CA Overtime Rules
California’s overtime requirements are significantly more protective than federal law, and many employers make costly mistakes by misunderstanding these rules. Both employers and employees need to understand how California calculates overtime, when it applies, and which exemptions are valid.
California Labor Code section 510 and applicable Industrial Welfare Commission wage orders require employers to pay overtime premiums in three situations. First, non-exempt employees must receive overtime at 1.5 times their regular rate for all hours worked beyond eight in a workday. This daily overtime requirement does not exist under federal law. Second, employees must receive 1.5 times their regular rate for hours worked beyond 40 in a workweek. Third, employees must receive double time for all hours worked beyond 12 in a workday.
Additionally, California requires overtime for the first eight hours worked on the seventh consecutive day in a workweek, and double time for all hours worked beyond eight on that seventh day. This seventh-day premium applies regardless of whether the employee has already worked 40 hours in the week.
⚠️ Many employers incorrectly calculate overtime by only considering the 40-hour weekly threshold. This approach violates California law when employees work shifts exceeding eight hours. An employee who works four 10-hour days has worked 40 hours but is entitled to eight hours of overtime premium (two hours per day at 1.5 times the regular rate). Failing to pay daily overtime creates immediate wage and hour liability.
The regular rate of pay for overtime calculation purposes includes more than just base hourly wages. It includes non-discretionary bonuses, shift differentials, and certain other forms of compensation. Employers who calculate overtime using only base pay when other compensation should be included underpay overtime and violate the Labor Code.
Alternative workweek schedules provide one exception to daily overtime requirements. Under Labor Code section 511, employers may implement alternative workweek schedules through a specific election process involving employees. If properly adopted, these schedules can allow shifts up to 10 hours without daily overtime. However, the adoption process has strict requirements, and many purported alternative workweek schedules do not comply with the law. Invalid alternative workweek schedules do not eliminate the employer’s overtime obligations.
Employers also frequently misclassify employees as exempt from overtime. California recognizes several exemptions, including executive, administrative, professional, and computer professional exemptions. Each exemption has specific requirements related to job duties and minimum salary thresholds. Simply giving an employee a salary does not make them exempt. The employee must satisfy both the duties test and the salary test for the claimed exemption. Many employers who believe employees are properly classified as exempt would not prevail if challenged.
The salary threshold for most exemptions in California is currently two times the state minimum wage for full-time employment. As California’s minimum wage increases, the exemption thresholds increase proportionally. Employers who set salaries at the exemption threshold when the employee was hired may find those salaries no longer satisfy the exemption after minimum wage increases.
Overtime violations carry substantial exposure. Employees can recover unpaid overtime premiums for up to three years, plus waiting time penalties if the employer fails to pay all wages owed at termination. These claims frequently proceed as class actions when multiple employees experience the same violations. Additionally, representative actions under the Labor Code Private Attorneys General Act (PAGA), which differ from class actions, can result in civil penalties that significantly exceed the unpaid wages.
Are you correctly calculating daily overtime for shifts exceeding eight hours? Are your exempt employee classifications defensible under California law? Do your alternative workweek schedules comply with Labor Code section 511? Overtime compliance requires careful attention to California’s specific requirements, which extend well beyond federal standards.
If you have questions about overtime calculation, exemption classifications, or responding to overtime claims, consult with an employment attorney who understands California requirements.
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Please note that this article is for informational purposes only and should not be considered and is not legal advice, and does not constitute an attorney-client relationship. It is recommended to consult with an employment attorney directly for specific guidance pertaining to your business or individual situation.
This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts — no lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication. This post may be attorney advertising.
Michael Trust Law, APC, 703 Pier Avenue, Ste. B367, Hermosa Beach, CA 90254: michaeltrustlaw.com