The X’s and O’s of California Overtime Compensation Requirements

What is the minimum wage in California?

In 2019, the minimum wage increased to $11.00 for smaller employers (up to 25 employees) and $12.00 for larger employers (larger employers).

By 2023, the minimum age for all employers will increase to $15.00.

The above also applies to tipped employees. In California, tipped employees are entitled to the full minimum wage for every hour worked.

Am I entitled to overtime in California?

How Does California Overtime Work?

In California, eligible employees must receive time and a half overtime if they work more than 8 hours a day or 40 hours in a week. This means you are entitled to “time and a half” – your usual hourly rate plus the 50% overtime premium – for every overtime hour you work.

After working 12 hours in a day, California employees must receive double the hourly pay per hour. This means that you are entitled to double your usual hourly rate for every overtime hour you work. 

If an employee works on a seventh day, that employee is entitled to time and a half for the first eight hours of work and double time for additional hours.

What are the California Overtime Requirements?

Not all employees are eligible for overtime, however. To be eligible to receive overtime payments, the employee must be 1) over the age of 18 or over the age of 16 and legally allowed to leave school to work; and 2) employed in a non-executive, non-administrative, and non-professional job.

Although not all employees are entitled to overtime, many employees are under the misconception that just because they are salaried, they are not entitled to overtime. There is no concrete rule that exempts salaried employees from receiving overtime pay. Instead, a series of tests should be applied on a case by case basis to determine if a person is truly exempt. Below are employees, salaried or hourly, who are exempt from overtime pay.

Example: Max gets an annual salary of $60,000 a year. To calculate her regular rate, you first take his total annual salary and divide it by the number of weeks in a year (52 weeks). $60,000 / 52 weeks = $1,153.85 salary per week. Then, you divide that number by the agreed upon number of hours your salary is intended to compensate you per week (not to exceed 40 hours). Here, Max typically works 50 hours a week, so we can assume the agreed upon number of hours per week is 40. So $1,153.85 / 40 hours = $28.85 regular rate per hour. Since Max worked 10 hours overtime, he will be paid time and a half ($28.85 x 1.5 = $43.28) for those 10 hours.

Am I Exempt from Receiving Overtime?

Executives: this is anyone who earns more than twice the minimum wage ($3,813.33/month for 2018) who also runs a company or one of its departments, and manages more than two employees with the power to hire them, review their work, and fire them.

Administrative employees: this is anyone who earns more than twice the minimum wage who job does not involved manual labor but requires special training and allows them to decide how and when work is performed with minimal supervision.

Professional employees: this is anyone who earns more than twice the minimum wage whose job is in law, medicine, dentistry, optometry, architecture, engineering, teaching, accounting, sciences (if it does not involve manual labor), and the arts (if their work cannot be measured by a unit of production) and allows them to decide who and when work is performed with minimal supervision.

Some employees who may otherwise be eligible for California overtime will not receive it because they work a shift pattern different from the standard five eight-hour days in a workweek (ex: four 10-hour days or three 12-hour days). Even though these shifts are over eight hours in length, employees only receive overtime once they work over 40 hours in any workweek.

When should California overtime be paid?

California overtime should always be paid to eligible employees who work more than eight hours in a workday, more than 40 hours in a workweek, or seven days in a row.

Employees should receive overtime pay in their next paycheck. This applies whether a manager has authorized the overtime in advance or not.

What are the remedies for overtime violations?

California Labor Code section 1194 provides back pay, interest, attorney fees and costs of suit.

Statute of Limitations: You have three years to bring unpaid wages action against your employer.

Helping You Protect Your Rights

If you are the victim of labor violations in California or have been sued for labor violations, please contact CTK Law Group for a free consultation. CTK Law Group can also assist you in preventing any labor violations with services such as drafting and reviewing employment contracts and employment handbooks.

The information provided in this article is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation.