California overtime law is an area of constant confusion, tension and struggle with employers and employees.

Legislation which became effective on January 1, 2000 implemented significant changes to California’s labor laws. One major impact of this legislation is that California has since become a “daily overtime” state. What is the difference between a “daily” overtime paradigm and a “weekly” overtime paradigm?

Weekly v. Daily Overtime

In much of the U.S. an employee who works more than eight hours per day but less than forty hours per week is entitled to just their standard rate of pay (i.e. “straight” time). But in California, all non-exempt (i.e. “hourly”) employees who work in excess of eight hours per day must be compensated for their excess hours at one-and-a-half (1.5x) times their normal rate of pay — even if the employee works LESS than 40 hours that week. Moreover, employees who work in excess of twelve hours per day be compensated at twice (2x) their standard rate of pay for each additional hour worked.

Example: To illustrate the difference in these two approaches, consider an employee who works ten hours per day, four days per week at a straight rate of $10/hour.

Under California’s daily overtime law, this employee would be paid her standard $10/hour rate for the first eight hours worked each day, but would be paid $15/hour for each additional hour worked that same day. Total earnings would be: $460 = $320 (4 * $80 per day) + 120 (4 * $30 per day).

Under a weekly overtime law, this employee would be paid her standard $10/hour rate for all 40 hours. Total earnings would be: $400 = (4 * $100 per day).

Somewhat predictably, management/ownership tends to favor the weekly overtime approach, and labor/employees tend to favor the weekly approach.

Daily overtime works in concert with Weekly overtime

Of course, the daily overtime legislation does not affect the “weekly overtime” provisions which are foundational principles of labor law nationwide. Under California’s weekly overtime laws, any employee who works either (1) in excess of forty hours per week, or (2) more than six days per week, is entitled to overtime compensation. Such an employee will receive one-and-a-half times their normal pay for each hour worked in excess of forty hours, or each hour worked on the seventh day, respectively. Additionally, on the seventh day of work in a single week, each hour worked in excess of eight hours requires compensation at double the ordinary rate of pay.

If you are an hourly employee in California, and work more than eight hours per day, forty hours per week, or six days per week, you have the right to overtime and double time rates of compensation for those additional hours. If you believe you are not being compensated in accordance with California’s overtime laws, please contact our firm for a free consultation.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc |   LinkedIn | Facebook | YouTube

On April 15, 2010, President Obama signed into law the Continuing Extension Act of 2010 (H.R. 4851), part of which provides a temporary extension to eligibility for federal COBRA premium subsidies. As a practical effect of this legislation, California employees laid-off or terminated before May 31, 2010 may be entitled to receive a substantial government subsidy to apply towards their health insurance premiums under their former employer’s health plan.

What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly referred to as COBRA, is a law signed by former President Reagan. In relevant part, COBRA created an insurance program that allows some employees to maintain their former employer’s health insurance coverage after leaving employment for up to 18 months. Essentially, employers receive tax incentives to implement a health plan which provides temporarily continued coverage to employees who are terminated, laid-off or otherwise lose coverage due to some qualifying event. The purpose is to provide coverage for a set period of time or until an alternative source of health insurance is secured.

Historically, COBRA did NOT require the employer to pay for the cost of providing continuation coverage. Rather, the former employee must make the premium payments to maintain coverage under the employer’s health plan. However, in response to the recent economic meltdown, Congress recently enacted legislation that amended and supplemented COBRA.

Three Changes in COBRA

The first of these supplementary laws is the American Recovery and Reinvestment Act of 2009 (ARRA), which provides for a 65% federal subsidy of COBRA-enabled insurance, for up to 9 months after an employee’s involuntary termination, so long as the employee has no other group sponsored health insurance option and is otherwise eligible to enroll in COBRA. Second, the Department of Defense Appropriations Act extended COBRA subsidy eligibility to employees terminated before February 28, 2010, and extended the 9 month subsidy period to 15 months. Third, the Temporary Extension Act of 2010 extends COBRA subsidy eligibility to employees terminated before March 31, 2010, which was later extended to May 31, 2010 by the Continuing Extension Act of 2010.

Therefore, under the current scheme, if you were terminated, laid off, or otherwise lost your eligibility to participate in your former employer’s health plan prior to May 31, 2010, you and your immediate family are potentially entitled to a 15 month continuance of that former coverage. Moreover, if qualified for such coverage, you may be eligible to have the federal government pay 65% of the cost of your premiums for 15 out of the 18 months.

Qualifying employers are required to notify all terminated employees of their potential rights to COBRA and ARRA benefits. So, if you were recently terminated and not notified of your potential rights under COBRA, you should contact your employer immediately to request their COBRA information package. For more information on whether you qualify and how to apply, please visit http://www.dol.gov/ebsa/cobra.html & http://www.dol.gov/ebsa/newsroom/fscobra.html.

About Adishian Law Group, P.C.

Adishian Law Group is a California law firm with a statewide practice in the areas of Corporate law, Employment law, Real Estate law and Mediation Services. Adishianlaw.com is one

of the oldest continually operating law firm websites on the Internet. The firm serves its clientele via three offices located in the major business hubs of El Segundo, Palo Alto and San Francisco. As of March 2013, Adishian Law Group, P.C. has represented individual and corporate clients located across 20 California counties, 4 States outside of California and 9 foreign countries — in over 340 legal matters.

For more information about this topic or to speak with Chris Adishian:

Telephone: 310.726.0888 | 650.646.4022 | 415.955.0888
Email: askalg@adishianlaw.com
Social Media: @algpc | LinkedIn | Facebook | YouTube