California's overtime law allows many employees in the state to seek overtime wages when working more hours. Overtime wages are a form of additional payment given to employees who exceed their working hours in one day or week. At Orange County Workers Compensation Attorney, we help workers from Orange County, retrieve these kinds of wages. Explained below is California's overtime law in detail.
Understanding California's Overtime Law
Under California's overtime law, employers should pay their workers higher wages for working hours exceeding the average working hours in a day or week. The payment of overtime wages helps compensate employees that spare their free time to work long hours. Overtime wages also act as a motivation for employers for them to recruit more workers and avoid making higher overtime payments. Overtime helps increase the employment rates in the state while saving thousands of workers the burden of excessive workloads.
California courts ensure the overtime law is in favor of workers rather than their employers. A court will consider resolving any ambiguities regarding this law in an employee's favor. In this case, you have a shot at seeking unpaid overtime wages when your employer violates this law.
Laws Governing Overtime Wages in California
Labor Code 510 of the California laws covers worker's rights to recover overtime wages. Besides this law, the Federal Fair Labor Standards Act (FLSA) also helps control the payment of wages in California. LC 510 offers more guidelines on protecting workers' rights than FLSA. Though these state and federal laws may differ, the unifying rule is that the law favoring an employee should be applied to any arising dispute.
When Should You Receive Overtime Pay?
Employers must disburse overtime wages before the payday for the next payroll period under Labor Code 204. They can only delay the overtime pay (instead of straight time wages) to the next payday since straight time wages must be paid on time. Employees earning semimonthly, biweekly, or weekly payments should expect to receive overtime for extra time worked. That is not more than seven calendar days from the last payroll period.
Unpaid Overtime Claims
Employment lawyers help employees make unpaid overtime claims, which form most of the complaints relate to California's overtime law. The State of California has the highest number of unpaid overtime settlements than any other state in the country. These complaints usually arise from the failure of an employer to understand the overtime laws. Workers should equally understand these laws, just like their employers, for them to collect any unpaid overtime wages.
Do You Have a Right to Seek Overtime Pay in California?
California's overtime law covers the rights of many employees working in the state, including salaried ones. The types of workers who do not have the right to overtime wages include outside salespersons, exempt employees, and workers in occupations with special overtime policies. Others include unionized employees who agreed to a collective bargaining agreement. Explained below are each of these exemptions:
An outside salesperson is someone who is at least 18 years of age selling items, contracts, the use of facilities or services. Outside salespersons spend more than half of their work hours away from their employer's business premises. Once you meet this criterion, you fall under the exempt employee category as far as the overtime law is concerned.
You can only qualify as an exempt employee if you meet various requirements set by the California laws. Exempt employees earn a fixed salary (instead of an hourly wage) that is twice the minimum wage. Since they work in "white collar" settings, their duties allow them to be discreet at work without close supervision. Categories of employment for exempt salaried employees include professional employees, administrative employees, and executive employees.
California's Industrial Welfare Commission enacted a series of regulations known as wage orders to exercise several exemptions to Labor Code 510. The wage orders allow special overtime rules to govern occupations such as camp counselors and personal attendants. Other occupations covered by the orders include managers for elderly homes, live-in household employees, ambulance attendants/drivers, and agriculturalists. The wage orders equally cover various 24-hour residential childcare providers and the spouse, parents, and children of an employer.
Exempt Unionized Employees
Labor Code 510 exempts unionized employees, who meet various requirements from recovering overtime pay. Your collective bargaining agreement must cover your wages, working conditions, and hours of work for you to qualify as an exempt unionized worker. The agreement must also cover premium wage rates for overtime hours you worked and a regular hourly pay rate that is 30 percent more than the minimum wage. California's overtime law will protect you if any of the agreement does not meet any of these requirements.
As a worker, you do not need to be a California resident to benefit from the protection of the overtime laws. You will still receive the protection even if you do not have legal work privileges (green card status) or residence in the country. It is unclear whether out-of-state employees briefly working within the state for less than a working day can seek overtime pay.
Requirements for Overtime Wages in California
The amount of overtime wages you (an employee) earn depends on the days you worked in one workweek and the length of each shift. California's overtime law requires employers to use a "time and a half" and "double time" overtime rates. "Time and a half" refers to one and a half times a worker's regular pay rate. "Double time," on the other hand, means twice a worker's regular pay rate.
You may recover your overtime wages on the "time and a half" overtime rate for working over 8 hours a day. Your employer could use this overtime rate if you worked over 40 non-overtime hours during your workweek and on the 7th consecutive day of your workweek. The "double time" rate applies to employees working more than 12 hours every workweek. It also applies to those working over 8 hours on the 7th consecutive day in their working week.
A workday refers to a 24-hour timeframe that starts at the same time a calendar day starts. A workweek, on the other hand, is a timeframe of seven consecutive days that begins on the same calendar day every week. Employers usually decide when a workweek starts. Once you know how your employer designates this period, it is easier to determine the owed overtime pay.
Your employer designates the workweek to begin on a Monday and end on a Sunday. If you start working on a Wednesday and proceed to work seven consecutive days, you will not have worked an entire workweek. You will not have the right to seek overtime in the workweek since you did not follow the timeline for a workweek designated by your employer.
Calculating a Worker's Regular Rate of Pay
Employees' regular pay rate helps determine overtime rates. You can calculate your regular rate depending on the amount of compensation you usually receive after working. Your hourly rate of pay will be your regular rate if you earn an hourly payment without any other compensation. If you work as a non-exempt salaried employee working 40 hours in every workweek, dividing your weekly salary by 40 will help determine your regular pay rate.
The salary you earn as a non-exempt employee will only compensate you for regular, non-overtime working hours. Once you start earning more than one type of compensation, the earnings will contribute towards the regular pay rate. The rule of thumb here is that wages and other forms of compensation earned by you help determine your regular pay rate. You may earn compensation from working in a given workweek without including overtime.
It is unlawful for employers to pay a higher hourly rate to their employees who have not worked any overtime hours. California's overtime law also cautions against paying a lower rate during workweeks in which employees work overtime. Reducing a worker's regular rate of pay is an illegal act.
What Does "Hours Worked" Mean?
Under Labor Code 510, employers must pay overtime wages to non-exempt workers for all the hours worked more than 40 hours in one week or 8 hours in one day. Workers should also seek the wages for "hours worked" on the seventh consecutive day of a workweek. When determining whether you worked in a given timeframe, workers’ compensation lawyers look at whether you are subject to an employer's control. They also consider whether you work or have a permit to work in a particular setting.
The hours in which you are subject to the control of an employer qualify as "hours worked." Your employer does not necessarily have to permit you to work during these hours for them to be considered as hours worked. The most critical element here is the control the employer has over your work and working schedule.
Can an Employer Adopt an Alternative Work Schedule for the Workers?
Though you have a right to overtime pay for extra hours worked in an 8-hour day or 40-hour week, your employer may adopt an alternative work schedule. The schedule may allow you to be at work for up to 10 hours a day without earning overtime pay. An alternative workweek is a schedule comprising of a maximum of 10 hours per day within a 40-hour workweek that does not attract overtime wages. Employment fields such as health care may adopt this kind of a schedule to apply to the workers.
Requirements for Adopting an Alternative workweek
It is unlawful for employers to administer alternative workweeks without considering various factors. California's overtime law requires them to draft a proposal and written disclosure for the plan. Employees also need to vote while the employer has the results of the voting process reported. The requirements to be met when adopting alternative workweeks are as follows:
- Proposing the Schedule
The employer needs to draft a proposal (a written agreement) for the alternative workweek schedule. Including a series of work schedule options or a single work schedule in the proposal will help the employees to understand it. Each employee has the right to choose one of the options included in the plan.
- Disclosing Information About the Schedule to the Employees
A written disclosure can help explain the potential impact of the proposal on the employees' benefits, wages, and working hours. The disclosure should summon the workers to a meeting, which is to take place at least two weeks before voting. In the meeting, the employees should discuss the effects of the proposed alternative workweek schedule.
- Allowing the Employees to Vote
The employer must facilitate a secret ballot voting process. Two-thirds of the workers must vote in favor of the alternative workweek schedule for it to take effect. The workers can vote at the worksite during their regular working hours.
The Division of Labor Standards Enforcement must receive the results of the voting process within 30 days following their release for approval. Employers have to report this information to avoid legal action. Once the DLE approves the schedule, the employer can adopt it to govern the workweeks of the given business premises. The employer will have to pay overtime wages to employees working more than 10 hours every workday or more than 40 hours in one workweek.
Should Your Employer Include a Bonus in the Regular Rate of Pay?
Bonuses can form part of the regular pay rate when calculating overtime pay if they are nondiscretionary bonuses. Your employer can include nondiscretionary bonuses in your regular pay rate when they serve as compensation for proficiency, production, or hours worked. The bonus may even act as an incentive for you not to leave your current employer. Most incentive bonuses usually come in the form of flat-sum bonuses.
Dividing the bonus by the maximum number of legal hours you worked during the period you earned bonuses can help compute overtime pay on a flat-sum bonus. The total number of hours worked during the period you earned bonuses will not be considered in this calculation. Your employer must pay you overtime on a given flat sum bonus at 2 times or 1.5 times the regular rate for any extra hours worked during the period you earned bonuses.
Overtime pay on a production bonus is computed differently since the bonus is a significant incentive for fostering production for every hour an employee works. Dividing the production bonus by the total number of hours worked during the period you earned a bonus can help calculate overtime pay on a production bonus. With this calculation, you can get the regular pay rate on your production bonus. Your employer needs to pay you overtime on this bonus at one time or 0.5 times the regular pay rate for all extra hours spent on work during the period you received a bonus.
Employers must pay their workers overtime on bonuses earned in one day/week at the end of a bonus-earning period. They should not include discretionary bonuses or money paid as holiday gifts when calculating overtime rates. Employers do not have to include them in the calculations for determining an employee's regular pay rate. Discretionary bonuses may include rewards for exemplary service, which are not dependent on efficiency or production at a work site.
Can Other Amounts be Excluded from Your Regular Rate of Pay?
Common exclusions in the regular pay rate include expense reimbursements and sums paid as gifts (for special occasions). Others include payments made when you are not performing any work because of an illness, a vacation, or a holiday. Premium payments for holiday, Saturday or Sunday work, and payment made by the employer for failing to offer sufficient work also is part of these exclusions.
Common Issues Surrounding California's Overtime Law
Ever since the California legislature enacted the overtime law, not all employers with non-exempt employees complied with the law. Several cases are on the rise regarding unfair compensation for overtime wages. The common issues surrounding this law are as follows:
Receiving Compensating Time in Place of Overtime Pay
California's overtime law cautions employers against requiring their non-exempt employees to take compensating time (paid time off) in the place of overtime wages. You have the right to recover overtime wages instead of compensating time. As an employee, you may request the paid time off if you have not garnered over 240 hours of compensating time. You can also seek compensation if you made a written request asking for the sum amount in lieu of overtime wages.
Overtime for Hours Spent "On-call"
"On-call" hours may include the hours your employer calls you into work on short or limited notice. You can only seek overtime pay for "on-call" hours, depending on the amount of control your employer has on your work during these hours. Your right to compensation would not take effect if you were carrying out personal activities at that period. Courts usually consider factors such as the frequency of the "on-call" hours and the time given for the short notice when determining whether "on-call" hours count as "hours worked."
Unauthorized and "Off-the-Clock" Work
As an employee earning hourly wages, you must track all "hours worked," which include overtime hours and hours spent on unauthorized or "off-the-clock" work. Your employer must pay you at a specific overtime rate for unauthorized work time resulting in overtime. You will not get any compensation for unauthorized work if you conceal information about hours spent on that activity from your employer.
Overtime for Working During Rest or Meal Breaks
Your employer must compensate you for skipping meals or resting times to work. If your work schedule exceeds the 8-hour day or 40-hour week schedule, after counting meal or rest breaks, your employer should pay you at your overtime rate. You cannot recover the wages if the employer relieves you of all obligations and duties during your rest or meal period. California's overtime law requires employers to give their workers a 10-minute paid rest period, which is to be included in the calculation of overtime pay.
Travel Time and Commutes
Time spent by you commuting from your house to the workplace is not part of a workday. Traveling, in this context, may include riding a bike, driving, or using a ridesharing program provided by your employer to go to work. The commuting time may count as "hours worked" if your employer made it mandatory for you to use the provided transportation. You may also include the travel time in your overtime pay if the trip to a farther site is necessary for a particular assignment.
Overtime for Preparing for Work
Tasks undertaken to prepare for a particular job count as "hours worked" under California's overtime law. The tasks need to be an indispensable and integral part of the job you are working on for this law to take effect. For instance, you have the right to overtime pay for setting up a machine or carrying out routine maintenance checks before operating the machine.
Handling Violations of California's Overtime Law
You have three options at hand if you work as a non-exempt employee who was not compensated for working overtime. The options include resolving the complaint with your employer and filing a lawsuit in a California court. Bringing a claim for penalties and unpaid wages with a government agency can also help your course. You have the right to hire an employment attorney to advise or assist you with ways to pursue any of these options.
If you decide to take legal action for unpaid overtime, you should choose whether to recover the wages under state or federal law. Though both laws allow you to pursue legal action, federal law (FLSA) allows the unpaid overtime amount to be doubled to punish the employer for failing to pay overtime. California's overtime law will allow a late payment penalty rather than allowing double damages. The facts of your case help determine whether you should file a lawsuit or an administrative claim or whether to seek a state or federal remedy.
Find a Reputable Employment Lawyer Near Me
As a non-exempt employee seeking a claim for your unpaid overtime wages, involving a lawyer will improve your chances of recovering the wages. Orange County Workers Compensation Lawyer targets clients looking to make claims like yours across Orange County, CA. Call us today at 949-423-3212 with details regarding your dues to seek legal assistance.