There are several important things for employees to know about overtime pay laws in California, which will benefit those employees more than corresponding federal regulations. For nearly all non-exempt private sector employees in California, overtime pay laws are based not only on the number of hours worked per day, but also per week. Overtime consists of any hours worked over 8 hours in a single work day or 40 hours in a single work week.According to California overtime pay laws, employers must provide time-and-one-half the employee’s regular rate of pay for: (1) all hours worked over 8 in a single workday; and (2) the first 8 hours worked on the seventh consecutive day worked in a single workweek. Double hours must be given for: (1) all hours worked beyond 12 in a single workday; and (2) the hours worked beyond 8 on the seventh consecutive day worked in a single workweek. In the situation where an employee works a 6-day workweek, but has not worked more than 40 hours in that workweek, no overtime is owed unless the employee works more than eight hours on the sixth day.
Payroll administration often has a difficult time while calculating overtime due to confusion over time-and-one-half and double-times. That is why employees should thoroughly understand overtime pay laws as well as their employer’s overtime policies before their first paycheck arrives. No matter what level of overtime pay the employee is going to receive, the calculations must be based upon their “regular rate of pay” versus their normal hourly amount. Under overtime pay laws, the regular rate is a term used to mean the employee's actual rate of pay once all hourly earnings plus many other types of compensation are considered. It must include nearly all forms of pay received by that employee, including commissions, production bonuses, piece work earnings, and value of meals and lodging.
A sample calculation of the regular rate is as follows: a restaurant employee receives $10 per hour while working as a hostess and $9 per hour while bussing. Assume she receives no tips or other forms of pay. In a five day period, she works 10 hours per day – 40 hours as a hostess and 10 hours bussing overall. Therefore, her regular rate of pay is (($10×40) + ($9×10)) ÷ 50, which equals $9.80. Assuming her employer’s policy is to give employees time-and-one-half for overtime work, then she receives $9.80 ÷ 2, which is equal to $4.90 as her overtime premium. Therefore, she would receive $4.90 × 10 (which is $49.00) in overtime pay in addition to her $490 in base pay, making a grand total of $539.00 for the week (before taxes of course).
One way many employers try to avoid confusing overtime pay laws is by placing employees on salary instead of hourly pay structures. However, non-exempt salaried employees still must receive overtime pay for hours worked over 8 hours in one work day or 40 hours in one work week. As mentioned earlier, it is very important for employees to understand their company policies and corresponding overtime pay laws since there are many different situations and confusing calculations involved.