California Overtime

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?

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.

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.