overtime law does not apply to employees who work in certain industries, such as agriculture, fishing, and transportation.

Employees who work on a piece-rate basis. Employees who are paid on a piece-rate basis are not entitled to overtime pay unless they work more than 8 hours in a day or 40 hours in a week.

In order to be classified as exempt, an employee must meet certain criteria, such as being paid a salary and performing certain job duties. 

In California, all employees are presumed to be non-exempt and if there is a conflict, the employer has to prove the employee is properly classified as exempt.

Some employers try to avoid paying their employees overtime and provide other legal protections to their employees by misclassifying them as exempt employees. But doing so can result in legal action and expensive penalties that could be paid to the employee and/or the State of California.

Overtime Pay When Working 7 Consecutive Days in a Workweek

Under California Labor Code sections 551 and 552, generally, employers can’t require their employees to work more than six days a week. Employees are entitled to one day of rest out of seven.

California Labor Code Section 510 is a blessing for those who work hard and long for consecutive days. This law ensures that these employees have one day of rest in the same workweek. 

Employees who work on the seventh consecutive day of their workweek must be paid one and a half times their normal rate for the first eight hours of that day. If the worker works more than eight hours on the seventh day, they are entitled to double pay.

As the court explained in Mendoza v. Nordstrom 2Cal.5th, 1074 (2017), that required day of rest has to come every calendar week, not every 7 days. This means that an employee could work up to 12 days in a row without triggering the protections under California Labor Code Section 510.

California Labor Code Section 554 provides specific exceptions to the general rule requiring a day of rest. Some of the employees that the law does not apply to are:

• Employees who are needed for an emergency.
• Employees who work in jobs that protect life or property from destruction.
• Employees of common carriers (e.g., taxi, trucking, rail, etc.).
• Employees who are in a union and their collective bargaining agreement changes the terms of their work schedule
• Employees who work with trains; or
• Part-time employees whose total working time does not exceed 30 hours in any week or six hours in any day.

How to Calculate Overtime Pay

There are multiple ways to calculate overtime pay, based on specific circumstances. The California Labor Commissioner’s website provides the following explanation 

If you are paid on an hourly basis, that amount, including among other things, shift differentials and the per hour value of any non-hourly compensation the employee has earned, is the regular rate of pay.

If you are paid a salary, the regular rate is determined as follows:

Multiply the monthly remuneration by 12 (months) to get the annual salary.

Divide the annual salary by 52 (weeks) to get the weekly salary.

Divide the weekly salary by the number of legal maximum regular hours (40) to get the regular hourly rate.

If you are paid by the piece or commission, either of the following methods may be used to determine the regular rate of pay for purposes of computing overtime:

The piece or commission rate is used as the regular rate and you are paid one and one-half this rate for production during the first four overtime hours in a workday, and double time for all hours worked beyond 12 in a workday; or

Divide your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours. For each overtime hour worked you are entitled to an additional one-half the regular rate for hours requiring time and one-half, and to the full rate for hours requiring double time.

A group rate for piece workers is an acceptable method for computing the regular rate of pay. In using this method, the total number of pieces produced by the group is divided by the number of people in the group, with each person being paid accordingly. The regular rate for each worker is determined by dividing the pay received by the number of hours worked. The regular rate cannot be less than the minimum wage.

If you are paid two or more rates by the same employer during the workweek, the regular rate is the “weighted average” which is determined by dividing your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours. For example, if you work 32 hours at $11.00 an hour and 10 hours during the same workweek at $9.00 an hour, your weighted average (and thus the regular rate for that workweek) is $10.52. This is calculated by adding your $442 straight time pay for the workweek [(32hours x $11.00/hour) + (10 hours x $9.00/hour) = $442] and dividing it by the 42 hours you worked.

From the State of California Department of Industrial Relations Website: (https://www.dir.ca.gov/dlse/faq_overtime.htm#:~:text=For%20each%20overtime%20hour%20worked,for%20hours%20requiring%20double%20time) 

Additional Protections for Certain Workers

California law also provides additional protections for certain classes of employees. For example, California Labor Code §1454 requires employers of domestic workers, such as nannies and caregivers, to pay overtime on any hours worked over nine hours in a day or 45 hours in a week. 

Additionally, agricultural workers now receive most of the same protections in the California Labor Code, including overtime pay, as non-agricultural workers. (See California Labor Code §§500-556, 558.1 and Industrial Welfare Commission Wage Order No. 14).

The calculation of overtime pay for certain workers can be slightly different than the general calculation. For example, the overtime pay for farmworkers is calculated based on their regular rate of pay plus any piece-rate earnings. The overtime pay for domestic workers is calculated based on their regular rate of pay plus any tips that they receive.

If you are unsure how to calculate your overtime pay, you should consult with an attorney.

What to Do If You Are Not Paid Overtime

If you believe that your employer is not paying you overtime, you should first try to resolve the issue directly with your employer. You can do this by talking to your supervisor or human resources department.

Your employer cannot make you waive your right to overtime. California Labor Code §1194 makes it illegal to force a California employee to waive their right to overtime. Even if an employer forces the employee to make this agreement, the employer still has to pay the employee overtime, because the agreement is not enforceable. If the employer retaliates against the employee for complaining about or reporting the illegal agreement, the employer may have to pay the employee additional penalties, fines and damages.

If you are unable to resolve the issue directly with your employer, you can file a complaint with the California Department of Industrial Relations (DIR). The DIR will investigate your complaint and take appropriate action if it finds that your employer has violated the law.

You can also contact an attorney and schedule an immediate appointment to discuss your issues and determine the best course of action.

Conclusion

California overtime law is designed to protect employees who work more than 40 hours in a workweek. If you believe that your employer is not paying you overtime, you should first try to resolve the issue directly with your employer. If you are unable to resolve the issue directly, you can file a complaint with the California Department of Industrial Relations.