Overtime Laws in California: Everything You Need to Know

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Overtime laws can be tricky, and the differences between laws in different states can have employers running head over heels for information. That’s why the actiTIME experts have collected all the information you need about overtime law in California!

Overtime laws in California

What Are the Overtime Laws in California?

In 1938, a law called the Fair Labor Standards Act (FLSA) was passed in order to make sure that workers were adequately protected in the country. Since the FLSA is a federal law, individual states have the option of following it to the letter or adding to it with their own legislation. California has a number of special laws that only apply within the state and we list the most important ones below. If you’re new to the idea of overtime, read our introductory post before continuing below.

One of the first things to confirm is what workweek your company operates with. California law defines a work week as any consecutive seven days made up of 24 hours – this doesn’t mean, however, that it has to start on Sunday. It can begin on any day, but it has to remain consistent. Different positions within the company (cashiers, security officers, bank tellers) can have different workweeks.

Since California follows the FLSA’s workweek guidelines, all employees are qualified for overtime pay once they’ve worked more than 40 hours in a single workweek. You can’t swap hours between workweeks to compensate:

Yes
Week 1:
49 hours
Week 2:
31 hours
Total:
71 regular hours
+ 9 overtime hours
No
Week 1:
49 hours
Week 2:
31 hours
Total:
80 regular hours

In California, there are a number of additional laws that are unique to the state. First, there’s an additional requirement that any hour worked over 8 in a single workday (24 hour period) must be counted as overtime. In this case, overtime hours may be counted in a manner like the following:.

Yes
Day 1:
5 hours
Day 2:
9 hours
Day 3:
11 hours
Day 4:
8 hours
Day 5:
7 hours
Total:
36 regular hours
+ 4 overtime hours
No
Day 1:
5 hours
Day 2:
9 hours
Day 3:
11 hours
Day 4:
8 hours
Day 5:
7 hours
Total:
40 regular hours

Additionally, the first eight hours worked on the seventh consecutive day in one workweek will be paid out as overtime hours.

Yes
Day 1:
5 hours
Day 2:
6 hours
Day 3:
4 hours
Day 4:
8 hours
Day 5:
7 hours
Day 6:
5 hours
Day 7:
5 hours
Total:
35 regular hours
+ 5 overtime hours
No
Day 1:
5 hours
Day 2:
6 hours
Day 3:
4 hours
Day 4:
8 hours
Day 5:
7 hours
Day 6:
5 hours
Day 7:
5 hours
Total:
40 regular hours

Additionally, there are two circumstances when California employers must pay double the regular rate of pay:

  • For any additional hour after an employee works 12 hours on any day;
  • For any additional hour after an employee works 8 hours on the seventh consecutive day in any workweek.

In many states, overtime must be authorized by the employer in order for an employee to be paid out time and a half, but in California this is not the case. A worker can work overtime without their supervisor’s approval, and can be punished for it accordingly, but in any case the proper overtime pay must still be received.

There are additional regulations when it comes to age. Workers who are 15 years old and under cannot work overtime in any circumstances. Employees between the ages of 16 and 17 can only work up to 48 hours a week, and the final 8 hours must be counted (and paid) as overtime). There are extra rules as to when teenagers can work – for example, if it’s permitted for them to work on a school night or day.

Overtime hours that have been saved up can be used in two ways:

  • Overtime pay: paid out at 1.5x the regular rate of pay;
  • Compensatory time: each overtime hour can be used as 1.5 paid vacation hours.

Note that compensatory time cannot ever exceed 240 hours at any given time.

California has the most complex overtime laws of any state in the USA – arming yourself with knowledge of the law can help you take care of your workers and avoid any labor-related suits down the road.

How Do I Calculate Overtime Pay in California?

For the most part, calculating overtime pay is simple.

California law sets the minimum wage at $13.00 an hour, which would make the base overtime rate (x1.5) $19.50. So an employee who receives minimum wage might have a monthly paycheck that looks like this (before taxes):

Week 1:
Week 2:
Week 3:
Week 4:
Regular hours:
Overtime hours:
Total:
37 hours (37 regular)
46 hours (40 regular + 6 overtime)
31 hours (31 regular)
42 hours (40 regular + 2 overtime)
148 x $13.00 = $1924.00
8 x $19.50 = $156.00
$2080.00

Once you get the hang of it, calculating overtime pay is simple enough. But there are a couple other things you need to keep in mind.

The first is commission. For salepeople, commission is often a significant part of their salary and thus must be taken into account when calculating the base rate of pay – which then goes on to be used to calculate overtime rate. You’ll have to run a few extra numbers to stay on top of this.

What it amounts to is keeping track of the commissions that a worker’s earned in a given period (usually a workweek) and then adding it to their regular salary. Then you take the lump sum and divide it by the hours worked by the employee. For salespersons making minimum wage with commissions, their weekly payout might look like this:

Week 1:
Regular pay:
40 hours x $13 ($520) + commission ($325) = $845
$845 / 40 = $21.13

A week including overtime hours might look like this:

Week 2:
Regular pay:
Overtime pay:
Total regular hours:
Total overtime hours:
Total:
44 hours x $13 ($572) + commission ($250) = $822
$822 / 44 = $18.68
$18.68 x 1.5 = $28.02
40 x $18.68 = $747.20
4 x $28.02 = $112.08
$859.28

Another thing to include in your calculations are bonuses. Many bonuses, especially if your workers get non-discretionary ones, may have to be included into your base pay rate calculations. First you take the sum earned by your employee (as per their base pay) over the relevant bonus period. Then add that sum to the total bonus and divide that number by the hours worked over the bonus period. The number you’re left with is the regular pay, and you can now use it to calculate overtime rates.

For an employee who worked 160 hours at minimum wage with a $1000 monthly bonus, their regular pay rate would look like this:

160 hours x $13 = $2080 

Regular hours: ($2080) + bonus ($1000) = $3080
Regular rate: $3080 / 160 = $19.25
Overtime rate: $19.25 x 1.5 = $28.88

With this information, you can now find an employee’s overtime rate for that month:

Week 1:
Week 2:
Week 3:
Week 4:
Total pay:
36 hours (36 x $19.25) = $693
47 hours (40 x $19.25 [$770] + 7 x $28.88 [$202.16]) = $972.16
40 hours (40 x $19.25) = $770
37 hours (37 x $19.25) = $712.25
$3147.41

For salaried employees, if their jobs don’t fall into the exemption list (see below), calculating the regular pay rate involves dividing the yearly salary by 52 weeks, and then once more by 40 hours (as per workweek).

If a worker’s yearly salary is $35,000 a year, then their calculation would look like this:

$35,000 / 52 (weeks in a year) = $673.01

$673.01 / 40 (hours in a workweek) = $16.83 (regular pay rate)
$16.83 x 1.5 = $25.25 (overtime rate)

If one of your employees holds two positions in your company with two different pay rates, then their regular pay rate for overtime purposes would be the weighted average of both rates.

Position 1:
Position 2:
Total weekly earnings:
Regular pay rate:
Overtime pay rate:
20 hours x $15.00 = $300
10 hours x $13.00 = $130
$430
$430 / 30 = $14.33
$14.33 x 1.5 = $21.50

When it comes to paid time off (vacation, sick days, etc), the paid hours do not count towards overtime in the state of California.

Who Is and Isn’t Qualified for Overtime Pay in California?

According to the FLSA, not all workers are entitled to overtime pay. The regulations were written with certain types of employee in mind, and mainly looked to protect manual laborers from exploitation.

Practically speaking, one of two conditions have to be present in order to qualify for overtime:

At least one of the must be fulfilled:

  • Weekly income has to be under $455 a week ($23,660 a year);
  • They cannot be employed in an industry on the exemption list (see below).

The FLSA stipulates that construction workers, warehouse stockers, factory workers and other manual laborers are automatically qualified for overtime pay. First responders like paramedics, firefighters and police, as well as paralegals and nurses, are also included.

The FLSA considers the following positions as exempt from overtime law if a worker earns more than $455 weekly:

Executives (who manage more than two people full-time);
Administrative workers;
Non-manual professional workers (artists, teachers, programmers);
External salespeople;
Independent contractors;
Certain transportation and agricultural workers;
Certain live-in employees.

Additionally, California law has added more positions to the list:

  • Actors;
  • Student nurses;
  • Drivers;
  • Certain journalists.

If you are unsure about which employees qualify for overtime pay or not, look over both the FLSA and state labor laws.

Track Overtime Using actiTIME!

The laws in California are different from other states and making sure that your company knows how to navigate them will make sure your workers receive fair payment – as well as protect you from legal troubles in the event of a mistake.

And getting informed doesn’t have to be a headache – our resources and products here at actiTIME help you get on top of your overtime payouts! Read on to find out more about what we can do for you.

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