California Overtime Law in 2024: All You Need To Know
The California overtime law dictates how much an employer must pay for hours worked beyond regular work hours. It provides strict guidelines regarding who is entitled to overtime pay and the conditions under which employers must pay overtime wages. Understanding and complying with these provisions will help your business avoid hefty penalties and fines.
Overtime law in California doesn’t just concern legal compliance it also provides fair compensation for all employees.
This in-depth guide will highlight what the overtime law in California states, including who is eligible for overtime pay, how much the overtime rate is, and the consequences associated with violating overtime regulations. We’ll also show you how to compute the rate of pay for different classes of employees.
Important Note on Federal Overtime Updates: Effective July 1, 2024, the federal overtime salary threshold has increased to $844 per week, and it is scheduled to rise again to $1,128 per week on January 1, 2025. While California has a higher threshold, these major federal updates may still impact employee classification. Review your practices and consult advisors if needed.
What Are The Overtime Rules in California?
The California overtime law requires employers to pay additional wages for the hours employees work beyond their regular daily or weekly limit. California’s overtime law states that non-exempt employees may get overtime pay if they work more than:
- Eight hours in a workday in a five-day workweek (10 hours in a four-day “alternative week” or 12 hours in a three-day “alternative week”)
- 40 hours in a workweek
- Six days in any workweek
What Constitutes a Workday and Workweek in California?
According to the Department of Industrial Relations in California, a workday is defined as “any consecutive 24-hour period beginning at the same time each calendar day.” The 24-hour period may begin at any hour of the day but must remain consistent.
A workweek in California constitutes seven consecutive 24-hour periods. It is a fixed and regularly recurring period of 168 hours that starts on the same day and time every week. California employers are free to establish the time and day when their company workweek begins.
Other California Overtime Law Provisions to Consider
Employers must understand all facets of California’s overtime law. Some stipulations you must be aware of include:
Do I Have to Compensate Employees for Unauthorized Overtime in California?
Yes, you must compensate employees for overtime worked, even if it wasn’t authorized.
According to the California wage and hour law, employers must compensate their staff for any overtime hours they “suffered or permitted” to work whether or not they were required. The California Case Law clarifies that “suffer or permit” refers to any work the employer knew or should have known about.
Can I Require Employees to Work Overtime?
Yes, the California overtime law permits employers to create work schedules as they see fit, even if that includes requiring mandatory or “forced overtime.”
The law further gives employers the right to discipline – including firing – employees for refusing to comply with scheduled overtime. However, you cannot penalize an employee for refusing to work on the 7th day of their workweek.
Keep in mind, this provision of the overtime law could soon change if the proposed “Right to Disconnect” bill is passed. If the bill is implemented, employees will have the right to refuse to work overtime. Be sure to bookmark this guide to stay on top of new developments regarding this bill.
What Is the Longest Shift Employees Can Legally Work in California?
There isn’t a legal limit on the number of hours a California employee can work in a day. The California overtime law only caps regular work and overtime hours. There’s no limit regarding the number of double-time hours an employee may work in a day.
However, the lack of a shift limit doesn’t give employers the license to let employees work long hours. Employees that work extended shifts are prone to burnout as well as mental and physical fatigue. These conditions ultimately decrease productivity and negatively impact employee morale.
Who is Eligible For Overtime Pay in California?
While the California overtime law ensures employees are fairly compensated for working extra hours, the law doesn’t apply to everyone. Overtime provisions only apply to non-exempt workers who are:
- 18 years old or older
- Minors (16 or 17 years old) who are not prohibited from engaging in work or are required by law to attend school
Note: Non-exempt status means the employee is covered by the Industrial Welfare Commission Orders. However, some employees with non-exempt status may be “excepted” or “exempted” from California overtime laws.
California Overtime Exemptions
Exemption means that the California overtime law doesn’t apply to a specific group of employees. Examples of workers who are exempted include:
- Administrative, Executive, and Professional employees
- Outside salespersons
- Motion picture projectionist
- Professional actors
- Commercial fishing boat crews
- Some airline employees
- Taxicab drivers
- Independent contractors
- Employee in the computer software niche
In addition, employees who enter into a collective bargaining agreement under the Railway Labor Act are exempt. Read the California exemption guide for more details.
California Overtime Exceptions
An exception means that the employee is entitled to overtime pay, but the conditions of eligibility differ from what is stated in California's overtime law.
For example, while employers with 26 or more agriculture workers follow the California overtime law, those with 25 or fewer workers play by different rules. Employers with 25 or fewer employees must compensate agriculture workers for working over 9 hours per day or 50 hours per week.
Other examples of excepted employees include:
- Employees in the healthcare industry
- Camp counselors
- Personal attendants in non-profit organizations
- Resident managers in care homes
- Ambulance drivers and attendants
- Sheepherders
The exceptions also extend to employees with a valid adopted alternative workweek schedule.
The California law is specific on how to apply overtime pay for each of these classifications of employees. Check out California’s overtime exception guide for further details.
It’s important to note that the Fair Labor Standards Act (FLSA) explicitly covers specific jobs that would otherwise be exempted. Examples of overtime protection include all first responders like paramedics, police officers, and firefighters. Other professions that endure long work hours, such as practical nurses and paralegals, are also protected under the FLSA.
Are Salaried Employees In California Entitled to Overtime Pay?
Yes, full-time or salaried employees are entitled to overtime pay if they meet one of the following conditions:
- They don’t meet the exempt status defined by federal and state laws
- The California Labor Code provisions or the Industrial Welfare Commission wage orders on wages, hours, and working conditions do not exempt them from overtime
Misclassifying employees can lead to overtime law violations and penalties of up to $15,000 per violation. If you have doubts about your employees’ eligibility, reach out to employment lawyers or labor consultants well-versed in California labor laws.
How Much Is Overtime Pay in California?
The overtime pay rate in California is equal to half of the employee’s regular rate of pay. Overtime applies when an employee works over 8 to 12 hours in a single workday or over 40 hours in a workweek. The same overtime rate applies for the first 8 hours worked on the seventh consecutive day of work.
Overtime law also requires employers to pay employees two times their regular rate of pay for hours worked over 12 hours in a workday and over 8 hours on the seventh consecutive workday of the week.
Remember that “hours worked” isn’t limited to time spent on the job. Hours worked may include the following:
- Meal break — when an employer asks, requires, or allows an employee to work during their meal break
- Rest break — The 10-minute rest break should be considered when calculating “hours worked” because it’s a paid break
- Commuting — If the employee must travel from the office to a job site or if it’s mandatory for workers to travel by employer-provided means
- Job preparation — If the preparation time is pertinent to an employee’s job
- On-call period — This should also be included in “hours worked” unless the employee has enough time to tackle a shift when called on or is free to engage in personal activities
Given the complexity of calculating employee overtime and double time—factor in work hours, holidays, and regulations—it's crucial to leverage technology to assist you with tracking. An app like Timeero enables you to accurately track employee time and breaks to ensure fair compensation and full compliance.
We’ll show you how Timeero simplifies overtime tracking farther along in this article. First, let’s take a closer look at how to calculate overtime in California.
How to Calculate Overtime in California
To calculate overtime, first determine the employee’s regular rate of pay. which is equivalent to their total earnings divided by the number of hours worked in a workweek. An employee’s regular rate of pay may include salary, hourly earnings, commission, and piecework earnings. It also must be more than the California minimum wage.
To calculate overtime or double time wages, first multiply an employee’s regular rate of pay by 1.5 (overtime) or 2 (double time) and then multiply that figure by an employee's work hours.
California overtime = 1.5 * regular rate of pay * hours worked
California double time = 2 * regular rate of pay * hours worked
Depending on an employee’s classification, there are five ways to calculate the regular rate of pay. Let’s take a closer look at the calculation rules below:
- Hourly Employees
If employees are paid by the hour, then hourly wage represents their regular rate of pay. For example, if an employee is paid $20 per hour and they work 40 extra hours a month, then overtime pay will be (1.5 * $20 * 40 = $1200), assuming they’re only entitled to one and a half times their regular pay rate.
- Salaried Employees
To determine the overtime pay for salaried employees, we need to calculate the regular rate of pay for salaried employees. Follow the steps below to find the employee’s regular rate of pay.
- Multiply the monthly salary received by 12 (months) to calculate the annual salary
Monthly salary * 12 = annual salary
- Take the annual salary and divide it by 52 (weeks) to calculate the weekly salary
Annual salary / 52 = weekly salary
- Divide the weekly salary by 40 (legal max. Amount of regular hours) to calculate the regular hourly rate
Weekly salary/ 40 = regular hourly rate
Let’s work through an example together.
A salaried employee earns $4,000 per month. Calculate their regular rate of pay.
Step 1: Identify the monthly salary, which in this example is $4,000. Multiply the monthly salary by 12 to calculate the annual salary.
$4,000 * 12 = $48,000
Step 2: Divide the annual salary ($48,000) by 52 (weeks) to calculate the weekly salary.
$48,000/52 = $923.08
Step 3: Divide the weekly salary ($923.08) by 40 (hours) to calculate the regular hourly rate.
$923.08/40 = $23.08
We now know that the employee’s regular rate of pay is $23.08. We can input this figure into our overtime formula to calculate their overtime pay for the month.
Now let’s calculate overtime pay together.
Suppose the salaried employee works 10 hours of overtime every week. Calculate the amount of pay that the employee is entitled to.
California overtime = 1.5 * regular rate of pay * hours of overtime worked
1.5 * $23.08 * 40 = $1,384.8 (overtime pay)
- Employees Paid by Commission
There are two ways to compute the regular rate of pay for employees who earn commission:
- Use the commission amount as the regular rate of pay
- Divide total workweek earnings (including overtime earnings) by total hours worked (including overtime). Then pay employees 1.5 or 2 times (where applicable) the regular pay rate.
Suppose an employee earns $1,000 in a week after working 50 hours, 10 of those hours being overtime. Using the second calculation method found above, the employees regular rate of pay will be:
$1,000/50 = $40 (regular pay rate)
To compute the employee’s overtime earnings, multiply their regular rate of pay by 1.5 by the total overtime hours:
1.5*$40*10 (assuming there was no double time) = $600 (overtime pay)
- Employee Paid by Piecework
If you pay employees by pieces completed, the easiest method to compute their regular pay rate is to divide an employee’s weekly earnings by the total hours worked.
Alternatively, use the group rate method, as follows:
- Multiply the total number of pieces produced by the employee earnings from each piece.
- Divide the earnings value of the pieces produced by the group by the total number of employees in the group
- Divide that figure by the total hours an employee worked during the week to get their regular pay rate
To understand how to calculate overtime in this situation, let’s take a look at an example.
At your warehouse, there are ten employees producing 7500 cups per week. If you pay employees $1 per cup produced and an employee works 50 hours in the workweek, how do you compute the regular rate of pay?
First let's identify all of the variables in the example.
- 7,500 — Cups produced in a week
- $1 — Employee earnings per cup
- 10 — Number of employees
- 50 — Hours worked in a week
Using the group rate method above, find the employee’s regular rate of pay.
(pieces produced*value per piece/total number of employees in group) / 50 = regular pay rate
((7,500*$1)/10)/50 = $15
Finally, use the regular pay rate to compute overtime pay. In our example, the employee worked 10 hours of overtime in the workweek.
1.5 * $15 * 10 = $225 (overtime pay)
Remember that if piece-rate employees work different hours during the week, you have to calculate the regular pay rate for each individual. Examples of piece-rate employees include:
- Automobile mechanics
- Factory workers
- Carpet layers working for landscaping agencies
- Technicians paid according to the number of telephones installed or repaired
- Carpenters paid by pieces of furniture made
- Employees with Two or More Wage Rates
If you pay employees at different rates, law requires you to use the “weighted average” as the regular rate of pay. In other words, you should divide the employee’s total earnings (including overtime) in a workweek by the total hours worked (including overtime). We’ll show you how to do this in the example below.
Suppose an employee has two jobs:
- Job A pays $20.00 per hour, 34 hours worked
- Job B pays $30.00 per hour, 11 hours worked
Here is how you would calculate their regular rate of pay:
- Compute total weekly earnings
34* $20 + 11* $30 = $1,010 total weekly earnings
- Divide their total earnings by total hours worked to calculate their regular rate of pay
$1010/45 = $22.44 (regular rate of pay)
- Multiply the rate of pay ($22.44) by 1.5 and employees' weekly overtime hours to compute their weekly overtime pay.
1.5*$22.44*5 = $168.30 (overtime pay)
The multiple rates scenario may apply in construction, HVAC, and other industries where employees tackle different tasks that are paid at different rates.
Additional Considerations When Calculating Pay Rates
In addition to the cases mentioned above, extra payments and bonuses must be taken into consideration when calculating the regular rate of pay.
An employee’s non-discretionary bonus must be included when computing the regular rate of pay if the bonus is:
- Compensation for proficiency, production, or hours worked
- An incentive for the employee to remain with your company
However, you should exclude certain payments when determining the regular pay rate if the payments fall under these categories:
- Gifts for special occasions
- Payments you make for occasional periods when employees are off-duty
- Expense reimbursements
- Premium pay for holiday or weekend (Saturday or Sunday) work
- Discretionary bonuses
Most importantly, an employee’s regular pay rate cannot be less than minimum wage. This applies regardless of how you pay them, the nature of work, or working conditions.
Overtime Payment Obligations
Employers should calculate overtime accurately and pay out wages within the stipulated legal timeframe. According to California Labor Code section 204, employers must pay overtime wages “before or on the payday for the next regular payroll period, after which the wages were earned.”
There’s a slight rule change for employees paid weekly, biweekly, or semimonthly. Overtime wages can still be paid on their next payday, but if this is not possible you may delay their overtime payments. Payments can not be held for more than seven days following the end of their payroll period.
Penalties For Late Overtime Wage Payment
According to California late payment provisions, businesses are fined $100 per employee for the first late wage payment. The penalty is doubled ($200) for subsequent, intentional, or willful violations. In addition to the late payment penalty, you are required to pay each employee an additional 25% of the unpaid wages.
Can Employees Waive Overtime Pay?
No, employees cannot waive overtime compensation. California overtime law requires employers to pay overtime compensation to their employees even if they agree to work for lesser wages.
In other words, no agreement to “waiver” overtime wages will be accepted.
Timeero: Simplify California Overtime Calculation
Business owners must be meticulous to avoid potential violations associated with strict California overtime laws. One of the best ways to sidestep hefty penalties and fines is to use an automatic time-tracking tool like Timeero which can be customized to meet the needs of California businesses.
We’ve highlighted Timeero’s top features that assist California business owners with automating their overtime calculation processes below. You can also read our full Timeero review for more details.
Custom California Overtime Features
Timeero’s California overtime feature eliminates the need for costly legal consultation associated with interpreting strict overtime laws. We sought legal advice from well-versed labor attorneys in California to create this one-of-a-kind tool, which lets you apply all overtime provisions at the click of a button.
Timeero is the only time-tracking tool on the market that lets you apply California overtime law without any manual configuration. You only need to select the “use California overtime rule” box, and your business is set. There is no need to lift a finger when it comes to tracking hours worked or determining overtime and double-time hours.
The app automatically calculates overtime pay after an employee works over 8 hours and double time after 12 hours of work. Most importantly, Timeero automatically calculates employees' overtime earnings based on their regular pay rate. At the end of the payroll period, you only need to generate a payroll report to quickly compensate employees.
California Break Tracker: Automatic Break Tracking
Timeero has other custom tools available to California employers, such as the California break tracker, which helps track meal and rest breaks. The break tracker is configured to factor breaks into the overtime calculation to maintain full compliance.
The break tracker also helps you comply with the California break law. Thanks to the daily sign-off form, you don’t have to worry about employees violating break law or potentially dragging your business to court in the future.
When a California employee works more than four hours, they must sign the daily sign-off form in the app before clocking out. When employees append their signature (using our digital signature tool), they attest to taking their legally permitted breaks. This safeguards you against future litigations.
Applicable For All Employee Classifications
Timeero performs flawlessly for businesses with hourly, salaried, commission, and piecework employees. If you have employees that are paid at two or more rates, simply compute their regular pay rate using one of the formulas discussed above and add it to their employee profile. Timeero will track their overtime and calculate any eligible payment automatically.
Timely Shift Reminders
Under California Labor Law, employers must track the hours worked by their teams. The worker timesheet must include shift start and end times and breaks, amongst other vital details. These time records are then used to determine the hours worked on each workday and for the workweek.
Timeero ensures each employee's timecard is accurate, by sending timely shift reminders. The app sends punch reminders to an employee’s smartphone when their shift is about to start so they don’t forget to clock in.
Overtime Notifications
California Employment Law requires you to compensate employees for overtime whether you authorize it or not. Timeero doesn’t just track authorized overtime; we’ve devised a tool to help you prevent unauthorized overtime.
To avoid unauthorized overtime, toggle the “notify when a user goes overtime” button. Timeero will instantly notify you when an employee reaches the overtime threshold. If you didn’t authorize the overtime, you can contact the employee and stop them from working.
California Overtime Law: Key Takeaways
Successful California employers incorporate modern technology into the workplace to enforce policy and remain compliant with overtime laws.
Timeero is an affordable software solution that automates time tracking and enforces California overtime law. If your company policy addresses rules for overtime tracking, Timeero is a beneficial application that will help you automate the tracking process.
Timeero’s California overtime rule feature enables you to track overtime worked in California without violating overtime requirements. The feature also allows you to compensate employees fairly, boosting their morale and productivity.
Start a 14-day free trial today to try the California Overtime feature risk-free. No credit card is required. To learn how to customize Timeero’s features to your unique business needs, book a free consultation with our support team.
Disclaimer: This article is intended for informational purposes only and does not constitute legal advice. If you have questions or legal issues related to California overtime law, consult a labor attorney in California.
California Overtime Law FAQs
What Is Considered Overtime in California?
Overtime in California refers to any time an employee works over 8 to 12 hours in a workday and/or the first 8 hours on the seventh consecutive day of a 40-hour workweek.
Is Overtime Paid After 8 Hours Worked or 40 Hours Worked in California?
Overtime in California is paid after 8 hours worked in a workday or 40 hours worked in a workweek.
How Do I Calculate Overtime Pay for a Salaried Employee in California?
To calculate overtime pay for a salaried employee, divide the annual earnings by 52 weeks to get their weekly earnings. Divide the weekly earnings by 40 (hours) to get the regular rate of pay. Multiply the employee’s overtime hours by one-half time their regular pay rate.
