Managing Overtime in CA
Any employer must become familiar with the employee rights and your obligations as a business owner within your state. These guidelines are essential to protecting the rights of your employees and are strongly enforced. Violation of any kind can be met with a lawsuit from the employee, or a class action suit if there is a group of employees involved.
Exempt vs Non-Exempt
Overtime pay must be offered to all employees, except those who are classified as “exempt.” Many professions and occupations qualify their employees as exempt. Some of the most common business classifications include:
- Employees who work in a learned profession such as law, medicine, accounting, and some creative professions
- Executive employees who spend over half of their work managing their department or the running of their business
- Salespeople who spend a significant portion of their time in the field selling goods or services
- Administrative employees whose roles mostly consist of assisting another exempt individual in business matters
Being a “salaried” employee does not necessarily exclude you from earning overtime pay. The exemption is more so dictated by the type of work an employee is doing, rather than a title. As a business owner, you are required to pay overtime wages unless you are able to prove that an employee is exempt under the state’s definition.
California Overtime Wages
Non-exempt employees who are paid an hourly wage are entitled to overtime under the following circumstances:
- They work a shift longer than 8 hours
- They work more than 40 hours in a workweek
- The work more than 7 consecutive days
The obligated overtime pay is
- 5 times an employee’s regular pay for each hour over 8 hours in a day or 40 hours in a week
- 2 times an employee’s regular pay for each hour over 12 hours in a day or 8 hours on a 7th consecutive workday
Violations and Penalties
California’s courts have been known to favor the side of the employee. When employers violate overtime laws they can be met with fines as well as full back-pay for the overtime and waiting time. If the employee was quit or terminated and not paid overtime at the time, their employer may be ordered to pay additional damages. Damages may also be owed if there are pay stub violations.
