Overtime Pay Nuts and Bolts

Posted in Employee Rights, Employer Rights, Employment Law, News, Wage and Hour on July 24, 2014

Who is entitled to overtime pay in California?

Both federal and California law requires that employees be paid the minimum wage for all hours worked and that nonexempt employees be paid the proper overtime pay rate for overtime hours worked.  Stating the rule is the easy part.  How is it applied in practice?

First, one must understand what types of employees are not entitled to overtime pay.  Under federal law, certain so-called “white collar” employees are not entitled to overtime pay.  To qualify for these white collar exemptions, an employee must meet certain tests regarding her job duties and be paid on a salary basis at least $455/week.

Executive Exemption

This exemption applies to managers.   If an employee’s primary duty is managing the business or a recognized department or division of the business; if she regularly directs the work of at least two other full-time employees; and if she has the authority to hire or fire other employees or if her suggestions about hiring and firing carry particular weight.

Administrative Exemption

This exemption applies if the employee’s primary job duty is performing office (or other non-manual work) that is directly related to the management or general business operations of the business or its customers and if she is able to use discretion and independent judgment regarding important matters.

Professional Exemption

This exemption applies if an employee’s primary job duty requires advanced knowledge in a field of science or learning that is customarily acquired by a prolonged course of specialized intellectual instruction.

Other Exemptions

Workers may also fall under the creative professional exemption (if one’s primary duty is the performance of work requiring invention, imagination, creativity, or talent in a recognized artistic or creative field); the computer employee exemption (if an employee is employed as a computer systems analyst, computer programmer, software engineer, or similar worker performing duties such as the application of systems analysis techniques and procedures or designing or developing computer systems or programs); and the outside sales exemption (if one’s primary duty is making sales during which he is regularly away from the employer’s place of business).

If you qualify for any of these exemptions, you are exempt from overtime law and may be appropriately paid on a salary basis. California law has similar exemptions, though it is possible to be exempt under federal law and non-exempt under California law.  There are also other possible exemptions under federal and state law not listed here, so if you are not being paid overtime wages and do not qualify for any of these exemptions, you may wish to seek additional information by contacting an attorney or visiting www.wagehour.dol.gov.

How much overtime pay should I be paid?

If you are a non-exempt employee, meaning you do not fall into the exemptions described above, you are entitled to overtime pay.  How much?  It depends on the state in which you work.  At a minimum, federal law generally requires that non-exempt employees be paid at least one and a half times their regular rate of pay after forty hours of work in a workweek.  California law provides greater protections for non-exempt employees, requiring time and a half pay for all hours worked over eight in one day or forty in one week, as well as double time for all hours worked in excess of twelve hours in a workday or all hours worked in excess of eight hours on the seventh consecutive day of work.

What is my overtime rate if I’m salaried?

If your employer is paying you on a salary basis, when in fact you are eligible for overtime pay, your first question might be: how much overtime am I owed?   Again, this depends on where you work.  Under federal law, you first calculate your regular rate of pay by dividing your salary by the actual hours that you worked to arrive at your hourly rate.  Your overtime rate would be one and a half times that regular rate.  California law is more generous to employees; under California law, your regular rate is calculated by dividing your annual salary by 2080 hours.   Your overtime rate is then either one and a half or two times that regular rate.

If I’m an employer, am I obligated to pay employees for overtime that I did not authorize?

Yes, even if you did not permit an employee to work overtime, you must pay overtime wages for all overtime hours that your employees were “suffered or permitted to work.”  Under California law, this means that employees must be paid for any work that the employer knew about or should have known about.  You are, however, permitted to discipline employees for violating a policy requiring pre-authorization before working overtime.

Can my employer require me to work overtime?

Generally, yes, your employer has the right to dictate your work schedule and work hours, including requiring you to work overtime.  Your employer must, however, properly pay you for any overtime hours that you are required to work.

Can I get Paid Overtime if I am an Independent Contractor?

True independent contractors are not entitled to overtime pay or any of the other protections of federal and California employment laws.  However, lots of people are misclassified as independent contractors.  Even if you sign an agreement saying you are an independent contractor, you may actually be an employee under the law.  The key factor is “control.”  If the company you work for retains the right to control how and when you do your job, you may actually be an employee entitled to overtime pay.

What should I do if my employer isn’t paying me my overtime wages?

You may file a wage claim with the Division of Labor Standards Enforcement (DLSE) or you can file a lawsuit.  Either way, you should contact an experienced employment attorney to help determine the strength of your claim.