The main difference between California Overtime Law and federal overtime law is the requirement to pay double time once an eligible employee has worked more than 12 hours in a workday or for more than eight hours on their seventh consecutive day of work.
Employees who qualify for California Overtime are paid at 1.5 times their normal rate when they work for more than eight hours in a workday, more than 40 hours in a workweek, and for the first eight hours of their seventh consecutive day of work. They are paid at twice their normal rate when they work more than 12 hours in a workday or for more than eight hours on their seventh consecutive day of work.
To be eligible to receive overtime payments, the employee must be over the age of 18 (or over the age of 16 if they are legally allowed to leave school to start work) and employed in a non-executive, non–administrative, non–professional job (though other exemptions also apply). This typically means they are in a role that is directly involved in the production of whatever it is that the company is selling to its customers, that their pay can be quantified against the number of units the company produces, and they do not have the freedom to choose how and when they do their job. To be clear about who this applies to, it is a good idea to check the exemptions on the State of California's Department of Industrial Relations website and get professional advice if you are in any doubt.
The employee could be on an hourly rate, a daily rate, or an annual salary and still qualify for California Overtime if they are not exempt (more on this below).
Q. What is a workday?
A. A workday is 24 hours long. It can start at any point in the day but subsequent workdays should then start at the same time each day. Workdays do not need to coincide with the start of an employee's shift and the employer can set different workdays for different shifts, but once these are established they can only be changed if the change is permanent and not brought in to avoid overtime payments.
Q. What is a workweek?
A. A workweek is seven consecutive 24–hour periods, comprising 168 hours in total, which start on the same day and time each week. A workweek can begin at any time of any day, as long as that time, and day, are fixed and recurring. Once established, the starting point of a workweek can only be changed if the change is permanent and not brought in to avoid overtime payments.
Q. Who is not covered by California Overtime?
The following employees are not eligible to receive overtime payments under California labor law:
- Executives: Anyone earning more than twice the minimum wage (currently equivalent to more than $720 a week) who also runs a company, or one of its departments, and manages more than two employees with the power to review their work as well as hire and fire them.
- Administrative employees: Anyone earning more than twice the minimum wage (currently equivalent to more than $720 a week) whose job does not involve manual labor but does require specialized training and allows them the freedom to decide how and when they perform their work with minimal supervision.
- Professional employees: Anyone earning more than twice the minimum wage (currently equivalent to more than $720 a week) whose job is in law, medicine, dentistry, optometry, architecture, engineering, teaching, accounting, sciences (if it does not involve manual labor), the arts (if their work cannot be measured by a unit of production) and allows them the freedom to decide how and when they perform their work with minimal supervision.
- Other professions, such as drivers, actors, student nurses, and some journalists are also exempt from some or all aspects of California Overtime Law.
For more information on overtime exemptions, please see the State of California's Department of Industrial Relations website and always seek professional advice before deciding on who may or may not be exempt because it is a complex area.
You should also be aware that some employees who may otherwise be eligible for California Overtime will not receive it due to the fact that they are contracted to work a different shift pattern to the standard five eight–hour days in a workweek—such as four days of 10 hours or three days of 12 hours. Even though these shifts are over eight hours in length, the employee will only receive overtime once they have worked more than 40 hours in any workweek.
Q. How is California Overtime calculated?
A. California Overtime is based on an employee's normal, hourly rate of pay. If the employee is not paid by the hour, but receives an annual salary for example, and they are eligible to receive overtime payments (as some salaried employees are), their hourly rate is calculated by dividing their annual salary by 52 (the number of weeks in the year) and then by 40 (the number of hours in a workweek).
If an employee receives two different rates of pay during a 40–hour workweek, their overtime is calculated using a weighted average of the two rates. Read more about this on the State of California's Department of Industrial Relations website.
If an employee takes a day off during a workweek—whether as a vacation or due to ill health, for example—these hours cannot be counted towards their overtime calculation. So if they work 48 hours in a workweek in which they worked eight hours each day, but took one day off, they would not receive any overtime payment because they have not worked more than 40 hours.
Other benefits that cannot be counted when calculating overtime rates are discretionary bonuses which are given at Christmas or other times of the year because they are considered to be outside of an employee's normal rate of pay. Nondiscretionary bonuses, on the other hand—which are based on the number of hours that have been worked and the quality of the work that an employee has done—are included in the calculations because they are part of the employee's normal rate of pay.
Q. When should California Overtime be paid?
A. California Overtime should always be paid to eligible employees who work more than eight hours in a workday, more than 40 hours in a workweek, or for seven days in a row, and they should receive this money in their next paycheck. This applies whether the overtime has been authorized by a manager in advance or not.
In California, employees cannot prevent their employer from knowing that they are about to do overtime—so the employer should, in theory, have the opportunity to refuse the request in advance to prevent unauthorized overtime. For more information about unauthorized overtime, see our other FAQ: Do I have to pay employees for unauthorized overtime?
Employees cannot opt out of receiving overtime payments. If they are eligible for overtime payments under California state law, they must receive them. If they do not receive the money they are owed, an employee has the right to sue their employer with legal protection against discrimination in the workplace.