Under California overtime law, an employee who works more than eight hours a day or 40 hours a week is usually entitled to earn overtime for the extra hours worked. Since California's overtime benefits are greater than those available under the federal overtime law, California benefits apply. But the law doesn't apply to everyone, and there are exceptions, so it's important to get an overview of the provisions.
Federal vs. State Overtime Laws
Federal laws apply to all residents of all states. In some areas of the law, the federal law is considered exclusive so states cannot enact laws in that field. In other areas, states are free to legislate their own laws, and the law offering the greater protection applies. This is the case with overtime law.
The federal overtime law, as set out in the Fair Labor Standards Act, applies in California as well as in other states, but California has also promulgated its own overtime laws (California Labor Code Section 510 and following) that offer greater benefits to employees. Since employees can rely on whichever of those two laws provides greater benefits, California workers naturally rely on state law.
How Overtime Law Works
Overtime laws do not restrict the number of hours an employee must work. This is a common misunderstanding. Neither the federal law nor the California statutes limit the number of hours an employee can work in a day or in a week. As long as an employee is over 16 years old, the government leaves the matter of setting work hours to the employer and the employee.
On the other hand, both California and federal laws provide that the employer must pay overtime – amounts above normal wages – to certain employees. Federal law mandates that employers pay wages at time-and-a-half (1.5 times the regular hourly pay) for employees who work more than 40 hours in a workweek.
California law offers even greater protections. Under state laws, an employee who works more than 40 hours a week or who works more than a regular work day – usually eight hours – is entitled to overtime pay.
Regular Work Week Exception
While California law provides that an employee who works more than eight hours in a day must be paid overtime, this rule does not apply to some types of work situations. For example, if an employee's workweek regularly consists of four 10-hour days, the employee does not get overtime for the hours over eight worked in a given day. Likewise, if an employee usually works three 12-hour shifts a week, he will not receive overtime for the hours over eight per day.
However, a worker who regularly works an eight-hour day and is pressed into service for 10 hours one day will be entitled to two hours of overtime. And an employee regularly working four 10-hour days will get overtime if he works more than 10 hours on any one of those days or works any hours over 40 in the week.
Time-and-a-Half or Double Time
Under federal law, overtime is calculated at time-and-a-half of the employee's usual hourly wage. In California, some overtime is time-and-a-half, while other overtime must be paid at double the employee's hourly wage.
Any hours worked over eight in a day or over a normal work day are time-and-a-half overtime up to 12 hours. Similarly, any hours over 40 in a week are time-and-a-half overtime. That includes working a regular shift of five eight-hour days, then working a sixth eight-hour day.
However, if an employee is asked to work a seventh day in a row, all time over eight hours will be double-time pay. Likewise, all hours over 12 in a day are double-time overtime.
Calculating Overtime Pay
Clearly, all overtime pay, both under federal and California laws, is based on the regular amount an employee earns for an hour of work. If the employee is paid by the hour, that amount serves as the basis for calculating overtime.
What if an employee is not paid by the hour? For California overtime law, the hours for employees on a salary are calculated by dividing the salary into an hourly amount. For example, an employee working full time and making $8,000 per month would be earning $2,000 per week for 40 hours of work, or $50 an hour.
Federal Minimum Wage
How much an employee benefits from overtime pay depends on how much she earns per hour. And this may be linked to the minimum wage laws that set an hourly wage floor.
As is the case with overtime law, the federal government sets a national minimum wage that applies to workers in every state. This amount represents the lowest dollar figure an employer can legally pay an eligible employee per hour. Federal minimum wage in 2019 is $7.25 per hour.
However, states can also set their own minimum wage amounts and can authorize cities to set their own as well. Which minimum wage applies? A worker gets the highest of the federal, state and city minimum wage that applies to her.
California Minimum Wage
California sets its own state minimum wage and also allows California cities to set a higher minimum wage if they like. As of January 1, 2019, the minimum hourly wage in California is:
$11.00 for employers with 25 or fewer employees.
$12.00 for employers with 26 or more employees.
Both of these minimum wage levels are set to rise to $15 an hour by 2023. But some cities are already requiring a higher minimum wage of $15 an hour or more, including San Francisco, Berkeley and San Jose. California employees are not legally able to consent to receive a wage lower than the highest applicable minimum wage, but some exceptions apply, such as for student workers.
For overtime purposes, time-and-a-half of a $15 minimum wage is $22.50 an hour. Double time is $30 per hour. In contrast, overtime at the federal minimum wage of $7.25 would be $10.87 an hour.
Exempt Employees: White Collar
Not every worker in California is protected by overtime laws. Some are classified as exempt employees. To be exempt, an employee must receive a salary, not be paid hourly, and that salary must be equal to twice the minimum wage.
For a worker to be classified as exempt, he must have the type of work responsibilities generally associated with white collar jobs, including the right to exercise significant discretion without close supervision. Exempt jobs must be executive, professional or computer related. Job titles do not determine exempt or nonexempt status and exemptions only apply if employees have the described job duties and earn a salary paying at least twice the minimum wage.
Executive Employee Exception
Executive positions are among the white-collar jobs exempt from overtime. An employee only qualifies for this exemption if her primary responsibility is managing the business or some recognized section, department or subdivision of the business.
As part of her regular duties, the employee must supervise or direct the work of at least two full-time employees. She must also have hire and fire authority over other employees. Short of this, at least her recommendations about hiring, firing or promotions of others must be given particular weight by the enterprise.
Another group of employees who do not qualify for overtime benefits are workers who meet the administrative employee exemption requirements. Like all other exemptions, administrative employees must earn a salary that calculates to at least twice the minimum wage.
In addition, the employee's main responsibilities must be office work, not manual work. His work must relate directly to the general business operations of the employer. He must be allowed and encouraged to exercise discretion when faced with important job issues.
Professional Employee Exemption
Professional employees are another class of workers excluded from overtime benefits. To qualify, an employee must perform intellectual work that requires advanced learning or knowledge. Her work must also require the consistent exercise of her discretion and best judgment.
What type of advanced knowledge is required? It must be in a field of science or learning and acquired by long periods of schooling or intellectual training. An exempt creative professional is an employee who works in the field of artistic or creative endeavor. Her job duties must include inventing things or performing work requiring imagination or talent.
Computer Employee Exemption
A computer employee exemption applies to a person employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field. His duties must include one or more of these tasks:
Applying systems analysis techniques and procedures to hardware, software or system functional specifications.
Designing, developing, creating, testing or modifying computer systems or programs related to user or system design specifications.
Designing , developing, creating, testing or modifying computer programs related to machine operating systems.
Exempt Outside Salespeople and Independent Contractors
Employees classified as outside salespeople are considered exempt from the protections of overtime laws if they meet certain requirements. First, an employee's main job must be making sales. This can be fulfilled if the employee goes out to get orders or negotiates contracts for services or for the use of facilities for a client or customer.
To be exempt, the outside salesperson must undertake these tasks in order for his client or customer to get some consideration. He must also regularly work away from the employer's business offices.
Workers That Cannot Be Exempt
Certain types of workers are specifically not included in these exemptions even if they meet the salary and job duty qualifications.Two significant categories of employees who cannot be classified as exempt include manual laborers and first responders.
Manual laborers or other blue-collar workers who perform physical work or repetitive operations with their hands are not exempt, no matter how much money they earn or whether they have similar responsibilities to those positions that are exempt. These include employees in production, maintenance, construction and similar occupations.
Nor do the exemptions to overtime protections apply to first responders, including:
Highway patrol officers.
Parole or probation officers.
Emergency medical technicians.
These first responders are never exempt from overtime protection regardless of their rank or how much money they earn. Their job duties include fighting, investigating or rescuing victims of crimes, fires or life threatening situations.
Exempt Unionized Employees
In addition to the white collar exemptions, certain unionized employees are also exempt from overtime laws. These are employees with collective bargaining agreements that specify their wages, hours of work and working conditions.
In addition, the California Industrial Welfare Commission has issued some wage orders that provide exceptions to California’s overtime laws for workers in specific jobs. These include ambulance drivers, live-in housekeepers and agricultural workers.
Teo Spengler earned a J.D. from U.C. Berkeley's Boalt Hall. As an Assistant Attorney General in Juneau, she practiced before the Alaska Supreme Court and the U.S. Supreme Court before opening a plaintiff's personal injury practice in San Francisco. She holds both an M.A. and an M.F.A in creative writing and enjoys writing legal blogs and articles. Her work has appeared in numerous online publications including USA Today, Legal Zoom, eHow Business, Livestrong, SF Gate, Go Banking Rates, Arizona Central, Houston Chronicle, Navy Federal Credit Union, Pearson, Quicken.com, TurboTax.com, and numerous attorney websites. Spengler splits her time between the French Basque Country and Northern California.