What exactly is the California Overtime Act?
California follows federal overtime regulations, but it also has several requirements that are specific to the state. When it comes to California overtime regulations, there are a few key points that every company owner should be aware of.
A California business must comply with both the federal Fair Labor Standards Act and the California Labor Code since there are two sources of relevant legislation. Let’s take a look at the overtime legislation in the state of California.
California Overtime Regulations
California, like federal wage and hour law, defines overtime as hours worked in excess of 8 hours per day or 40 hours per workweek. Employees are entitled to overtime compensation unless they fall under an exception from California overtime legislation. Employees often earn 1.5 times their usual compensation for working more than 8 hours per day or 40 hours per week. If an employee works more than 12 hours in a day or more than 8 hours on their seventh consecutive day of labor, their pay rate is doubled.
To be eligible for overtime compensation, workers must be above the age of 18, or over the age of 16 and legally permitted to work instead of attending school.
How is overtime calculated in California? – The basic rule that non-exempt workers who work more than 40 hours per week are entitled to 1.5 times their normal hourly pay as overtime for any hours worked in excess of 40 seems straightforward. However, California overtime legislation is nuanced, and determining when and how much overtime is needed might be more complicated than it seems. Inadvertently breaching a California overtime regulation due to miscalculations is a typical employer error that may be avoided by knowing about the law and engaging with advisory specialists.
The following are some general guidelines for determining overtime:
A workday is a 24-hour period that may start at any moment, but all workday computations for an employee must start and conclude at the same time. This does not imply that the employee must begin work at the same hour each day. For mathematical purposes, the time simply starts ticking at the same moment.
A workweek is defined as seven consecutive 24-hour workdays.
Workweek calculations, like workday calculations, must start on the same day and time each week. To avoid overtime, an employer cannot specify that an employee’s work week begins on Monday one week and Tuesday the following. Workweeks may be altered for reasonable reasons.
Overtime in California is typically calculated using daily totals. For any time spent working more than 8 hours per day, the employer must double the employee’s usual rate of compensation by 1.5 or 2.0, depending on the amount of overtime pay the employee is entitled to. Overtime compensation is calculated by multiplying the time worked in excess of 8 hours by the overtime pay rate.
Only hours worked at the employee’s usual rate of compensation count toward daily and weekly hours. To put it another way, overtime hours performed do not count towards an employee’s daily and weekly hours when deciding what overtime rate applies.
Employees who are paid on a salary rather than hourly earnings might compute their regular rate of pay by dividing their typical weekly compensation by 40.
It is critical to understand what “normal” rate of pay entails when calculating overtime under California law. The normal rate of compensation of an employee includes more than simply their hourly income.
Almost any sort of revenue that the employee regularly obtains is also considered when determining how much the employee generally earns per hour of labor. This rate may alter over the employee’s tenure with his or her company.
What about vacation days?
What does the overtime legislation say about an employee who takes a day off during the workweek for a vacation or illness? Do those hours include the overtime calculation?
No, it does not. Employees only earn overtime compensation if they work more than 40 hours in a workweek, regardless of whether they work during the day or not. California overtime rules vary from federal overtime requirements, thus it is critical to follow both when compensating workers.