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If you get hurt while on the job, your employer will likely offer you workers’ compensation. In California, most employers are required to carry workers’ compensation to cover your lost wages and medical expenses. 

An employee’s lost income is calculated by determining how much money the individual would have made during the time they were unable to work due to their injury. 

If you are on workers’ compensation, you are probably wondering if overtime hours are considered in this calculation. Mara Law Firm would like to shed some light on this topic.

Workers’ Compensation in California

Workers’ compensation is a form of insurance that covers an employee’s medical care and provides wage replacement when the employee is injured while on the job. Workers’ compensation may pay for temporary or permanent disabilities. This insurance is paid for by your employer.

In California, an employee on workers’ compensation is eligible to receive two-thirds (2/3) of his or her average weekly gross wage (pre-tax income). As of 2023, a worker on temporary total disability (TTD) will receive a minimum of $242.86 and a maximum of $1,619.15 per week. 

California Law on Overtime

California law requires employers to pay overtime to non-exempt employees. Overtime is intended to compensate workers for working on their off time. 

Employees must pay overtime to non-exempt employees as follows:

  1. One and one-half times the employee’s regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
  2. Two times 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 eight on the seventh consecutive day of work in a workweek.

For a salaried employee, the regular rate of pay is determined by:

  1. Multiplying their monthly pay by 12 (months) to calculate an annual salary;
  2. Divide the annual salary by 52 (weeks) to calculate the weekly salary; and
  3. Divide the weekly salary by 40 (hours) to determine the employee’s regular hourly rate of pay.

Overtime pay favors employees, not employers. When employers would benefit from hiring more employees, overtime disincentivizes employers from assigning employees excessive workloads. It is designed to give the employer a “nudge” to hire extra help to keep payroll costs down.

How Does Overtime Factor into Workers’ Comp Benefits?

In calculating an employee workers’ comp benefits, overtime may need to be taken into consideration. Although it is possible for a worker receiving workers’ comp to work overtime, an employer will often discourage it, since it can raise the employer’s already expensive premiums.

Do You Receiver Better Benefits if You Work Overtime?

Since workers’ compensation is based on your average weekly wage, if you are not expected to work more than 40 hours per week on a regular basis, overtime may not be factored into your benefits.

Even though your employer will be paying a higher premium if you work overtime, it will not necessarily increase your benefits. Since employers will be paying higher premiums to cover the costs associated with overtime, they may take a percentage of employee’s wages to cover the expense.

If you have been working overtime, an experienced employment lawyer will be able to assess whether you have been compensated fairly for your labor. 

Contact a California Employment Attorney Today

If you are receiving workers’ compensation, you need to understand how you are being compensated for lost wages. Having an attorney review your workers’ compensation benefits will allow you to make better-informed decisions. Contact us today to schedule your free consultation.

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This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney David Mara who has more than 20 years of legal experience in employment law.

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