Overtime Pay Laws in California: FAQ

Brad Nakase, Attorney

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California law requires overtime pay for overtime work. Getting overtime means you get paid 1.5x the normal rate you get paid at. This extra pay is only possible to receive when you work over 40 hours over the course of a week. This also applies if you work over eight hours in a single day. By law, a day of work is when you work eight hours. Anything beyond working six days in a given week is also considered to be overtime work.

There are a few eligibility requirements for receiving overtime. You must be a nonexempt worker that is at least 18 years old. If you are under 18, you have to be at least 16. Furthermore, you are not subject to going to school or subject to any restrictions when it comes to working. If all of these eligibility requirements are met, you must be given overtime by your employer.

Overtime is 1.5x the normal rate you get paid at. The hours you work have to be over eight hours within a 12-hour workday. They also have to be the first eight hours on the seventh day of working within a given week. Also, overtime increases to being 2x the normal payment rate when you work over 12 hours in a given day. You also get twice the amount of pay when you work over eight hours on the seventh consecutive day of working.

Although the overtime law must be adhered to, there are several exceptions. These exceptions are called “exemptions” and emphasize certain types of employees are not subject to receiving overtime.

What Is the Normal Rate of Pay and How Is It Determined?

The normal rate of pay is what you usually get for the work you do for an employer. This could be either a salary, hourly wages, commissions, or some other method of payment. Of course, this rate of payment will have to equal, or be above, the minimum wage. This normal rate of payment maxes out at eight hours per day and 40 hours per week. This maximum can also be swayed by how many consecutive days you work.

There is another method of ascertaining how much is the maximum allowed time to work without overtime. This entails working four days for 10 hours each day, or three days for 12 hours each day. The end result is based off of a 40-hour workweek.

Whatever agreement is made between an employee and employer, it has to be for less than the legal limit for normal hours. You may agree to work for 35 hours in a given week, but that does not mean you will get overtime if you work more than that, but less than 40 hours. The exception is if you work over than 8 hours in a single day. You will still get paid for the time you worked if it is less than 40 hours. However, it will be at your normal rate of pay.

How the Normal Rate of Pay Is Calculated

To help illustrate how the regular payment rate is calculated, here are a few examples.

  1. When you get paid by the hour, the amount you make is the normal rate of pay.

  2. When you get paid with a salary, your normal rate of pay is calculated by taking a few things into account. The monthly amount you get is multiplied by 12 months. This results in discovering the annual salary. The yearly amount you earn is divided by 52 weeks. This results in finding out the weekly salary. The weekly amount is divided by the number of legal normal hours you are allowed to work, by 40. This nets you the normal hourly rate.

  3. When you are paid commission, there are other ways of determining when you would get overtime. For instance, your regular rate would be the rate at which you receive commission. You will have to be paid 1.5x your normal rate for whatever you provide within the first four hours of overtime on a given day. This becomes 2x the your normal rate of pay when you work over 12 hours in a given day. You would have to divide the total amount you make during the week. This could include the number of overtime hours you worked.

  4. When there is a group of workers paid for piecemeal work, a group rate can be used to determine the regular rate of pay. To make the calculation, the total amount of pieces produced by everyone in the group gets divided by how many people there are in it. Every single person is paid what they are owed. The normal rate for individual workers is ascertained by dividing the amount they get by how many hours they worked. The normal rate of payment must be higher than what the minimum wage is.

  5. When you perform piecemeal work and are paid two or more rates, the normal rate is calculated differently. If you get paid by the same employer over the course of the week, a “weighted average” is calculated. You divide the total of what you made by the total time you worked in a given week. This would also include hours worked overtime.

Does an Employer Have to Pay for Overtime If an Employee Worked Overtime Without Their Approval?

Yes, they do. In the state of California, employers must pay overtime. This includes whether they gave their permission for an employee to do so or not. This rate will be 1.5x an employee’s normal rate of pay, in any case. As long as an employee worked over eight hours within a 12-hour workday, they get overtime. This also includes an employee working over six days consecutively within a week. Any time they work beyond 12 hours in a given day will be paid 2x their normal rate.

Although an employer is required, by law, to pay for overtime, they have a right to discipline one of their workers after the fact. Furthermore, an employee is not allowed to hide the fact that they worked overtime from their employer. Employers have to maintain precise time records for all employees working for them. They are required to pay for the correct amount of time their employees work for them.

Are Bonuses Included in the Normal Payment Rate to Determine Overtime?

Yes, they are. The bonus would have to be a non-discretionary one. If so, it is included in any determination of a normal payment rate to figuring out how much overtime is due.

Bonuses provided as incentive also include flat sum bonuses. In order to figure out how much overtime is due when a flat sum bonus is involved, another calculation must be made. You must divide the bonus by the total number of normal hours permissible by law to be worked in a bonus-earning period. This total is not the total number of hours worked within a bonus-earning period. The end result of this math is the normal payment rate on flat sum bonuses. The rate has to be 1.5x or 2x the normal rate to ascertain the overtime rate.

There are different rules regarding production bonuses. These are bonuses provided to incentivize an employee to boost production while working. To figure out the overtime for a production bonus, the bonus needs to be divided by all the hours worked within the period when a bonus was earned. This nets you the normal payment rate for this type of bonus. The amount of overtime you will receive is 0.5x or 1x the normal rate within the eligible period. This overtime will have to be paid out either daily or weekly. It also has to paid within the pay period coming after the period of when the bonus was earned.

There is a third type of bonus, but it is not eligible for overtime payouts. This is the discretionary bonus. This includes when something is a payment in the form other than legal tender. Gifts, tips, and other things fall into this category. These are not tied to how many hours you work or how well you work. This type of bonus will not be eligible to receive any overtime.

What Payment Types Are Not Included in Normal Payment Rates?

There are a few different payment types not included within the normal payment rates. For example, gifts for special occasions are not included. Also not included are payments made during times when work was not conducted. These include the following:

  • Gifts for special occasions
  • Expense reimbursements
  • Payments for time not worked, such as vacations, holidays, and sickness
  • Inability of an employer pay for enough work
  • Extra pay on the weekends
  • Discretionary bonuses

Does an Employee Making a Salary Get Overtime?

This would be dependent on a few things. An employee making a salary has to receive payment for working overtime, unless they are exempt. This exemption would be stated within federal and state law. An employee would also potentially be exempt from getting overtime if it is stated within certain sections of California’s Labor Code or an Industrial Welfare Commission (IWC) wage order.

Is an Employer Allowed to Make an Employee Work Overtime?

Yes, they are allowed. Employers are allowed to create work schedules where they ask an employee to work overtime. They have the authority to terminate the employment of any workers working for them if they refuse to work overtime.

There is a situation where an employer is barred from disciplining their employees. If someone working for them refuses to work on the seventh day of a workweek, they have a right to refuse. Furthermore, they may get penalized for not allowing that employee to have a day off to rest. However, that employee is able to personally decide to not rest on the seventh day, if they choose to do so.

Do You Get Paid Overtime for a Sick Day If It Leads to Being Paid for 48 Hours?

No, you do not. You may work 40 hours within a workweek, but then take a sick day within that week. If so, you get paid your regular rate. This would come out to getting pay for 48 hours at your normal rate of payment. This is because overtime is determined based on how many hours you actually worked. Whether you take a sick day, or are not working because of a federal holiday, you end up with the same result. You may have more than 40 hours at the end of your workweek getting paid for. However, if you only worked for 40 hours, you get no additional overtime pay.

When Must Overtime Be Paid Out?

Overtime has to be paid prior to, or on, the payday of the following normal payroll period after when overtime was earned. Time actually worked is required to be paid within the pay period of when those hours were worked. Overtime payment can be postponed into the next pay period, but no further than that.

Is an Employee Allowed to Forfeit Their Right to Overtime?

No, they are not. In California, overtime is required to be paid, regardless of any agreements an employee may have made with an employer. Even if there is such an agreement, an employee can recoup the overtime they were supposed to get. They can file a wage claim or bring a lawsuit up against their employer.

Is There Anything You Can Do If an Employer Withholds Overtime Pay?

Yes, you can. You have the option of filing a wage claim with the office of the Labor Commissioner. You can also file a lawsuit against your employer, so you can recoup any wages owed to you. In the case that you no longer work for an employer, you can also file a claim. However, it will have to be within the statute of limitations, which is three years.

What Steps Do You Take After Filing a Wage Claim?

Once you are done filing your wage claim with the Labor Commissioner’s Office, it will get sent to the Deputy Labor Commissioner. This individual will ascertain how to move forward. They will base their determination given what the circumstances surrounding the claim are. There are three routes which a wage claim can take. It can be referred to a conference, or referred to a hearing, or dismissed entirely.

When the Deputy Labor Commissioner decides to hold a conference, both the employer and employee get an official notification by mail. This notice will include the day, time, and location of the conference. Its purpose is to ascertain how valid the claim is. It will also be determined whether the wage claim can get resolved without moving on to a hearing. If there is no resolution within a conference, then the claim has to go to a hearing.

Once it goes to a hearing, the employer, employee, and any witnesses, will testify under oath. The entire event is recorded. After the hearing is over, an Order, Decision, or Award (ODA) will be served.

Both the employee and employer both have the right and option to appeal an ODA. If either one of them chooses to do so, the wage claim gets moved to a civil court. This entity will conduct a trial. In it, both the employer and employee will get to bring forth evidence and witnesses. All of the evidence and testimony that appeared at the hearing will be set aside and not considered by the court. If an employer appeals, the DLSE can represent an employee if they do not have the money to hire their own attorney.

What to Do When You Prevail in a Hearing But Your Employer Refuses to Pay or Appeals?

When the result of a hearing is in your favor, without an appeal, you are usually not going to deal with any other issues. However, sometimes you will have a resistant employer that refuses to pay what is owed to you. In this sort of situation, the Division of Labor Standards Enforcement gets the court to place the Order, Decision, or Award as a judgment against that employer. A judgment of this kind holds the same power as anything a court would decide. You have the option of getting the judgment on your own or asking the Division of Labor Standards Enforcement to get it for you.

What Do You Do When an Employer Retaliates Because You Said You Would File a Wage Claim?

In the event that an employer is retaliating or discriminating against you, there is an official action you can take. They are not allowed behave in this way at all. They may even attempt to terminate you because you filed a wage claim, or said you would. What you can do is file an official complaint of discrimination or retaliation with the office of the Labor Commissioner. You also have the option of suing your employer.

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Legal Reference:

Overtime in CA