California business owners need to comply with multiple layers of wage and hour laws that apply to their business and their employees. Having a basic understanding regarding overtime pay for California employees is not enough. As a California employer, you must understand the federal rules set forth in the Fair Labor and Standards Act (FLSA), state wage and hour rules of the California Labor Code and any local regulations that apply to your specific circumstances.
Sometimes, state, federal and local laws conflict, so it can be challenging to know which regulation to follow. In California, the law that is most favorable to the employee’s rights is usually the rule that controls. If you are unsure, it’s best to consult with a Southern California wage and hour litigation attorney for guidance.
When Must Employers Provide Overtime Pay For California Employees?
The rules governing overtime pay for California employees are established by the Department of Industrial Relations. In general, overtime provisions apply to nonexempt employees who work more than eight hours in any workday or more than 40 hours in any workweek. Time worked beyond these limitations must be compensated at the rate of one and one-half times the employee’s regular rate of pay. Also, if an employee works more than six days in any workweek, the worker should receive time and one-half for every hour worked on the seventh day of the workweek, up to eight hours.
If the employee works more than 12 hours in a regular workday or more than 8 hours on the seventh consecutive day in a workweek, the overtime compensation is calculated at twice the regular rate of pay for each additional hour.
The law provides many exemptions (where overtime laws do not apply to a certain classification of employees) and exceptions (where overtime rules do apply, but they are different from the general rules). An experienced Los Angeles wage and hour litigation lawyer can explain these complicated rules and which control your specific business situation.
How to Calculate Overtime Pay for California Employees
To calculate required overtime wages, you must start with the employee’s regular rate of pay. This is the compensation the worker normally receives for the type of work performed. The regular rate of pay includes all forms of payment including hourly, salary, commission and piecework, and it cannot be less than the current local or California minimum wage.
If an employee works an alternative workweek schedule such as four 10-hour days or three 12-hour days, the regular rate of pay is still calculated based upon a 40-hour workweek, and the Industrial Welfare Commission has created different Work Orders to address overtime pay in these situations.
An hourly worker’s regular rate of pay is the actual hourly amount, which may include shift differential payments or other compensation included in that amount. A salaried employee’s regular rate of pay is determined by multiplying the employee’s monthly payment by 12 to reach an annual amount, then dividing this amount by 52 to reach a weekly amount. The weekly amount is then divided by 40 hours to reach the regular hourly rate of pay.
The regular rate of pay for commissioned workers and those paid on a piecemeal basis is more complicated. Count on an experienced Los Angeles wage and hour lawyer to help you calculate pay rates and overtime pay for California employees to avoid costly mistakes.
Common Southern California Employer Wage and Hour Questions
In her extensive experience, I have provided many California employer wage and hour resources for business clients including answers to some of the more common employer questions that you might be facing right now.
The answer depends on whether the salaried worker qualifies as an exempt employee under federal and state laws. Alternatively, if the California Labor Code or the Industrial Welfare Commission has issued a Wage Order that specifically exempts the worker from overtime provisions.
According to Labor Code Section 204, all overtime compensation must be paid no later than the payroll pay period immediately following the time frame when the overtime was earned. If you pay your employees weekly, every two weeks, or twice monthly, overtime compensation must be paid no later than seven days after the close of the payroll period in which it was earned.
Yes, you can establish your employee’s schedule and include overtime if you want. If the worker refuses to work overtime, you can impose discipline or even fire the worker. However, you can’t discipline an employee who refuses to work seven days in a row. If the worker knows that a seven-day work schedule cannot be required but agrees to work on the seventh day, the worker is allowed to accept the schedule with overtime pay without penalty to you.
You must still pay the overtime earned by a worker who works more than eight hours in one day or 40 hours in a workweek. You can, however, discipline an employee who violates a company policy against working overtime without authorization. Also, an employee cannot hide unauthorized overtime work from you and then try to claim overtime compensation at a later date. Of course, all employers must keep accurate records of their employees’ work hours and compensate them for time actually worked.
No. California Labor Code Section 1194 requires all employers to pay overtime compensation when properly earned regardless of any agreements to the contrary.
A Southern California Wage and Hour Litigation Lawyer Can Defend You against Claims for Overtime Pay for California Employees
If an employee does not receive the correct amount of overtime pay earned, he or she can pursue legal action against the company for the unpaid compensation and possibly recover penalties for the failure to pay. The results can be costly if the business is unprepared to defend its position.
Workers can follow these three basic paths to recover unpaid overtime compensation, each with its own set of complicated rules:
- First, an employee can file a wage claim with the Division of Labor Standards Enforcement, also known as the Labor Commissioner’s Office. A Deputy Labor Commissioner reviews the claim and decides whether it has merit and whether it should be referred to a conference or a hearing. If either side doesn’t agree with the hearing officer’s order, decision, or award, the aggrieved party can file a civil lawsuit.
- The employee or the employer can file a civil lawsuit to resolve the employee’s wage claim that resulted in an unfavorable Labor Commission ruling. The court does not rely upon the Commissioner’s findings or ruling. Instead, the trial court holds a new proceeding and accepts evidence and witness testimony to decide the issue.
- An employee can bring a civil action under California’s Private Attorneys General Act (PAGA) on behalf of himself or herself, other employees and even the State of California to enforce the state wage and hour laws. Employees who bring PAGA cases must follow the specific procedures and, if they are successful, the employer can be found liable for civil penalties in addition to payment of unpaid earned compensation.
These actions require complex preparation and a solid legal strategy. It’s risky for businesses to navigate California’s wage and hour laws without an experienced PAGA defense attorney on their side.
Providing Decades of Legal Experience Defending Employers Against Claims for Overtime Pay for California Employees
Employers facing a dispute regarding overtime pay for California employees count on attorney Susan A. Rodriguez for her experience and legal knowledge dealing with employment law matters. Susan has vigorously defended employers for more than three decades and successfully guides her clients through a variety of employment law issues. To schedule a consultation at the Law Offices of Susan A. Rodriguez, APC, call (310) 350-9995 or complete this online contact form.
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For legal advice, contact an attorney at Law Offices of Susan A. Rodriguez, APC or an attorney actively practicing in your jurisdiction.