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Overtime Pay California Law 2024: Guide for Employers and Employees

12 min read

By 2024, it’ll be more important than ever to stay informed about the state’s overtime laws. The laws not only protect employees’ rights, but also guide employers in adhering to legal standards, which fosters harmony at work.

In examining California’s overtime laws for 2024, it’s important to see whether there have been any significant changes or if the existing regulations still apply. This understanding isn’t just about legal compliance, but also about protecting the workforce while balancing business needs. Knowing these laws is essential to navigating the complexities of the modern work environment, whether you’re an employee or an employer.


Understanding Overtime in California

Overtime pay in California is governed by specific regulations that define who gets it and when. The classification of nonexempt employees is key to understanding this. Employees who don’t fall under certain exemptions defined by law, like executive, administrative, or professional roles, are eligible for overtime pay.

Nonexempt employees are entitled to overtime pay if they work more than 8 hours a day or more than 40 hours a week. Longer work hours beyond a typical full-time schedule are compensated by this law.

Specifically, the overtime rate in California is set at one and one-half times the employee’s regular rate of pay for all hours worked beyond the eight-hour threshold in a day and for the first eight hours worked on the seventh consecutive day of work in a workweek.

Furthermore, if an employee works more than 12 hours in a day or more than eight hours on the seventh consecutive day of work in a week, they get double pay.

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Calculating Overtime Pay in California

Understanding how to calculate overtime pay is crucial for both employers and employees in California. The ‘regular rate of pay’ is what’s used to calculate this, which includes more than just an employee’s hourly wage.

Determining the Regular Rate of Pay

The regular rate of pay includes hourly earnings, salary, piecework earnings, and commissions.

It must not be less than the minimum wage.

For salaried employees, the regular rate is calculated by dividing the weekly salary by the number of legal maximum regular hours (usually 40 hours per week).

Calculating Overtime for Hourly Employees

Overtime is paid at 1.5 times the regular hourly rate for hours worked over 8 hours in a day and up to 12 hours, and for the first 8 hours on the seventh consecutive day of work.

For hours worked over 12 in a day and over 8 hours on the seventh consecutive day, the rate is double the regular hourly rate.

Overtime for Salaried Employees

For employees on a salary, divide the annual salary by 52 to find the weekly salary, then divide by 40 to find the regular hourly rate.

Overtime is then calculated based on this hourly rate, as with hourly employees.

Piecework and Commission-Based Overtime

For piecework, the regular rate is the total earnings divided by total hours worked.

Overtime is then calculated at 1.5 times or double this rate, depending on the total hours worked.

For commissions, the regular rate is calculated by adding the commission to the hourly rate (if any) and then dividing by the total hours worked.

Multiple Pay Rates

If an employee has multiple pay rates, the regular rate is a weighted average, calculated by dividing total earnings by total hours worked in the week.

Please, to better understand how to calculate your overtime pay, click on this article where the calculation is explained in detailed.

Exemptions vs Exceptions

There are both exemptions and exceptions to California’s overtime laws, so you need to know both. Although these two terms are often used interchangeably, they have different meanings and implications.

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Exemptions from the Overtime Law

Exemptions are specific categories of employees that aren’t covered by overtime laws.

Fair Labor Standards Act (FLSA) and California law define executive, administrative, and professional roles as exemptions.

Typically, employees have to meet certain job duties, responsibilities, and salary levels to qualify for these exemptions.

Exemptions may also apply to computer professionals, outside salespeople, and some journalists and creatives.

Exceptions to the General Overtime Rules

The exceptions, on the other hand, are special rules that apply to certain classifications of employees.

One notable exception is the alternative workweek schedule, where employees work longer days for fewer days a week without receiving overtime pay for extended daily hours, provided that the total hours don’t exceed the standard 40-hour workweek.

Another example is overtime rules for agricultural workers. They’re different from most other types.

It’s also possible for unionized workers to have different overtime rules.

Unauthorized Overtime

Overtime presents a unique challenge at work, balancing the employer’s need for control over work hours with the employee’s right to compensation. Managing such situations requires understanding both parties’ obligations and rights.

Employer Obligations Regarding Unauthorized Overtime

Even if overtime work was not authorized or was explicitly prohibited, California law requires that employers pay for all hours worked. This means employees must be compensated for any overtime, authorized or not.

Employers cannot refuse to pay for unauthorized overtime as a disciplinary measure. The obligation to pay for all hours worked is a legal requirement.

However, employers do have the right to establish and enforce workplace policies regarding the scheduling and authorization of overtime.

Employee Rights in Unauthorized Overtime Situations

Employees have the right to be paid for all hours worked, including any overtime, regardless of whether it was authorized.

This right is protected under California labor laws, ensuring that employees are compensated for their labor.

Employees should be aware, however, that consistently working unauthorized overtime can lead to disciplinary action, as long as the discipline does not include withholding pay for hours worked.

Employer’s Disciplinary Rights

Employers retain the right to discipline employees who violate company policy by working overtime without authorization.

Disciplinary actions can include verbal or written warnings, suspension, or even termination, depending on the company’s policy and the severity of the violation.

It’s important for employers to have clear policies regarding overtime and to apply disciplinary measures consistently and fairly.

In summary, while employers must pay for all hours worked, including unauthorized overtime, they also have the right to enforce company policies and discipline employees who do not comply with these policies. Both employers and employees should understand their rights and obligations in these situations to ensure a fair and legally compliant workplace.

Overtime and Bonuses

In California, the interaction between bonuses and overtime pay is a nuanced aspect of employment law. Understanding how different types of bonuses affect the calculation of overtime pay is crucial for both employers and employees.

Types of Bonuses and Their Impact on Overtime Calculation

Bonuses in California are generally categorized into two types: discretionary and nondiscretionary.

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Nondiscretionary Bonuses

Bonuses that aren’t discretionary are announced to employees to encourage them to work more steadily, quickly, or efficiently, and are included in overtime pay.

Bonuses are typically promised or expected based on hours worked, production, or efficiency.

In order to calculate overtime with a nondiscretionary bonus, the bonus amount has to be factored into the employee’s regular rate of pay.

This adjusted regular rate is then used to calculate the overtime rate.

Discretionary Bonuses

Discretionary bonuses, on the other hand, are those given at the discretion of the employer and are not expected by the employee.

Overtime bonuses are not based on performance criteria and aren’t included in regular rates.

The employer decides whether to give a bonus and what the amount is, such as for special occasions like holidays.

Calculating Overtime with Bonuses

When a nondiscretionary bonus is paid, employers must retroactively recalculate the regular rate of pay for the period the bonus covers.

The bonus amount is divided by the total number of hours worked in the relevant period to find the increase in the hourly rate.

This increased rate is then used to recalculate the overtime pay owed.

Practical Implications

For employers, it’s essential to correctly categorize bonuses and accurately calculate the impact on overtime pay to comply with labor laws.

Employees should understand how their overtime pay is calculated, especially when they receive bonuses, to ensure they are compensated fairly.

In summary, California overtime pay is influenced by whether the bonus is discretionary or nondiscretionary. Due to this complexity, payroll practices need to be accurate and compensation rights and responsibilities need to be understood.

Salaried Employees and Overtime

Let’s now understand the overtime eligibility criteria for salaried employees in California, since not all are exempt. There are a few key factors that determine whether salaried employees can work overtime:

Exempt vs. Nonexempt Status

The primary factor in determining overtime eligibility for salaried employees is whether they are classified as exempt or nonexempt under the Fair Labor Standards Act (FLSA) and California labor laws.

Exempt employees are generally not eligible for overtime pay. These typically include employees in executive, administrative, professional, computer-related, and outside sales positions, who meet specific criteria related to their job duties and salary levels, as we mentioned above.

Salary Threshold for Exemption

To qualify as exempt, salaried employees must earn a salary above a certain threshold. This threshold is set by law and is subject to change, so employers and employees should stay informed about the current standards.

As of now, the minimum salary threshold for exempt employees in California is twice the state minimum wage for full-time employment.

Duties Test

In addition to meeting the salary threshold, exempt employees have to pass a duties test. The test is to see what the employee’s job responsibilities are.

Duties tests usually require that the employee’s primary duties are managerial, administrative, or professional, requiring discretion and independent judgment.

Nonexempt Salaried Employees

Salaried employees who do not meet the criteria for exemption (either because they do not meet the salary threshold or the duties test) are considered nonexempt.

Nonexempt salaried employees are eligible for overtime pay. Overtime is calculated based on their regular rate of pay, which is determined by dividing their weekly salary by the number of legal maximum regular hours (usually 40 hours).

Implications for Employers and Employees

Employers must carefully classify salaried employees to ensure compliance with overtime laws and avoid potential legal issues.

Employees should understand their classification and how it affects their eligibility for overtime pay.

In summary, whether a salaried employee in California gets overtime pay depends on their exempt or nonexempt status, which depends on their salary level and their job responsibilities. To ensure fair labor practices and compliance with state laws, it’s important for employers and employees to understand these criteria.

Employer’s Rights and Obligations

Under California’s labor laws, employers have a lot of rights and responsibilities when it comes to overtime. Let’s check them out:

Employer’s Authority in Scheduling Overtime

California employers can schedule overtime as needed. As long as the employees are compensated properly for overtime, employers can require them to work.

It’s okay for employers to mandate overtime, but they have to follow the legal limits on working hours to make sure employees don’t work excessive hours that pose health and safety risks.

Advance Notice and Scheduling

While employers in California aren’t legally required to give advance notice of mandatory overtime, it’s best practice.

To allow employees to arrange their personal schedules accordingly, employers should communicate overtime needs as early as possible.

Legal Requirements for Overtime Compensation

Employers are legally obligated to pay nonexempt employees overtime at the prescribed rates. This includes 1.5 times the employee’s regular rate of pay for hours worked beyond 8 hours in a day or 40 hours in a week, and double the regular rate for hours worked beyond 12 in a day or 8 on the seventh consecutive day in a week.

In addition, employers have to include certain types of bonuses in overtime calculations, like nondiscretionary ones.

Record Keeping and Compliance

For proper compensation, employers have to keep accurate records of all hours worked by employees, including overtime.

Overtime compensation laws have significant legal and financial consequences, like penalties and back pay.

Employee Consent and Refusal

While employers can require overtime, employees also have rights, including the right to refuse overtime in certain circumstances, such as health and safety concerns.

However, refusal to work overtime without a valid reason can lead to disciplinary action, including termination, depending on the employer’s policy.

In summary, California employers can schedule overtime and require it, but they must pay employees according to state laws and keep accurate records.

Employee Rights and Recourse

In California, employees have specific rights and recourse options if they are not paid the overtime compensation they are legally entitled to. Let’s see what to do if you don’t get paid for your overtime pay in California.

Steps to Take if Not Paid Overtime

  • Internal Resolution: Initially, the employee should attempt to resolve the issue internally. Talk to your supervisor or human resources about it. Occasionally, overtime isn’t paid because of a misunderstanding or clerical error.
  • Documentation: Keep detailed records of your hours worked, including overtime, and any communications about unpaid overtime. This documentation can be crucial in any formal dispute resolution process.
  • Company Policy Review: Review the company’s policy on overtime and wage disputes. Knowing the internal procedures can help you figure out what to do.

Filing a Wage Claim

Next, file a wage claim with the California Labor Commissioner’s Office, also known as the Division of Labor Standards Enforcement (DLSE). 

Basically, you fill out a form detailing the unpaid wages, including overtime, and provide any supporting documents.

A DLSE will typically schedule a conference or hearing after a claim is filed.

Procedures Following a Wage Claim

  • Initial Conference: The DLSE may hold a conference between the employee and employer to try to resolve the issue without a formal hearing.
  • Hearing: If the issue is not resolved at the conference, a hearing will be scheduled where both parties can present their evidence and arguments.
  • Order, Decision, or Award (ODA): After the hearing, the Labor Commissioner will issue an ODA, which is a binding decision regarding the wage claim.
  • Appeal Process: Both parties have the right to appeal the ODA in a California court.

Protection Against Retaliation

California law protects employees from retaliation by their employers for filing a wage claim or asserting their rights to receive overtime pay.

If an employee experiences retaliation, they can file a retaliation complaint with the DLSE.

Seeking Legal Advice

In complex cases, or if the employee is unsure about the process, seeking advice from a labor attorney or a workers’ rights organization can be beneficial.

To sum it up, California employees have clear steps to follow if they’re not paid overtime. They include internal resolution efforts, filing a wage claim with the DLSE, and understanding the procedures that follow. Employees are also protected against retaliation and have the option to seek legal advice to navigate these processes.

Retaliation and Employee Protection

In California, employees have legal protections against employer retaliation when they file wage claims or assert other employment rights. It’s crucial for employees to understand these protections so they can assert their rights without fear of retaliation.

Legal Framework Against Retaliation in California

California labor laws strictly prohibit employers from retaliating against employees who assert their rights, including filing wage claims, complaining about unpaid overtime, or raising concerns about other labor law violations.

Retaliation can take many forms, including termination, demotion, reduction in hours or pay, or any other adverse action that would dissuade a reasonable employee from making a complaint about their rights.

Protection for Wage Claim Activities

Employees are specifically protected when they file a wage claim with the Division of Labor Standards Enforcement (DLSE), participate in a DLSE investigation, hearing, or proceeding, or informally assert their rights to fair compensation, including overtime pay.

Filing a Retaliation Complaint

If an employee believes they have been retaliated against, they can file a retaliation complaint with the DLSE.

This complaint should be filed as soon as possible, as there are time limits for these claims (usually within six months of the alleged retaliatory act).

Investigation and Enforcement

DLSE investigates retaliation complaints and can order remedies if retaliation is found. Remedies can include reinstatement, reimbursement for lost wages and work benefits, and damages.

The process may involve a hearing similar to that for wage claims, where both the employee and employer can present evidence.

Employer Penalties for Retaliation

Employers found guilty of retaliation can face significant penalties, including fines and compensation to the affected employee for damages suffered due to the retaliatory action.

In severe cases, criminal charges may also be pursued against the employer.

Employee Rights Beyond DLSE Claims

Employees also have the right to pursue civil litigation against their employers for retaliation in court, which can provide additional remedies.

Creating a Safe Reporting Environment

Employers should create an environment where employees feel safe reporting violations or concerns without fear of retaliation. This means having clear policies and training for management and staff.

In sum, California provides strong legal protections to employees against retaliation by their employers, especially in wage claims and labor rights. With these protections, employees can seek what they’re legally owed without fear of losing their jobs or being treated unfairly. Both employees and employers should know these protections and what to do if they face retaliation.

Here are other important articles related to California:

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FAQ About Overtime Pay in California

1. What is the definition of overtime in California?

Overtime in California is defined as any hours worked over 8 hours in a single workday or over 40 hours in a workweek.

2. Who is eligible for overtime pay in California?

Nonexempt employees, who do not fall under the exempt categories such as executive, administrative, and professional roles, are eligible for overtime pay.

3. How is overtime pay calculated for hourly employees?

Overtime pay is calculated at 1.5 times the regular hourly rate for hours worked over 8 hours up to 12 hours in a day and for the first 8 hours on the seventh consecutive day of work. Hours beyond these limits are paid at double the regular rate.

4. Are salaried employees entitled to overtime pay?

Salaried employees are entitled to overtime unless they qualify as exempt based on their job duties and salary level.

5. How do bonuses affect overtime pay calculation?

Nondiscretionary bonuses must be included in the calculation of the regular rate of pay for overtime purposes, while discretionary bonuses are not.

6. What should an employee do if they are not paid for overtime?

Employees should first attempt to resolve the issue internally. If unsuccessful, they can file a wage claim with the California Labor Commissioner’s Office.

7. Can an employer require an employee to work overtime?

Yes, employers in California can require employees to work overtime, but they must pay the appropriate overtime rate.

8. What are the legal protections against retaliation for making a wage claim?

California law prohibits employers from retaliating against employees for filing a wage claim or asserting their rights related to employment laws.

9. What happens if an employee works unauthorized overtime?

Employees must be paid for all hours worked, including unauthorized overtime, but they may be subject to disciplinary action for violating company policy.

10. Are there any exceptions to the general overtime rules?

Yes, there are exceptions, such as alternative workweek schedules and specific rules for certain industries like agriculture.

If you have any questions, please leave a comment here, and our HR Specialist will respond as soon as possible.

HR Expert | Talent Management Enthusiast. You've found the right place! I'm Jose Sanchez, your expert HR guide with extensive experience in HR insight and talent management. I write about how businesses can thrive by nurturing and leveraging their talent. When I'm not immersed in HR, I love to explore the fascinating worlds of physics and psychology.

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