Overtime Laws
“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. ..."STATUTE
“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. …”
APPLICATION
In California, the general overtime provisions are that a nonexempt employee 18 years of age or older, or any minor employee 16 or 17 years of age who is not required by law to attend school and is not otherwise prohibited by law from engaging in the subject work, shall not be employed more than eight hours in any workday or more than 40 hours in any workweek unless he or she receives one and one-half times his or her regular rate of pay for all hours worked over eight hours in any workday and over 40 hours in the workweek (or double time as specified above).
Overtime pay (whether it is time and a half or double-time) is based on an employee’s “regular rate” of pay. To find out if you are being properly compensated for your overtime hours, you first need to know what your regular rate is.
Generally, the regular rate is the compensation you normally earn for the work you perform. It includes a number of different kinds of pay, such as hourly earnings, salary, piecework earnings, and commissions.
There are several ways to calculate your “regular rate” including, for example:
- If you are paid on an hourly basis, that amount is your regular rate of pay;
- If you are paid a salary (and you are not exempt), the regular rate is determined as follows:
- Multiply your monthly pay by 12 (months) to get your annual salary.
- Divide the annual salary by 52 (weeks) to get your weekly salary.
- Divide the weekly salary by 40 (hours) to get your regular hourly rate.
- OR, simply divide your annual salary by 2,080 total hours.
- If you are paid by the piece or commission, 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 example, if you earned $1000 in a workweek, and you worked 50 hours, your regular rate is $20 per hour.
- Finally, if you receive nondiscretionary bonuses (that is, bonuses that will automatically be paid if certain conditions are met), the amount of the bonus must be included in your regular rate before overtime is calculated. For example, if an employee earns $1000 in a workweek, and receives a $100 bonus for meeting certain metrics goals, and he or she worked 50 hours, the regular rate for overtime would be $22.
EXCEPTIONS (a.k.a. EXEMPTIONS)
There are, however, a number of exemptions from the overtime law. An “exemption” means that the overtime law does not apply to a particular classification of employees.
The most common exceptions to qualifying for overtime are the professional, administrative, and executive exemptions.
- Professional Exemption: generally applies to employees who are licensed or certified by the state and are primarily engaged in one of the following professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting.
- Administrative Exemption: typically applies to employees whose duties involve the performance of office or non-manual work directly related to management policies or general business operations of the employer or its customers.
- Executive Exemption: applies to employees whose duties and responsibilities involve the management of the business in which they are employed or of a “customarily recognized department or subdivision thereof;” who customarily and regularly directs the work of two or more other employees; and who has authority to hire/fire others or “whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight.”
Also, to even qualify for one of these exemptions, an employee must first prove that he/she is paid on a salary basis (as opposed hourly) and earn a certain threshold amount of money each year.
PENALTY
If an employer has failed to pay proper overtime wages at the time your employment ends, you may be eligible to collect penalties from the employer under Labor Code Section 203 (accruing at a day’s worth of wages for up to 30 consecutive days).