There are a number of differences between state and federal wage and hour laws. The Fair Labor Standards Act or FLSA establishes federal minimum wage and overtime pay rates for employees who work in the private sector as well as for employees of federal, local and state governments.
Key Points - Table of Contents
- How They Are Different
- California's Overtime Laws Are Stronger
- How Employers Avoid Paying Overtime
- California Labor Law Overtime Provisions
- Calculating Overtime Pay
- Exempt Employees
- Nonexempt Employees
- Employees in California Enjoy More Protective State Overtime Laws Compared to Federal Law
- Contacting an Experienced Lawyer
How They Are Different
The U.S. Department of Labor enforces the FLSA. Most public employees are covered under the FLSA even though there are exclusions for certain categories of employees. Private employees are also covered under the FLSA if the employer is a hospital, educational institution or governmental agency that has revenue of at least $500,000 each year.
In California, wage and hour laws are set forth in the California Labor Code and the California Industrial Welfare Commission (IWC) Wage Orders, which set the overtime and minimum wage rates. In California, the Division of Labor Standards Enforcement or DLSE enforces these laws.
California's Overtime Laws Are Stronger
So, what happens when state and federal laws conflict? When that occurs, private employers are required to follow the law that works to the employee's advantage. Since California's wage and hour laws stronger than federal laws, it will most likely prevail. Under FLSA, overtime must be paid at 1.5 times the employee's hourly rate for working more than 40 hours during a workweek.
In California, an employer must pay non-exempt employees at 1.5 times the employee's hourly rate for each hour worked over eight hours in a day for each hour worked over 40 in a workweek as well for the first eight hours worked on the seventh consecutive day of the week. Also, California's employers must pay double the regular rate of pay for 12 or more hours worked in a day and for all hours worked over eight on the seventh consecutive day of work.
FLSA overtime rules also do not apply to agricultural workers who prepare crops for transportation or processing within the same state. However, in California, agricultural employees who prepare the soil or harvest crops are paid overtime after 10 hours of work in a day and for the first eight hours on the seventh consecutive day or work in a workweek. Also double time is paid for all hours of work in excess of eight on the seventh day of work in a workweek.
How Employers Avoid Paying Overtime
There are many ways in which employers dodge paying overtime to workers. Here are some of the common strategies employers use to avoid paying overtime:
Misclassifying workers: A number of employers try to get around paying employees overtime or benefits by classifying them incorrectly as "independent contractors." If your employer controls the time, place or manner of your work or if your employer prohibits you from working for other companies and sets work rules and your hours of work, then you are an employee under the law, not a contractor. If you signed an independent contractor agreement, but are being treated like an employee, you are not only losing your overtime, but also paying your company's share of employment taxes.
Off-the-clock work: There are also employers who force employees to clock out for lunch or meal breaks even if they work through their lunchtime. Some others might tell their employees to clock out, but require them to continue working. These actions are all illegal strategies that employers use to prevent paying overtime.
Blurring the line: Some employers try to cut corners by letting go of non-exempt or hourly workers and giving those duties to exempt employees who are not required to be paid overtime. So, these exempt employees would be doing twice the work for the same pay. For example, if you are a manager, but are also required to answer calls or man the front desk, you are probably entitled to receive overtime pay for performing non-exempt duties.
On-call expectations: If you have to be on call and are unable to use your free time in a manner of your choosing, then, you should be paid overtime for the period you are on call. If the company says you must be within a certain distance from the office or that you must return calls within a short time, then you should be getting paid overtime for remaining on call and putting the rest of your life on hold.
Working from home: If your job requires you to respond to emails or texts, or work from home after you leave work, you are entitled to be paid overtime for those hours. This has become a complex issue as more Californians are working from home now because of the coronavirus pandemic. It is important to keep track of your work time closely so you are paid what you are owed.
Volunteer work: Many companies are increasingly getting involved in charitable work, which is a wonderful thing. They may ask their employees to volunteer for this type of work during weekends or holidays. If this work is completely voluntary, you don't have to be paid overtime. However, if your employer requires you to participate and if you could face consequences for not volunteering, you should be compensated.
California Labor Law Overtime Provisions
While federal and California laws require nonexempt employees to be paid overtime when an employee works over 40 hours in a workweek, California goes a step further by affording workers rights beyond those overtime protections. Under California law, overtime must be paid to nonexempt or hourly workers when they work:
- Over 8 hours in one workday
- Over 40 hours in a workweek or
- A seventh consecutive day in any workweek
The typical overtime rate of pay in one-and-a-half times the employee's regular rate of pay or "time and a half." However, employees are entitled to receive double the regular rate of pay when they work over 12 hours in workday or more than 8 hours on the seventh consecutive day in a workweek.
Under the law, a workday is defined as a 24-hour period that starts at the same time on each calendar day. Similarly, a workweek is a period of seven consecutive days beginning on the same calendar day as each week. Understanding how each workweek and workday has been designated is crucial to determining overtime pay.
In order to be eligible for overtime pay, employees must be over the age of 18 and employed in a non-executive or "nonexempt" job. Employees on hourly rates, day rates or an annual salary may also qualify for California overtime pay, depending on their designation.
Calculating Overtime Pay
California law requires employers to pay an overtime rate of one-and-a-half times the regular rate of pay. These overtime rates will be paid to hourly or nonexempt employees who work more than 8 hours a day or 40 hours week. For hours worked in excess of 12 hours in any workday, an employer must pay twice the employee's regular rate of pay. Also, employees are entitled to receive 1.5 times their regular rate for hours worked over 40 in a workweek.
However, overtime calculations are different when an employee works seven consecutive days in a workweek. On the seventh day, the worker is entitled to 1.5 times their regular rate of pay for the first 8 hours worked. For hours over 8 on the seventh day, the employee is entitled to twice the regular pay rate. This is different from other workdays where overtime pay would be triggered after the first eight hours of work. Employees, in addition to unpaid overtime wages, may be able to receive monetary penalties when an employer does not properly calculate overtime pay.
If you believe your employer has failed to calculate your overtime wages correctly, it is important to bring it to their attention promptly. If you believe that your employer deliberately shortchanged your wages, contact an unpaid wages lawyer to better understand your legal rights and options.
Exempt Employees
Under California law, an "exempt" employee may be paid on a salary basis as opposed to getting paid by the hour. Exempt employees are not eligible to receive overtime pay, meal and rest periods, and do not fill out time sheets. Making the decision about whether an employee is exempt or nonexempt is a critical decision employers must make before offering a job to an individual. There are times when California employers misclassify employees as exempt when they should have been classified as nonexempt.
California recognizes five types of exemption including:
Executive exemption: This requires the employee to have duties relating to the management of the company, have supervisorial duties and the authority to make employment-related decisions such as hiring and firing. An exempt employee must also spend more than half their time engaged in duties that meet the test of exemption in addition to being paid a monthly salary no less than twice the state minimum wage.
The administrative exemption: This exempts employees who are engaged in high-level work that is related to management policies or general business operations. If the employee spends more than half of their time doing low-level activities, they may not be exempt.
The professional exemption: This includes professions such as law, medicine, dentistry, optometry, architecture, engineering, teaching and accounting as well as nurses, pharmacists and software coders.
Inside sales exemption: A person who is involved in the sale of products or services in the company's office can be exempt from overtime if they receive a salary of more than 1.5 times the minimum wage, and if more than half of their wages earned are in the form of sales commissions during each workweek.
Outside sales exemption: This means the employee regularly works more than half the time away from the company's office selling items or getting orders for products or services.
Nonexempt Employees
In 2023, if you earn a salary of under $68,480 in California and work for a company with 25 or more employees, you are considered nonexempt. Nonexempt employees are also paid on an hourly basis and are therefore also known as "hourly" workers. Under California law, nonexempt employees are entitled to the following:
Minimum wage: Nonexempt employees are required to make at least minimum wage. According to the California Department of Industrial Relations, the minimum wage is $15.50 per hour in 2023 for all employers. In some jurisdictions such as San Francisco or in Los Angeles County, the minimum wage is higher than the California rate. In such cases, employers must pay the higher wage.
Overtime pay: California law requires employers to pay nonexempt employees time and a half or one-and-a-half times their hourly rate when they work over 8 hours in a workday; over 40 hours in a workweek; and for the first 8 hours worked on the seventh consecutive workday in one workweek. Employees are entitled to twice their hourly rate of pay when they work over 12 hours in a workday and over 8 hours on the seventh consecutive day in one workweek.
Rest and meal breaks: Nonexempt employees are also entitled to an unpaid 30-minute lunch break if they work more than 5 hours in a day. If you work 10 or more hours in a day, you are entitled to another meal break of 30 minutes. During lunch break, you must be relieved of all your work responsibilities. For example, your employer cannot require to be on call during your lunch break or force you to return to work before you are done taking your lunch break. Nonexempt employees are also entitled to a paid 10-minute break for every four hours worked.
Employees in California Enjoy More Protective State Overtime Laws Compared to Federal Law
California wage and hour laws – particularly overtime laws – are much stronger and more protective of employees compared to the federal Fair Labor Standards Act or FLSA. Under FLSA, employers are required to pay overtime wages only when employees work over 40 hours in a single workweek.
However, under the California Labor Code, employers must pay workers overtime wages for working more than 40 hours in a week. In addition to that rule, the state also requires companies to pay overtime when employees work over 8 hours in one workday and when they work on seven consecutive days in the same workweek. On the surface, this might not appear to make a big difference. But, on closer examination, it does make a difference for workers.
When an employer in California attempts to circumvent paying overtime wages, they can get away with requiring employees to work 12 hours on one day and 6 hours the next day to compensate for that time while the hours add up to 40 at the end of the week. Under FLSA employees working such schedules would not receive overtime compensation. However, under California's overtime law, not paying an employee overtime wages for working more than 8 hours in a single workday is a violation. Even if you work only one day in a week, you are entitled to overtime for working more than 8 hours on a given workday.
Contacting an Experienced Lawyer
California employees may file a wage and hour lawsuit for failing to pay overtime wages. The FLSA provides a right of action for violations of federal labor laws. This includes the failure to pay hourly employees the federal minimum wage or failure to pay overtime. The FLSA provides for liquidated damages for unpaid overtime compensation, which means that if you re successful with the lawsuit, you could get damages that amount to double the unpaid overtime. You may also be able to recover the cost of attorneys' fees and other lawsuit-related expenses.
If your employer has violated the FLSA and/or California overtime laws, the experienced California employment lawyers at Kingsley Szamet & Ly can help you better understand your legal rights and options. We can provide you with the knowledge and resources you need to make an informed decision regarding your case. We do not charge any fees unless we have recovered compensation for you. Call us at 888-500-8469 for a free, comprehensive and confidential consultation.