California Overtime Laws

What is Overtime

Most bonuses are required to be included in the employees’ regular rates. The only exception is for bonuses which are entirely “discretionary” with the employer. A government employer may choose to use a 40 hour work week or a 7 system at its option, and may use a 7 system for FLSA compliance purposes even if it actually pays its employees on the basis of 40 hour work weeks. To use a 7 system for FLSA purposes requires only that the employer establish such a system , and that the affected employees actually work on a schedule which repeats and recurs on some multiple of between 7 and 28 days. Which particular 7 threshold applies depends mostly on what the employees’ schedule is. For 7 systems, pay computations mostly follow the regular FLSA rules, with the “work period” being substituted for the normal “work week.”

What is Overtime

For present purposes, the discussion will assume employees are regular “40 hour per week” employees. These legislative changes came about after more than a century of worker rights activists and labor union groups calling for better working conditions. Workers in the 19th century regularly worked roughly 100 hours per week. It wasn’t until Henry Ford adopted five-day, 40-hour workweeks in his Ford Motor plants that the idea of “less work equals more productivity” took hold, though the U.S. government had instituted eight-hour days for its employees as early as 1869. Overtime has been law in the American workforce since the passage of the Department of Labor’s Fair Labor Standards Act in 1938. Though it initially ruled that overtime didn’t kick in until an employee had worked 44 hours in a week, the FLSA was amended two years later to reflect the move to a 40-hour workweek, lowering the threshold for overtime pay.

What Is Not Considered Overtime?

If you’re paid biweekly and work 45 hours one week and 35 hours the next, even though you worked a total of 80 hours over a span of two weeks, you’re eligible for five hours of overtime for the first week in the pay period. If you have a normal pay rate of $10 per hour and your company offers an overtime rate of time and a half, you’ll get $15 for every overtime hour worked. If you worked 50 hours in one week as opposed to your usual 40 hours, you worked 10 overtime hours (10 x $15), earning $150 in overtime pay. Add to your normal wages (40 x $10) to determine your total wages for the week ($400 + $150), which is $550. After reviewing the number of overtime hours you worked in a given week and your company’s overtime pay rate, you can calculate your overtime pay for a given period. To determine your total overtime wages, multiply the number of overtime hours by the overtime rate. Most national countries have overtime labour laws designed to dissuade or prevent employers from forcing their employees to work excessively long hours .

  • Your employer would owe you $10 per hour for the first 40 hours and $15 per hour for the 10 hours of overtime, for a total of $550.
  • In states where employees are subject to both state and federal overtime laws, you’ll receive overtime pay according to whichever offers the higher amount.
  • Although labor laws can vary from one jurisdiction to another, there are generally some people who do not qualify for overtime pay due to the nature of their work.
  • After reviewing the number of overtime hours you worked in a given week and your company’s overtime pay rate, you can calculate your overtime pay for a given period.
  • Overtime is calculated based on hours actually worked, and in this scenario you worked only 35 hours during the workweek.

So, if your normal rate of pay was $11.00 an hour, double-time pay would be $22.00 per hour. Double time is sometimes paid for working on federal holidays or when hours work exceeding the normal workday.

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The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship. If an employer-employee relationship exists, the FLSA will apply only if there is individual coverage or if there is enterprise coverage. One of the best ways to get control of your overtime is by using a schedulingtool like Sling.

When figuring out your employee’s overtime pay, break out your calculator and multiply their hourly rate by 1.5. You must pay at least the minimum for overtime, but you may decide to pay employees at a higher rate, and for overtime starting at lower hours per week. The Department of Labor does not require employers to pay overtime for night, holiday, or weekend work; these rates are determined by the employer or by union contracts. Overtime pay for hourly employees is the additional pay rate paid for working more than a specific number of hours in a week. The federal minimum for overtime for hourly employees is that the person ​must be paid one and a half times the regular hourly rate for work over 40 hours a week.

How To Calculate Overtime For Hourly Employees

Where monthly wages are comprised of basic wages and fixed allowances, 100% of the monthly wage is included when calculating overtime wages. If monthly wages also include non-fixed allowances and the basic wage plus the fixed allowance is less than 75% of the total wage, the monthly wage used to calculate overtime payments is 75% of total wages. A group rate for piece workers is an acceptable method for computing the regular rate of pay. In using this method, the total number of pieces produced by the group is divided by the number of people in the group, with each person being paid accordingly. The regular rate for each worker is determined by dividing the pay received by the number of hours worked. Divide your total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours. For each overtime hour worked you are entitled to an additional one-half the regular rate for hours requiring time and one-half, and to the full rate for hours requiring double time.

What is my “regular rate of pay” for figuring out how much overtime is owed? If you are paid on an hourly basis, that amount is the regular rate. When figuring the employee’s regular rate of pay for overtime purposes, all types of compensation need to be considered, not simply the normal wage. Some types of pay are includable in the regular rate of pay, while others are excludable.

Includable And Excludable Types Of Compensation In Regular Rate

Stated another way, the only number that matters is the time worked as of the last minute of the last day of the work week (when work time “vests”). How an employer chooses to schedule an employee during the work week is simply not an FLSA concern, since that does not affect the pertinent FLSA computations.

What is Overtime

For instance, if your weekly salary is $500 and you worked 50 hours in one workweek, you would divide 500 by 50, giving you a regular rate of $10 per hour. You use this regular rate to calculate your overtime pay just as you would with an hourly rate. Your employer would owe you $10 per hour for the first 40 hours and $15 per hour for the 10 hours of overtime, for a total of $550. My employer paid me for 43 hours of wages during the last workweek. Eight of those hours were paid as sick leave, as I was out ill for one day. Overtime is calculated based on hours actually worked, and in this scenario you worked only 35 hours during the workweek.

In some cases, hourly employees receive a non-discretionary, flat-sum bonus. (Non-discretionary bonuses reward time, skill, or they can serve as an incentive to stay in the job).

Can Everyone Get Higher Wages For Working Extra Hours?

We did receive time and a half for each hour worked over 40 which was a motivating factor. Kylee07drg July 28, 2012 @summing – It is tragic when employers start cutting corners when there is still so much work to be done. You would think that if business What is Overtime was flourishing like that, there should be plenty of money to go around. They’re paid on a salary basis at the “standard salary level,” which is currently 684 dollars per week . By agreement between employers and workers or their representatives.

The regular rate of pay includes a number of different kinds of remuneration, such as hourly earnings, salary, piecework earnings, and commissions. In no case may the regular rate of pay be less than the applicable minimum wage.

Save money without sacrificing features you need for your business. California Labor Code section 510; see California Labor Code 2661; see also Industrial Welfare Commission Wage Orders, California Department of Industrial Relations ; Labor Code 1173; see also the federal law, the Fair Labor Standards Act .

“Normal working hours,” as defined in federal law and the law of most states, means a 40-hour workweek. However, some states require overtime payment for hours worked in excess of eight in a single day. Your employer can pay you one and a half times the piece rate for each piece completed during overtime hours, or you can use the “regular rate” calculation to determine overtime pay by the hour. An employee working an inconvenience shift on an intermittent basis must have been assigned to that shift when the overtime service was rendered in order to have inconvenience pay included as part of total annual salary.

From there, you can divide the weekly rage by the number of hours worked to find the hourly rate. Keep in mind the FLSA’s overtime policies are the bare minimum. While some companies will pay their employees double time on holidays, others will kick into overtime at 30 hours instead of 40. The federal government assumes that all employees must be paid overtime if they work more than a certain number of hours in a week. There are two options for calculating overtime pay for salaried employees. Keep records of all overtime payments paid to employees to prove compliance with all FLSA requirements.

Even an employee who works 24 hours in one day would be owed no overtime if they work no more than a total of 40 hours in the rest of the workweek. Employees of manufacturing establishments must receive overtime after 10 hours in a day. Special overtime rules also apply to government agencies, public works projects, canneries and some hospital employees.

For example, in California, double the employee’s regular rate of pay must be paid for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek. An employer that banks overtime hours and subsequently pays for those hours must use the employee’s regular rate of pay at the time the overtime is calculated.

OeKc05 July 28, 2012 @John57 – It’s tough to have to decide between overtime pay and time with your family. I value my time off work so much that if given a choice, I usually choose not to work overtime so that I can be at home. The overtime rule doesn’t consider multiple week periods except rare circumstances . The overtime definition applies to a pay period of only one week. The employer is abiding by their state-specific overtime laws. This is overtime your employer doesn’t have to offer, but if they do, you may be forced to work these hours per terms in your employee contract. Guidance materials about overtime topics, including an Employment Law Guide, Qs & As, guide to overtime laws in the states, and more.

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Overtime is calculated based on the “workweek” which is a regularly occurring period of seven days. It could begin on any day or hour your employer chooses as long as it remains the same each week. The answer depends on the number of hours you worked during the workweek. If it’s more than 40 hours in the workweek, you should get overtime pay. In regard to point three, the standard overtime rate is 1.5 times the employee’s regular hourly rate (also called “time-and-a-half”). That’s why it’s vital to know what you pay each employee before calculating overtime.

You and your employer negotiate the specific details of this arrangement, such as how much time you can take off and when. Other categories can be exempted from the directive’s key provisions provided compensatory rest or appropriate protection is granted. These include employees who work a long way from home, or whose activities require a permanent presence or continuity of service or production, or who work in sectors which have peaks of activity. Examples include off-shore workers, security guards, journalists, emergency workers, agricultural workers, tour guides, etc.

Brockwell Smith

Brockwell Smith

Trusted Business Advisors, Counselors, and Litigators for Alabama.

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