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Knowing when an employer must pay overtime is crucial to protecting an employee’s rights. California law sets particular guidelines for when employers must pay an overtime rate for extra work.
Employees may qualify for time and a half pay or even double the regular hourly wage depending on the hours or days worked in a week. The overtime laws define specific situations where employees are guaranteed this extra pay — that’s what this guide will cover.
When an employer fails to pay what is owed, those employees may be entitled to back pay and other damages related to the refusal to pay overtime. Not all California employees who work overtime hours are eligible for additional pay, but many are. An employee can register a complaint with the California Labor Commissioner or even sue their employer to recoup the overtime pay they’re owed.
This article will help you understand both sides:
As an employer, how you can track and calculate overtime
As an employee, when you may be entitled to overtime pay rates
First, we’ll start by providing helpful definitions to clear up what qualifies as overtime.
California’s overtime law is located in California Labor Code 510. It states:
(a) Eight hours of labor constitutes a day’s work. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee. Any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate of pay for an employee. In addition, any work in excess of eight hours on any seventh day of a workweek shall be compensated at the rate of no less than twice the regular rate of pay of an employee. Nothing in this section requires an employer to combine more than one rate of overtime compensation in order to calculate the amount to be paid to an employee for any hour of overtime work.
In essence, employees are entitled to overtime pay when they work more than a “normal” workweek. Let’s break this down a little bit more because this can get complicated.
There are times when employers must pay an overtime rate. When an employer doesn’t pay expected overtime, they may be in violation of both state and federal laws.
California overtime law applies to eligible employees when:
They log more than eight hours in one workday
They put in more than 40 hours in a workweek
They work more than six days in a given workweek
When these situations apply, employers must pay time and a half. This time and a half figure is based on the employee’s hourly wage.
Here’s an example for employees: If you make $20 per hour, you’ll be entitled to earn $30 per hour when you qualify for time and a half pay.
Some employers ignore this requirement and expect employees to work overtime without extra pay — but this is illegal and may permit employees to file a claim for the overtime owed.
That’s why keeping overtime in mind when creating employee schedules or setting up shifts is so crucial.
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Employees may be eligible for double their hourly rate when they work:
More than 12 hours in a single workday
More than eight hours, seven days in a row, during one workweek
California law states that employees may be entitled to double pay at certain points in the week and time and a half in others. Understanding exactly when each of these pay scales kicks in can be difficult, but we’ll help you navigate it later in this article.
Responsible employers use the technology needed to protect themselves and their teams. Tracking overtime and other worked hours is key to managing this information effectively.
It’s important to cover a number of definitions in the California overtime law:
Workday
Workweek
Alternative workweeks
These terms can have a different definition than what is used in everyday conversation. The legal definitions can substantially impact how pay is calculated in a given week.
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Under California law, a workday is a 24-hour period that begins at any given time during that day. Workday calculations must start and end at the same time for all employees, but the employer may choose when that 24-hour period is to begin.
This doesn’t mean that every employee has to start work at the same time every day. The start time is simply for the purpose of calculating the beginning of the legal workday for that particular employer.
A workweek is seven consecutive 24-hour workdays. Workweeks must be calculated consistently from the same day and time each week. This prevents employers from changing the definition of their workweek just to avoid paying overtime.
While a workweek definition can be changed for legitimate purposes, these changes are closely scrutinized to protect employee rights.
An alternative workweek schedule is a different way to structure the workweek. It may involve longer days with fewer days worked in a week.
While certain employers may ask people to work up to 10 hours per day, they’re still not allowed to ask for more than 40 hours total per week without paying overtime. Alternative workweeks are subject to stringent requirements to protect the employee.
Just because employers have an alternative workweek, it doesn’t mean their team is never entitled to overtime. It simply means the way hours are calculated may be different based on that unique situation. Planning for how to handle alternative workweek schedules can help employers avoid complications and potential labor disputes about overtime work.
Employees who are eligible for overtime pay rates are non-exempt, and work a sufficient number of hours in a particular day or week.
Non-exempt employees are subject to overtime laws and are given certain protections under the law. Unless a position satisfies the strict requirements to qualify as an exempt employee, that person is entitled to overtime pay when working overtime hours.
Protecting employee rights to overtime pay is essential. Employers are permitted to expect overtime work, but they’re also obligated to ensure that staff are paid properly for that time.
Not everyone qualifies for overtime rates. Labor Code 515 outlines six types of workers who don’t qualify:
Exempt employees
Unionized employees operating under a collective bargaining agreement
People in certain occupations with their own overtime rules
Independent contractors
Employees with an alternative workweek schedule
Outside salespeople
Let’s dive into this information a little more to understand how these ineligible categories are defined.
Exempt employees are unique and aren’t protected by the same overtime laws as other types of workers. They aren’t protected by wage laws or even meal and rest break requirements. To be considered exempt, they must meet specific criteria:
Have a “white collar” job that’s administrative, executive, or professional in nature that requires someone to exercise independent judgment and discretion.
Must receive a fixed salary rather than hourly pay. These salaried employees must make at least twice the California minimum wage for a full-time job at 40 hours per week.
Both of these situations must apply — only one isn’t enough to exempt someone from the overtime law protections. If an employer incorrectly classifies someone as exempt — whether purposefully or accidentally — it may entitle the employee to take legal action against them. Substantial back pay may be owed as well as possible other damages.
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Unionized employees may not be entitled to overtime pay when certain conditions are provided for in their collective bargaining agreement:
Hours of work, conditions, and wages
A regular hourly wage that’s 30% or more than California’s minimum wage
Wage rates specified for overtime hours
Typical overtime laws will not apply if these elements are not met. Understanding how hours are tracked for these types of agreements can be tricky without time tracking software or automated systems.
Certain occupations are subject to different overtime laws or aren’t entitled to overtime pay by California law. Employees who fall within these categories aren’t eligible for overtime pay despite not meeting the traditional “exempt” definition outlined above. These may include, but are not limited to:
Managers of nursing homes or assisted living facilities
Camp counselors
Agricultural workers
Personal attendants
Live-in household workers
Independent contractors aren’t considered employees and aren’t entitled to overtime pay. An independent contractor is someone who:
Performs services under a contract that states they’ll produce a specified result for a specified amount of pay
Maintains independent control over the means through which the end result is accomplished
In today’s gig economy, independent contractor status is common and may apply to your business.
If you have an alternative workweek schedule, the rules are different. However, employees are still entitled to overtime pay for hours worked beyond 40 in a given week, unless they meet the definition of an exempt worker in another area.
Outside salespeople typically aren’t entitled to receive overtime pay when they meet certain conditions:
They are at least 18 years old
At least half of their work is done away from the employer’s place of business
The salesperson sells services, items, contracts, or facility usage
These definitions can be very specific. Ultimately, employers should consult a skilled employment law attorney to determine whether employees qualify for overtime compensation through that specific form of employment or at particular business.
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When employees are eligible for overtime rates, that pay is calculated based on the number of hours worked in a week or on a certain day. These calculations vary depending on whether the overtime hours stem from working more than a regular workday or more total days within a week.
Let’s take a look at these different calculations.
Non-exempt employees are usually granted overtime rates if they perform more than eight hours of work in a particular workday. Most employees are on this regular schedule if they’re non-exempt.
If employees work more than eight hours during a 24-hour period, they should be entitled to additional pay for the extra hours put in and at an increased hourly wage.
Except when otherwise defined by the employer, California law defines a workday as 12:01 AM to midnight. The computation for a single 24-hour day is based on this timeline or the timeline set by the employer.
Here’s an example for employees: An employer may decide to define the 24-hour period from 8:01 AM to 8 AM the following day. If you work more than eight hours in that period of time, you’re likely owed overtime pay.
If you work overtime of eight hours or more in a single day, you’re entitled to time and a half pay. In other words, an additional half of your typical hourly rate is included for any hours above eight in a 24-hour period.
This is calculated differently if you work more than 12 hours that day. In this case, you’re entitled to double pay for any hours worked over 12 in that single day period. This means you could make normal pay, time and a half pay, and double pay at different times throughout your workday.
A separate metric measures how much time is worked in a single workweek rather than the day. If an employee works more than 40 hours in a workweek, they’re entitled to overtime rates as well. This is considered a week total and is not based on the number of hours worked on a particular day.
Even when an employee may have earned overtime because of a long shift, if the total “normal pay” weekly hours don’t exceed 40, they’re not entitled to overtime pay for this time. This is to avoid overtime pyramiding, which is discussed more below.
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If someone works for more than six consecutive days in a given week, they’re entitled to overtime pay as well. This special rule helps to prevent employee abuse where hours are spread out over many days.
This overtime pay may occur when an employee isn’t otherwise entitled to overtime based on the total hours — whether calculated by day or week. They’re entitled to time and a half pay on the seventh consecutive day of work.
If employees also work more than eight hours on the seventh consecutive day, they’re entitled to double pay for that time.
Overtime pyramiding occurs when two different types of overtime hours are counted at the same time by mistake. This is an incorrect way of calculating overtime and may result in overpayment to employees rather than underpayment. Many employees mistakenly calculate their expected overtime pay in this way by accident, so it’s helpful to understand this concept.
The most common way this occurs is by double-counting daily overtime and weekly overtime. Hours that exceed eight in a single workday are given their own overtime rate and aren’t counted toward the 40-hour weekly total. If they were, you would ultimately receive double compensation for overtime hours.
For example, if Joe works 10 hours on Monday, he’s entitled to overtime pay for two hours that Monday. If he works regular eight-hour days for the rest of the week, his total hours reach 42.
Joe isn’t eligible for overtime rates for going over 40 hours because two of those hours were already compensated at time and a half.
Overtime pyramiding is a common mistake made by employers, especially in large-scale operations with thousands of employees. These duplicated hours don’t qualify as overtime unless they independently qualify for overtime compensation.
When an employer refuses to pay the overtime that an employee is owed, that person can take action to enforce their rights. There are multiple options that empower Californian employees to receive the overtime pay they’re entitled to, including:
Filing a claim with the Division of Labor Standards Enforcement (DLSE) and California Labor Commissioner’s Office
Hiring a lawyer to file a civil lawsuit against your employer
Each case is unique and requires a determination of the best way to proceed. These options give you the ability to seek the overtime compensation owed.
Employees who have been denied their overtime pay can file a wage claim with the DLSE and the California Labor Commissioner’s Office. Filing a claim with these agencies permits you to fight for the overtime wages you’re entitled to.
Once the claim is filed, the Labor Commissioner’s Office will investigate it to determine whether you’re owed additional compensation and seek to resolve the claims.
After the claim is presented to these offices, there are different actions they may take. They might:
Dismiss the overtime claim
Refer the matter to a party conference to resolve the issue without a hearing
Schedule a hearing to determine the parties’ rights to overtime compensation
If the DLSE schedules a hearing, it will involve under-oath testimony by witnesses, presentation of exhibits, and any other evidence necessary to prove the claim. You may have an attorney represent you at this hearing. These proceedings are complicated and subject to specific rules that an experienced employment attorney should know.
The Commissioner’s Office will ultimately serve the parties with a short order, decision, or award that outlines its findings.
If the department orders the employer to pay overtime wages and the company refuses, a court will enter a judgment against the employer. This judgment may be collected through other legal procedures.
A different option is to work with an attorney to file a civil claim against your employer. The claim seeks to prove that you’re entitled to additional overtime compensation.
A civil claim against the employer may force a settlement, as they may wish to avoid litigation. If the employer decides to fight and you win the claim, you could receive substantial compensation.
In a winning case, you may be entitled to:
Any amount of unpaid wages or overtime
Interest on any unpaid amounts
Compensation for reasonable attorney fees and court costs
Certain employer violations may also be violations of federal law, such as the Fair Labor Standards Act (FLSA). You may be entitled to liquidated damages or even double damages in these cases. Double damages may also be available when a Californian employer’s lack of overtime payment was not in good faith.
You may wonder if it’s worth filing a lawsuit over just a few hundred dollars. Overtime lawsuits may entitle you to significant damages above and beyond the actual lost overtime wages.
However, it’s also important to know the cost of filing a lawsuit and what the outcomes might be.
If you think you have a claim against your employer, a consultation with a lawyer may help you determine if you’re entitled to monetary damages that can greatly benefit you.
There is another way to ensure overtime laws are upheld: time tracking software.
Business owners use Hubstaff’s weekly limits feature to keep employees from working overtime hours without their knowledge. Limits can be adjusted anytime, and employees can see exactly how many hours they’ve worked.
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Employers can set pay rates that allow them to track costs as the days and weeks go on. There are fewer surprises when hours are tracked easily and timesheets are generated automatically.
To try Hubstaff, start a free 14-day trial.
Spend less time tracking and more time growing your business. The all-in-one overtime tracker from Hubstaff can help employers manage employees and avoid potential problems with overtime pay. Built-in scheduling, attendance tracking, and hourly limits give you a clear picture of work hours and how much is owed.
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Disclaimer: This page and its contents are not legal advice and are for informational purposes only.
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