California Overtime Law 2021

What is Overtime Law in California?

California overtime law is the law that governs wages and hours of all the non-exempt employees working in the state of California. California is well known for its employee friendly stance and this law dictates when an employee must be paid wages for overtime.

Under California’s Overtime Law of 2020, employers are required to pay all the eligible employees working in the state of California additional pay for the work done in excess of the standard 8 hours or the standard 40 hours.

All the non-exempt employees who are qualified for overtime are paid 1.5 times the regular rate for all hours worked in excess of 8 hours in a workday, in excess of 40 hours in a workweek or for the first eight hours worked on the 7th consecutive day worked in any workweek. This is often termed as being paid ‘time and a half’.

Overtime rate of twice the employees regular rate of pay, which is often known as “double time”, applies to hours worked in excess of 12 hours in a workday or in excess of 8 hours on the 7th consecutive workday in a workweek.

Employers must follow both federal and state overtime rules. Federal overtime requirements are explained in the Fair Labor Standards Act (FLSA). In some cases, if differences exist between California and federal state overtime rules, then an employer must follow the rule that gives most benefit to the employee. Ideally, California laws, provide the most benefits to its employees, as it is well known for its employee friendly stance.

Defining “Workday”

A workday is typically 24 hours long. A workday can start at any time during the day or night, but the subsequent workday should start at the same time. The work day doesn’t have to necessarily start at 12 and end 24 hours later. For ex: if an employee starts a workday at 8AM, then the second subsequent workday wouldn’t start until 8AM the next day. Once the workday is established by the employer, they can only be modified if the change is permanent but not made to avoid overtime pay.

Similarly, a workweek in California is defined as 7 consecutive 24 hours period or 168 consecutive hours. A workweek can start at any time of any day as long as the time and day is fixed and recurring, but once 168 consecutive hours are up, so is the work week. Similar to workday, a workweek can only be changed or modified if it permanent and not to avoid overtime pay.

Employees working in the state of California are required to meet certain qualifications to be eligible for overtime rates. They are as follows:

1. Employees must be older than 18 years of age or 16 if they are legally permitted to leave school for work
2. Employees must be working in a non-executive role. In California, an executive role is defined as someone who directs the work of 2+ employees, who exercised discretion and judgement, who can hire or fire other employees. To know detailed information on executive roles as defined by the state of California, click here.
3. Employee must be in a non-professional role. Visit the department of industrial relations website, which defines a professional role in detail.
4. Employees must also not fall in any other exemptions as mentioned here

Under California’s overtime law 2020, employers should calculate overtime pay based on the regular rate of pay and not the hourly wage. The regular rate of pay includes the hourly pay as well as other types of compensation including commissions, production bonuses, piecework earnings and the value of meals and lodging.

The amount of overtime depends on the number of days an employee has worked in the workweek and the length of his or her shift. For example: If the employee’s regular rate of pay is $10 an hour, then the standard overtime pay would be $15 an hour in the overtime period and if the employee reach the qualifications for double overtime, the pay would be $20 an hour.

If the employee receives two different rates in a workweek and if he is entitled for overtime, then the overtime law requires that the employer takes the average of the two rates as the regular rate and pay 1.5 times of it.

Many employers and employees get to know about California Overtime Laws by word of mouth due to which a lot of misconceptions have evolved. Some of the most common ones among them are:

1. Salaried employees are not entitled to overtime: This is one of the biggest misconceptions and a huge myth about overtime law in California. Earning overtime is not dependent on how an employee is paid for his or her work. There may be some cases, where certain employees may not be getting paid for overtime because they meet certain exceptions, but being paid salary in itself is not an exception.
2. Professional employees are not entitled to overtime: This misconception is due to the term “professional” used in the Overtime law which states that they are not qualified. It just means anyone who works as a doctor, lawyer, attorneys, CPA’s, architects, etc are not qualified. But, there are other professional jobs like insurance agents, computer programmer and other office workers qualify for overtime.
3. Travel time doesn’t count towards overtime: Here, employees are not entitled to pay for their normal commute to and from work. However, if they are travelling from workplace to other workplace then they are entitled to overtime. Employees are also entitled to pay towards travel if the employer sent them on a company trip. All the time spent travelling out of town, be it driving to and from the airport or riding on train is considered as work time. Here it doesn’t matter if the travel was done on weekends or at night.

There may be industry specific overtime limits. Make sure to check the Industrial Welfare Commission Wage Orders, to understand if there are any overtime limits.

Frequently asked questions on California Overtime Laws:

1. Can overtime laws be legally imposed?
1. California law does not allow employers to penalize it employees if they refuse to do overtime work. As long as the overtime wage laws are adhered to, the employers have the right to dictate the work schedule and the hours worked by their employees.
2. Can you terminate your employee for refusing to work overtime?
1. Yes, in case the employee refuses to work overtime, employers have the right to fire them as they are not prohibited from penalizing their employees. Terminating an employee because he or she doesn’t work overtime is not considered discrimination.
3. How many hours is full time employment?
1. A full time employment is usually considered between 30 to 40 hours of work done in a week or 130 hours of work done in a month. If you work for over 40 hours in a week, both full time and part time employees are eligible for overtime pay.
4. Is extra pay required for weekend or night work?
1. According to the Department of Labor Law, extra pay for working on weekends or at night depends on the agreement between the employee and the employer. However, the FLSA does not require extra pay for night or weekends.
5. Can an employee waive his or her right to overtime compensation?
1. No, an employee cannot waive his or her right to overtime compensation. Under California overtime law, it is mandatory for employer to pay its employee overtime compensation notwithstanding any agreement to work for lesser wages.
6. What to do if my employer doesn’t pay me my overtime wages?
1. Under such circumstances, you can file a wage claim with the Division of Labor Standard Enforcement office. Additionally, you can also file a lawsuit in court against your employer to recover your lost wages.