Which Employees Get Overtime Pay? And How Is Overtime Calculated In California?

The majority of California employers are required to pay overtime wages to their employees. However, that does not stop many from trying to skirting the law and avoiding paying employees the wages they deserve. Overtime is a major expense for a company, and some businesses try to reduce labor costs by shorting workers on overtime pay. However, under the federal Fair Labor Standards Act (FLSA) and the California Labor Code, covered employers must pay qualifying employees overtime wages.

Calculation of overtime and double-time hours

In California, non-exempt workers are entitled to overtime pay at the following rates:

• More than eight hours a day: 1.5x an employee’s regular hourly rate
• More than 40 hours in a week: 1.5x an employee’s normal hourly rate
• More than 12 hours in a day: 2x an employee’s normal hourly rate
• First eight hours on the seventh consecutive day worked in a workweek: 1.5x an employee’s normal hourly rate
• More than eight hours a day on the seventh consecutive day worked in a workweek: 2x an employee’s normal hourly rate

These California laws are more favorable to employees than federal law, requiring all hours over 40 per week to be compensated at 1.5x an employee’s regular pay.

Which employees get overtime?

Certain types of employees are “exempt” from overtime requirements. If an employee is exempt, their employer does not need to pay them overtime wages. The theory behind exempting workers from overtime is that they are paid a higher annual salary than their non-exempt counterparts.

California employers sometimes attempt to misclassify workers as exempt employees to save overtime wage costs. Even if you have a job title that sounds exempt, like “manager,” you might not be exempt if you spend more than half your time doing tasks without a lot of independence or decision-making, such as filling out routine forms, stocking shelves, or helping customers. If you are unsure whether you are properly classified as exempt, you should contact an employment attorney.

Under California law, there are three broad categories of employees that are exempted from the overtime requirement:

• Executive employees: Any employee who 1) makes at least twice the minimum wage and 2) runs a company (or one of its departments) and regularly manages more than two employees with real input into hiring them, reviewing their work, and firing them.
• Administrative employees: Any employee who 1) makes at least twice the minimum wage and 2) has an office job or other non-manual labor that requires specialized training or knowledge and decides how the work is performed, with only minimal supervision.
• Professional employees: Any employee who 1) makes at least twice the minimum wage and 2) whose job is in law, medicine, dentistry, optometry, architecture, engineering, teaching, accounting, sciences or the arts, and which who is allowed to decide how their work is performed, with only minimal supervision.

Under California law, if an employer wants to classify an employee as exempt, it is the employer’s burden to prove that the classification is appropriate.

Often exemption status is a gray area. For example, it is not always black and white whether employees are independent or have decision-making authority to qualify them for an exemption. Even some very high-paid employees, like inside salespersons and tech support, are often entitled to overtime. If there is any doubt, it is best to consult an experienced employment attorney.

Employees wrongfully denied overtime pay could obtain compensation by filing a lawsuit against a current or former employer, usually up to four years after the violation occurred. 

Often, the employer’s refusal to pay overtime wages affects more than just one employee, in which case, employees may consider pursuing a California class action lawsuit against their employer. For example, in a class action, a former employee with unpaid wage may be able to recover wages for all the affected employees.

Anyone who believes that they have not been paid for the wages they have worked hard to earn should consult with a dedicated Bay Area employment attorney for immediate assistance. To learn more, visit https://bmcclaw.com/.