Overtime Laws in California

In California, some employees are entitled to overtime pay when they work more than a specific number of hours in a day or week. Statutory, non-exempt employees are generally eligible for overtime compensation, but exempt employees are not. How much overtime pay someone might be entitled to receive depends on how long an employee works in a day and how many days they work in a week. Unfortunately, some California employers attempt to evade their responsibilities by failing to pay their employees the overtime wages they have earned. Because of this, many overtime claims are filed in the state every year, leading to numerous settlements and verdicts. In some cases, employers fail to pay overtime properly because they don't understand the wage and hour laws in California. In others, employers intentionally violate the laws. Both employees and employers need to understand these laws to avoid potential disputes, and employees shouldn't hesitate to seek legal help when they believe their employers have failed to pay them what they are rightfully owed.

Employers in California must follow both federal and state wage and hour laws that require the payment of overtime. These laws include the Fair Labor Standards Act, which is a federal law that mandates the payment of at least the federal minimum wage and overtime compensation, prohibits oppressive working conditions, and prohibits child labor. The state laws include Cal. Lab. Code § 510. There are also administrative regulations and court holdings interpreting these laws that employers must follow.

In some cases, the state and federal laws differ. When that happens, employers must follow the law that favors employees the most. For example, the federal minimum wage under the FLSA is $7.25 per hour, and it hasn't been increased for years. By contrast, California's minimum wage in 2024 is $16 per hour. Since California's law is more generous to employees than the FLSA, employers must pay them at least $16 per hour.

Similarly, the FLSA's overtime provisions are not as generous as those in California. For example, the FLSA requires employers to pay overtime pay at a rate of time-and-one-half the employee's regular hourly rate for each hour worked beyond 40 in a workweek. California's law also mandates overtime pay for all hours worked beyond eight in a workday and provides certain instances when employees must be paid double their hourly rate.

California's overtime rules include the following:

• Working more than eight hours in a workday - Must be paid 1.5 times the regular hourly rate for each hour beyond eight in a workday
• Working more than 40 hours in a workweek - Must be paid 1.5 times the regular hourly rate for each hour beyond 40 in a workweek
• Working a seventh consecutive day - Must be paid 1.5 times the regular hourly rate for each hour up to eight
• Working more than eight hours on a seventh consecutive workday- Must be paid two times the regular hourly rate
• Working more than 12 hours in a day - Must be paid two times the regular hourly rate

By contrast, the only overtime rule for the number of hours worked per day or in a workweek under the FLSA is that employers must pay an employee 1.5 times their regular hourly rate for each hour worked above 40 in a workweek. Federal law doesn't provide the right to overtime pay for working more than eight or 12 hours in a day or working seven consecutive days. However, since California wage and hour laws do provide these rights, employers must follow California's overtime rules.

While most workers in California are entitled to overtime pay, some are not. It's important to know the types of employees who are considered exempt from state and federal overtime laws. There are also a few types of jobs in which workers are ineligible for overtime.

Employees must meet specific criteria established under the law before they can be classified as exempt. Importantly, exempt employees must receive a regular salary instead of an hourly wage, and the total salary they are paid must be at least double what they would earn if they were instead paid the minimum wage. For example, since the California minimum wage is $16 per hour, this means an exempt employee must be paid a salary equal to double that. If you multiply 16 x 40, the product is $640. This means an exempt employee must be paid a salary of at least $1,280 per week or $66,560 per year.

In addition to minimum salary requirements, exempt employees must also have specific job duties outlined under the law. These duties are those commonly associated with white-collar jobs through which employees have significant authority and can work with minimal supervision. The following categories might allow salaried employees to be considered exempt:

• Administrative employees
• Executive employees
• Professional employees

However, just because an employee is given a certain job title doesn't mean they will be correctly classified as exempt. For example, a person who is given the title of assistant manager but does not have the authority to hire or fire workers might not be considered to be exempt. In that situation, they would be entitled to overtime pay under any of the previously above-listed circumstances.

In some cases, employers will try to classify an employee as exempt when they should be considered to be a non-exempt or statutory employee. Employers might do this when they misunderstand the law, or they might do so to try to avoid paying overtime compensation.

Another category of employees that can be classified as exempt is an outside salesperson. This is someone who is 18 or older, spends more than half of their time working away from the employer's principal place of business, and sells contracts, services, items, or the right to use facilities. They must also be paid a salary that meets the requirements as previously explained.

Unionized employers may or might not be correctly classified as exempt. Before unionized employees can be considered exempt, the collective bargaining agreement they negotiated with their employer must specifically define the agreed-upon wages, working hours, and working conditions under which they will work. All employees working under the collective bargaining agreement must also receive premium wage rates for hours worked beyond eight in a day, 40 in a week, or on the seventh consecutive day. Their regular pay rate must also be at least 30% higher than the state's minimum wage of $16 per hour.

Workers in certain specific jobs are also not eligible for overtime pay. These exceptions to the overtime rules have been issued as wage orders by the Industrial Welfare Commission and have special overtime rules.

Job categories that have an exception for the overtime rules include the following:

• Personal attendants
• Live-in housekeepers or nannies
• Camp counselors
• Managers of elder care facilities
• Providers of 24-hour childcare in residential settings
• Ambulance drivers/paramedics
• Agricultural workers
• The employer's immediate family members, including their spouse, children, or parents

Workers who are correctly classified as independent contractors are not considered employees and are thus ineligible for overtime compensation unless it is included in their contracts. However, many people who are classified as independent contractors are misclassified. Courts consider multiple factors when determining whether someone has been classified correctly as an independent contractor. Traditionally, independent contractors are their own bosses, have the right to decide when they work, can set their own fees, have more than one client, use their own materials, and provide expertise or skills that the company doesn't otherwise have. In the past few years, California passed new legislation that made the test for who can be classified as an independent contractor stricter. However, multiple companies have filed lawsuits and gained exceptions to this rule, including ride-share companies and others.

Even employees who are not legally entitled to work in the U.S. are eligible for overtime compensation. This means that a person who doesn't have a green card but works in California must still be fairly compensated. People who reside in other states must also be paid overtime under California's laws when they work in the state. However, those who only work for less than a day in California might not be entitled to overtime under the state's expansive rules.

If you believe your employer has consistently failed to pay you overtime wages that you were entitled to receive or that you have been misclassified as an exempt employee, you should consult a wage and hour lawyer at the law firm of Steven M. Sweat, APC. We provide free consultations and can provide an honest assessment of the viability of your case. Call us today to schedule a free case evaluation at 866-966-5240.