CALIFORNIA OVERTIME
INFORMATION

CALIFORNIAOVERTIME INFORMATION

California Overtime Information

California requires employers to pay overtime to non-exempt employees as follows:

• One and one half times the employee’s regular rate of pay for all hours worked in excess of forty hours in a workweek or eight hours up to including twelve hours in any workday, and for eight hours worked on the seventh consecutive day of work in a workweek; and
• Two times the employee’s regular rate of pay for all hours worked in excess of twelve hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.

Click on the following link to review the California Labor Code statute that codifies the non-exempt employee’s right to overtime compensation.

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=510.&lawCode=LAB

The overtime law seems fairly easy to follow and, in fact, should be made easier by most employers having sophisticated, independent payroll companies that process their payroll. These companies have programs that are automatically set to pay employees the appropriate overtime rate when they exceed the above time thresholds. It is not the “how” that’s a problem for employers in paying overtime. It’s the fact of having to pay overtime that employer’s continually try to avoid, most times in ways that violate California law and result in substantial overtime wage loss to employees. In the paragraphs that follow, we explain the common ways employers try to cheat employees out of their overtime compensation.

Misclassification – Unlawful Salary and Unpaid Overtime

The classic way employers try to avoid overtime is to misclassify non-exempt employees, i.e., employees who are owed minimum wage and overtime, as exempt and pay them a salary. Employers save substantial sums of money under these pay structures and, if California’s laws were weak and ineffective, there would be no more hourly employees in the state. When paying a salary, employers typically can get one person to do the work of many. This is because, when wrongly paying employees a salary, the employer does not pay anything extra when employees work well over eight hours in a day and forty hours in a week. Misclassifying employees as exempt and paying them a salary results in substantial wage loss for employees in California.

The simple – although not the only – test for whether you are a non-exempt employee (i.e., owed minimum wage and overtime) and have been unlawfully paid a salary is whether you are expected to and/or do spend more than fifty percent of your time performing production related tasks as opposed to managing and directing. For instance, if you are a restaurant manager or assistant manager paid on a salary, your employer has unlawfully withheld overtime from you if you are expected to spend and/or do spend more than fifty percent of your time bussing and waiting tables, answering phones, handling cash at registers, preparing food, cleaning, etc.

If you have been unlawfully paid a salary for all hours worked, you have likely lost several thousand dollars in unpaid overtime compensation. Under California law, you can file a lawsuit against your employer for these substantial wage abuses, which, if you win, would entitle you all your unpaid overtime, liquidated damages – which doubles the amount you are owed in unpaid overtime – interest, and the costs incurred and the fees earned by your attorneys who represented you in your case.

If you have suffered from wage theft from an unlawful salary pay structure, please contact our office immediately, as there may be a limited timeframe for you to bring your claim for unpaid overtime wages. See also the following links for further information:

https://www.dir.ca.gov/dlse/FAQ_Overtime.htm

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=510.&lawCode=LAB

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=LAB&sectionNum=515.

https://scholar.google.com/scholar_case?case=13886815310570464921&hl=en&as_sdt=6&as_vis=1&oi=scholarr

https://law.justia.com/cases/california/court-of-appeal/3d/165/239.html

Unlawful Daily Rate and Unpaid Overtime

Daily rate pay structures invoke a host of problems for employees and result in substantial sums of unpaid minimum wages. See our page on Minimum Wage for more information. Fixed daily rate pay structures also lead to substantial sums owed to employees in California in unpaid overtime.

Fixed daily rate pay structures can only compensate for non-overtime hours. That is, fixed daily rate pay structures can only pay non-exempt employees for eight daily and forty weekly hours. Non-Exempt employees, i.e. those employees entitled to overtime compensation, who work beyond those time thresholds, must be paid overtime compensation.

If you have been illegally paid a fixed daily rate for all hours worked, you have likely lost several thousand dollars in unpaid overtime compensation. Under California law, you can file a lawsuit against your employer for these substantial wage abuses, which, if you win, would entitle you all your unpaid overtime, liquidated damages – which doubles the amount you are owed in unpaid overtime – interest, and the costs incurred and the fees earned by your attorneys who represented you in your case.

If you have suffered from wage theft from an unlawful daily rate pay structure, please contact our office immediately, as there may be a limited timeframe for you to bring your claim for unpaid overtime wages.

Non-Discretionary Bonus and Unpaid Overtime

Another common way employers violate California’s overtime laws is by not adjusting the regular rate of hourly pay for overtime work when they pay employees a combination of an hourly wage and bonuses. When an employer pays an hourly wage and what is called a “non-discretionary bonus,” meaning a bonus you are guaranteed when you reach certain goals, your employer must pay you more for your overtime hours than simply multiplying your regular hourly rate times the applicable overtime rate for all overtime hours you work.

Depending on how many hours you work in a day or a week, overtime pay is owed to you at either one and a half or two times your regular rate of pay. If you are paid a non-discretionary bonus – meaning a bonus that is not a gift, but is something you earned – in addition to hourly pay, your regular rate of pay is not your regular hourly rate. Instead, California law uses a unique calculation that increases your hourly rate for purposes of calculating your overtime pay. So, if you receive non-discretionary bonuses and your employer simply multiplies your regular hourly rate, say $15.00 per hour, by one and a half or two, you are being shorted on your overtime pay and should take action to get it back.

If you think you are being shorted on your overtime pay, contact our office and get a free unpaid overtime pay analysis. For more information on overtime rights in California, please also go to California’s Department of Labor Standards Enforcement (“DLSE”) web page:

https://www.dir.ca.gov/dlse/faq_overtime.htm

Piece-Rate Pay and Overtime

Many workers – like truck drivers and agricultural workers – are paid, not by the hour, but by formulas that measure compensation by the amount of “pieces” or tasks of work completed. For instance, truck drivers are often paid by the miles they drivers. Likewise, agricultural workers are oftentimes paid by the amount of produce they harvest per day. These pay structures are called piece-rate pay structures.

Aside from usually resulting in unpaid minimum wage, piece-rate pay structures usually result in substantial amounts of unpaid overtime. Just because you are not paid by the hour, does not mean you are not entitled to overtime just like every other hourly paid worker. If you are a piece-rate worker in California and you work over 8 hours in a day, or 40 hours in a week, you are entitled to overtime compensation at either 1.5 times or 2 times your regular rate of pay.

California has strict, but clear, guidelines for determining your regular hourly rate when you are paid a piece-rate, which many employers violate. Contact our office today to get a piece-rate pay analysis to see if you have been the victim of unpaid overtime from your piece-rate pay structure.