26 Mar 2014
What is the general rule on paying overtime in California?
In California, the general overtime provisions are that 8 hours of labor constitutes a day’s work, and employment beyond 8 hours in any workday or more than 40 per week or more than six days in any workweek is permissible if the employee is compensated for the overtime at not less than:
a. 1.5 times the employee’s regular rate of pay for all hours worked over 8 in one day up to and including 12 hours in any workday, and for the first 8 hours worked on the seventh consecutive day of work in a workweek; and
b. Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of 8 on the seventh consecutive day of work in a workweek.
How do you generally calculate the regular rate of pay?
1. If you are paid by the hour, the hourly rate is your regular rate of pay.
2. If you are paid a salary, the regular rate is determined as follows:
a. Multiply monthly earnings by 12 (months) to get the annual salary; b. Divide the annual salary by 52 (weeks) to get the weekly salary; and then c. Divide the weekly salary by 40 (hours) to get your regular hourly rate.
3. If you are paid by the piece or commission, either of the following methods may be used to determine the regular rate of pay for purposes of computing overtime:
a. The piece or commission rate is used as the regular rate and you are paid 1 & 1/2 times this rate for production during the first 4 overtime hours in a workday, and double time for all hours worked beyond 12 in a workday; or
b. Divide your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours.
How is overtime calculated if you earn different rates of pay in the same workweek?
If you are paid two or more rates by the same employer during the workweek, the regular rate is the “weighted average” which is determined by dividing 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 work 32 hours at $10.00 an hour and 10 hours during the same workweek at $8.00 an hour, the weighted average (and thus the regular rate for that workweek) is $9.52 This is calculated by adding your $400 straight time pay for the workweek (32 hours x $10.00/hour) + (10 hours x $8.00/hour) = $400) and dividing that number by the 42 hours you worked.
Are salaried employees entitled to overtime?
It all depends and usually requires an attorney to analyze. Generally, a “salaried” employee must be paid overtime unless they meet the test for “exempt status” as defined by federal or state law. This area of law can be complex. If you are being paid on a “salary” basis and are not being compensated for overtime hours, give us a call and we will be glad to discuss whether you have a potential claim.