California's Overtime Pay Regulations

Instructor: Rachel Shipley

Rachel has worked with several businesses developing policies on customer experience and administration.

In this lesson, we will discuss the laws and regulations in the state of California regarding what an employee is entitled to be compensated when working overtime.

Stay Legal

Overtime is additional time worked that is in excess to what employees usually work. In the California private sector, almost all nonexempt employees are eligible for overtime pay. Overtime in California is primarily based on the number of hours an employee works each day, but also must take into account the total number of hours worked for the week.

When evaluating the daily or weekly limits that an employee works in a single workweek, an employer must consider the total number of hours worked over eight hours each day combined for the week and compare that to the total number of hours above 40 hours worked for the week. Whichever is greater is how the overtime will be calculated.

For example, Timothy worked six 9 hour days for the workweek. The daily overtime is 1 hour/day x 6 days, for a total daily overtime of 6 hours. The total number of hours worked was 54 hours (6 days x 9 hours), which is 14 hours over the 40 hour workweek limit. The 14 weekly hours is greater than the 6 daily hours, so the employee is entitled to 14 hours of overtime.

By law, employees are entitled to overtime pay when they work more than eight hours in a day, more than 40 hours in a week, and when they work seven consecutive days in a workweek. Where it gets difficult to calculate what an employee is owed in regards to overtime in California, is that some hours will be paid at time and one-half and others are required to be paid at double time.

  • Daily overtime is paid after eight hours worked in a day, as follows:
  • The first four hours after eight hours worked are paid at time and one-half ($10 per hour x 1.5 = $15 per hour overtime pay).
  • After those four hours of overtime, any additional time worked is considered double time pay ($10 per hour x 2 = $20 per hour double time pay).

For the seventh consecutive day in a workweek, the first eight hours are paid at time and one-half and any hours over eight are paid at double time.

The over 40 hour calculation is pretty straightforward. What complicates this concept is the no 'pyramiding' rule. Double dipping for both daily and weekly overtime is not permitted. Basically once an hour is counted as an overtime hour whether for the daily or weekly overtime, it may not be counted towards another form of overtime.

For example, Peter worked 10 hours in the office one day; the two daily overtime hours cannot then be counted as hours worked in determining the weekly overtime amount.

Another interesting component to California's overtime laws is that workers do not have a legal right to say no to working overtime. There are some Wage Orders, company policies and union contracts that can determine this, and there are limits to the number of hours an employee is required to work overtime, but employees do not have the choice to say yes or no when an employer requires overtime to be worked. If they choose to make it mandatory, the employee is bound by that and must work the hours.

Math Time

Let's take a look at some examples to see how overtime affects an employee's gross pay.

Paid Hourly

When an employee is paid hourly, that amount is their regular rate of pay. Remember, we will have to look at daily overtime and weekly overtime, then compare the two to determine how the overtime will be calculated.

Example: John works for A&B Hardware Store. He makes $10 per hour. John is paid biweekly (every two weeks). John worked 62 hours last week and 34 hours this week.

He worked the following schedule:

Week 1

Monday: 14 hours (8 regular hours/4 time and one-half hours/2 double time hours)

Tuesday: 12 hours (8 regular hours/4 time and one-half hours)

Wednesday: 8 hours (8 regular hours)

Thursday: 15 hours (8 regular hours/4 time and one-half hours/3 double time hours)

Friday: 13 hours (8 regular hours/4 time and one-half hours/1 double time hours)

John's daily overtime total was 22 hours. His weekly overtime total was also 22 hours. Since they are the same, the daily overtime rates apply.

Week 2

Monday: 10 hours (8 regular hours/2 time and one-half hours)

Tuesday: 4 hours (4 regular hours)

Wednesday: 4 hours (4 regular hours)

Thursday: 4 hours (4 regular hours)

Friday: 12 hours (8 regular hours/4 time and one-half hours)

John's daily overtime total was 6 hours. Since he did not work over 40 hours, there is no weekly overtime. As such, the daily overtime rates apply.

What should John's gross paycheck be?

  • Regular Rate of Pay: $10 per hour
  • Time and One-Half Pay: $15 per hour
  • Double Time Pay: $20 per hour

Total Hours Worked By Category:

Regular: 68 hours

Time and One-Half: 22 hours

Double Time: 6 hours

Total Gross Pay By Category:

Regular: 68 hours x $10 = $680

Time and One-Half: 22 hours x $15 = $330

Double Time: 6 hours x $20 = $120

John's Gross Pay: $1130

Paid Salary

When an employee is paid salary, you can determine the employee's regular rate of pay by:

  1. Multiply the monthly pay by 12 (months) = annual salary
  2. Divide the annual salary by 52 (weeks) = weekly salary
  3. Divide the weekly salary by 40 (legal maximum regular working hours) = hourly rate

While an employee and employer may think being a nonexempt salary employee means the employer is not required to pay overtime, that is incorrect. All nonexempt salary employees must be paid for all hours worked, whether it is daily or weekly overtime.

Example: Sarah works for A&B Hardware Store as a salaried employee. Her biweekly salary is $1500. Sarah worked 46 hours last week and 42 hours this week. What should Sarah's gross paycheck be?

She worked the following schedule:

Week 1

Monday: 8 hours (8 regular hours)

Tuesday: 8 hours (8 regular hours)

Wednesday: 10 hours (8 regular hours/2 time and one-half hours)

Thursday: 12 hours (8 regular hours/4 time and one-half hours)

Friday: 8 hours (8 regular hours)

Sarah's daily overtime hours was 6 hours. Since she worked 46 hours in the workweek, her weekly overtime was also 6 hours. So, the daily overtime rates will apply.

Week 2

Monday: 3 hours (3 regular hours)

Tuesday: 8 hours (8 regular hours)

Wednesday: 8 hours (8 regular hours)

Thursday: 8 hours (8 regular hours)

Friday: 15 hours (8 regular hours/4 time and one-half hours/3 double time hours)

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