Understanding California Overtime Laws: Who Is Covered?

California overtime laws can be confusing, and it can be difficult to know if they apply to you. The laws are employee-friendly and are based on hours worked per day and per week. In California, overtime begins when an employee works more than eight hours per day or more than 40 hours per week. Employees who work seven days a week are also entitled to overtime on Sundays.

Once the overtime period begins, employers must pay their workers one and a half times their normal rate. This rate is often described as time and a half. If an employee works more than 12 hours in a day, the rate of overtime pay becomes double the normal rate, also known as double time.

There are some exemptions to California's overtime laws. For example, salaried employees in certain job roles are exempt, and there are special rules for workers in the healthcare and agricultural industries. It's important to review the specific laws and regulations to determine if overtime laws apply to your specific situation.

Exemptions to overtime laws

California's overtime laws contain a number of exemptions, which mean that the overtime law does not apply to a particular classification of employees. These exemptions include:

• White-collar jobs: To be exempt, employees must have primary duties that are executive, administrative, or professional. This generally means that 50% or more of their work time must be devoted to such tasks. They must also regularly exercise discretion and independent judgment at work and earn a salary equivalent to at least twice the state minimum wage for full-time employment.
• Computer professionals: This exemption applies to employees who work primarily in computer systems analysis, software or hardware design, or computer system or program design or development. They must be primarily engaged in intellectual or creative work that requires the exercise of discretion and independent judgment, be highly skilled and proficient in the application of highly specialized information to computer systems analysis, programming, or software engineering, and earn at least $55.58 per hour or $115,763.35 per year.
• Doctors and surgeons: To be exempt, doctors must earn at least $101.22 per hour or the full-time salary equivalent. This exemption does not apply to residents, interns, or doctors covered by collective bargaining agreements.
• K-12 private school teachers: To qualify for this exemption, a teacher must be primarily engaged in imparting knowledge to students, customarily and regularly exercise discretion and independent judgment, have a bachelor's or higher degree from an accredited university or valid teaching credentials, and earn a salary that meets certain requirements.
• Government and University of California employees
• Outside salespeople: The employee's primary duty must be making sales or obtaining orders or contracts for services or for the use of facilities, and they must customarily and regularly be engaged away from the employer's place of business.
• Commission-earning employees: This exemption applies to people who earn more than one and a half times the minimum wage and more than half of their compensation from commissions.
• Truck drivers: Interstate truck drivers and truckers transporting hazardous materials are exempt from overtime laws but not from meal and rest break laws.
• Union employees: There must be a collective bargaining agreement with explicit terms governing hours, wages, and working conditions. Pay must be at least 30% higher than the state minimum wage, and there must be a premium wage rate for overtime work.
• Old-age home managers
• Live-in domestic help
• Ambulance drivers and attendants
• Agricultural laborers
• Spouse, children, and parents of the employee
• Outside salespersons: To be exempt, employees must be at least 18 years old, spend at least half of their work time away from the employer's place of business, and sell contracts, services, items, or facility usage.
• Unionized employees under a collective bargaining agreement: Unionized employees are not entitled to overtime pay if their collective bargaining agreement provides for work hours, work conditions, and wages; a regular hourly wage that is 30% or more than the minimum wage; and wage rates for overtime hours.
• Independent contractors: Independent contractors are defined as those who perform a service under an employment contract that specifies a result for specified pay and maintain control over how the result is accomplished.
• Employees with an alternative workweek schedule: This is a written agreement between a group of employees and their employer that allows for workdays of up to 10 hours without overtime pay. To be valid, it must be approved by at least two-thirds of affected employees in a work unit by secret ballot.
• Certain healthcare industry workers: Under Wage Orders 4 and 5, healthcare employees under alternative workweek agreements receive time-and-a-half overtime for working shifts of more than 10 hours but no more than 12 hours in a 40-hour workweek, or more than 40 hours in a workweek. They receive double-time overtime for working shifts longer than 40 hours. Healthcare workers residing onsite can agree to a 14-day work period instead of a seven-day week and receive time-and-a-half overtime for working more than eight hours per workday and more than 80 hours in the 14-day period. Double-time pay kicks in if they work more than 12 hours in a workday.
• 24-hour childcare employees: Live-in nannies earn time-and-a-half overtime for working more than 40 hours in a week. Double time is required for working more than 16 hours in a shift or 48 hours in a workweek.
• Live-in household employees: Live-in employees must receive time-and-a-half for hours worked during required off-duty periods or on the sixth and seventh days of the workweek. Double-time kicks in when they work more than nine hours on those days.
• Non-live-in household employees: Non-live-in household employees do not get overtime on the seventh consecutive workday if their total weekly work hours do not exceed 30 and their total daily work hours do not exceed six.
• Ambulance teams working 24-hour shifts: There is no overtime for ambulance teams working 24-hour shifts who have contracted in writing to exclude up to three one-hour meal periods and one sleeping period of up to eight hours from their daily time worked.
• Certain resident managers: Resident managers at old-age facilities with fewer than eight beds are exempt from daily overtime. They should receive time-and-a-half overtime pay for working more than 40 hours or six days in a workweek, even in emergencies.
• Personal attendants at nonprofits: Personal attendants at nonprofit organizations get time-and-a-half overtime pay for working more than 40 hours or over six days in a workweek, even in emergencies.
• Ski industry employees: Ski resort employees during active ski months can agree to schedules of up to 48 hours per week before overtime applies. They must receive time-and-one-half overtime pay for working more than 10 hours in a workday or more than 48 hours in a workweek.
• Minors: Minors covered by Wage Order 12 earn time-and-

Calculating overtime pay

California's overtime laws can be confusing, with several different types of overtime and exemptions to consider. Here is a detailed guide to calculating overtime pay in California:

Step 1: Identify Exempt vs. Non-Exempt Employees

Firstly, it is essential to determine whether employees are exempt or non-exempt. In general, non-exempt employees are entitled to overtime pay, while exempt employees are not. Exempt employees typically have "white-collar" jobs, including administrative, professional, or executive duties, and they must earn a fixed salary that is at least twice the minimum wage for full-time work. Non-exempt employees, on the other hand, are usually paid by the hour and are entitled to overtime pay when they work extra hours.

Step 2: Understand the Different Types of Overtime

California has three types of overtime: weekly, daily, and seventh-day overtime.

• Weekly Overtime: This is the most common type of overtime and is earned when employees work more than 40 hours in a week.
• Daily Overtime: This is unique to California and is earned when employees work more than 8 hours in a day.
• Seventh-Day Overtime: This applies when employees work seven consecutive days in a row during an employer-defined workweek. Overtime is earned for up to 8 hours worked on the seventh day.

Step 3: Calculate Overtime Pay Rates

Overtime pay rates in California are typically "time and a half," which means one and a half times the employee's regular rate of pay. This rate applies to both daily and weekly overtime for hours worked over 8 up to 12 hours in a day or 40 hours in a week.

For hours worked beyond this, California also has double overtime. Double overtime rates are twice the employee's regular hourly wage and apply to:

• Daily Double Overtime: For hours worked over 12 in a single day.
• Seventh-Day Double Overtime: For hours worked over 8 on the seventh consecutive workday.

Step 4: Determine Your Workdays and Workweeks

To calculate overtime accurately, employers should establish the start and end times of the workday and workweek. A workday is defined as any consecutive 24-hour period, starting at the same time each day, and a workweek is any seven consecutive days, starting and ending at the same time. Employers can set different workdays and workweeks for different employees but must remain consistent.

Step 5: Count the Number of Hours Worked

Employees must track their work hours, including the start and stop times of their shifts and any meal breaks. These records are used to calculate the total hours worked each workday and workweek.

Step 6: Calculate Daily and Weekly Overtime Hours

Now, you can determine the daily and weekly overtime hours.

For daily overtime:

• Calculate 1.5 times the regular rate of pay for all hours worked over 8 up to and including 12 hours in a day.
• Calculate double the regular rate of pay for all hours worked over 12 in a day.
• For the seventh consecutive workday, calculate 1.5 times the regular rate for the first 8 hours worked and double the regular rate for any additional hours.

For weekly overtime:

• Calculate the total number of hours worked in the workweek.
• If the total is over 40 hours, subtract 40 to find the number of weekly overtime hours.

Step 7: Compare Daily and Weekly Overtime

In California, both daily and weekly overtime hours must be calculated to ensure all overtime is paid. Compare the total daily overtime hours (at 1.5 and 2 times the regular rate) to the total weekly overtime hours (at 1.5 times the regular rate).

If the daily overtime hours are equal to or more than the weekly overtime hours, pay according to the daily overtime rules. If the weekly overtime hours are more, ensure that all weekly overtime is paid in addition to the daily overtime, including any double-time hours.

Step 8: Determine the Regular Rate of Pay

Overtime pay is based on the employee's regular rate of pay, which is typically the hourly rate for hourly workers. For employees with different hourly rates in the same week, calculate a weighted average by dividing total earnings for the week by total hours worked.

For salaried employees, calculate the regular hourly rate by dividing the annual salary by 52 weeks and then by the maximum regular hours per week (usually 40 hours).

Step 9: Pay Overtime Wages

Finally, employers must pay overtime wages by the second regular payday following the overtime work. This gives employers extra time to collect funds for overtime pay.

By following these steps, employers in California can accurately calculate and pay overtime wages to their non-exempt employees.

Unauthorized overtime

According to California law, employers must pay employees for overtime, whether authorized or not, at a rate of one and a half times the employee's regular pay for:

• All hours worked over eight hours in a workday up to and including 12 hours.
• All hours worked over 40 hours in a workweek.
• The first eight hours of work on the seventh consecutive workday.

Additionally, employers must pay double the employee's regular rate of pay for:

• All hours worked over 12 hours in a workday.
• All hours worked over eight on the seventh consecutive workday.

However, if an employer has no knowledge of the unauthorized overtime work and the employee deliberately prevents the employer from obtaining such knowledge, the employer may not be obligated to provide compensation. Employers can establish a policy stating that overtime must be authorized and that violations will lead to disciplinary action.

It is important to note that California's wage and hour laws require employees to be compensated for any hours they are "suffered or permitted to work, whether or not required to do so." This means that employers are responsible for paying for work they knew or should have known about. As a result, employees cannot intentionally keep their employers in the dark about unauthorized overtime and then claim compensation later.

Mandatory overtime

In California, employers can require employees to work mandatory overtime, but there are limitations outlined in certain wage orders. Unionised workplaces may have different rules established through collective bargaining agreements.

Limitations on Mandatory Overtime

• Industrial Wage Order 13 (industries preparing agricultural products for market, on the farm) allows employers to require employees to work up to 72 hours per workweek. All work beyond this must be voluntary, and employees cannot be penalised for refusing.
• Industrial Wage Orders 4 and 16 (professional, technical, clerical, mechanical occupations, and certain onsite occupations in construction, drilling, logging, and mining) allow employers to require employees to work up to 72 hours per workweek. Additional overtime can be required in an emergency.
• Industrial Wage Orders 3 and 8 (canning, freezing, and preserving industries, and industries handling products after harvest) allow employers to require employees to work up to 72 hours in a workweek, followed by a mandatory 24-hour period off-duty.
• Alternative Workweek Schedules (AWS): Employees who work under a voted-upon AWS may have different hours before qualifying for overtime pay. Overtime still applies when employees work past the stated hours in the AWS.

Employees who work more than eight hours in a workday or more than 40 hours in a workweek are entitled to overtime pay. This is typically one and a half times their regular rate of pay for any hours worked beyond 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.

For any hours worked beyond 12 in a workday or more than eight hours on the seventh consecutive day of work in a workweek, employees are entitled to double their regular rate of pay.

Overtime pay waivers

In California, overtime laws are quite comprehensive and cover a range of workers, from non-exempt employees to minors. However, it is important to note that employees cannot waive their right to overtime pay. This means that even if an employee agrees to work for a lesser wage, they are still entitled to receive the full amount of overtime compensation owed to them. This is clearly outlined in California's Labor Code Section 1194, which states:

> "Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney's fees, and costs of suit."

This law exists to protect employees and ensure they receive fair compensation for their work. It is also worth noting that California's overtime laws do not apply to exempt employees, such as those with "white-collar" jobs and independent contractors.

Now, let's take a closer look at the overtime pay waivers and how they fit into California's overtime laws:

• Waivers for Exempt Employees: As mentioned, exempt employees do not fall under the same overtime laws as non-exempt employees. This exemption is based on the type of work performed and the employee's salary. Exempt employees typically hold "white-collar" jobs, such as administrative, professional, or executive roles, and they must earn a fixed salary that is at least twice California's minimum wage for full-time work. This salary threshold for 2024 is $66,560 per year or $1,280 per week. It's important to note that even exempt employees who are paid on an hourly basis must be paid for every extra hour worked, but their overtime pay may not be higher than their regular pay unless specified in their employment agreement.
• Waivers for Specific Industries: While most workers in California are entitled to overtime pay, there are certain industries and occupations that have special overtime pay rules or, in some cases, no overtime pay at all. These include outside salespersons, unionized employees under specific conditions, independent contractors, employees with alternative workweek schedules, and certain healthcare industry workers. For example, under Wage Orders 4 and 5, healthcare employees under alternative workweek agreements receive time-and-a-half overtime pay for working more than 10 hours but not more than 12 hours in a 40-hour workweek.
• Waivers for Minors: Minors who are 16 or 17 years old and are legally allowed to work instead of attending school are entitled to overtime pay in California. They receive time-and-a-half pay for working more than eight hours in a workday, more than 40 hours in a workweek, or more than six consecutive days in a workweek. However, this does not apply to 16 or 17-year-olds who are not legally required to attend school.
• Waivers for Agricultural Workers: Agricultural workers have slightly different overtime rules. Employers with 25 or fewer employees are required to pay overtime to agricultural workers after nine hours per day or 50 hours per week. Starting in 2025, regular overtime pay rules will apply to these workers. For companies with 26 or more employees, regular overtime pay rules already apply.
• Waivers for Live-in Household Employees: Live-in household employees are entitled to overtime pay under specific conditions. According to Wage Order 15, they must receive time-and-a-half pay for hours worked during required off-duty periods or on the sixth and seventh days of the workweek. Double-time pay applies when they work more than nine hours on those days.
• Waivers for Non-live-in Household Employees: Non-live-in household employees may not receive overtime pay on the seventh consecutive workday if their total weekly work hours do not exceed 30, and their total daily work hours do not exceed six.

Frequently asked questions