| Who
qualifies for overtime pay? |
In the State of California, employees of covered employers are entitled to be paid overtime if the employee works more than 40 hours per week, or more than 8 hours per day, and their position is not otherwise exempt from the overtime law. Overtime hours must be paid at the rate of one-and-one-half times the employee’s regular rate of pay. (For an employee who is paid a salary, the regular rate of pay is calculated by dividing the annual salary paid to that employee by 2,080 hours.)
| How compute hours worked? |
An employee receives time worked for all time that the employee is required to be on the employer’s place of business, on duty, or at a prescribed work place location. Work that is not requested by the employer but which the employer allows the employee to perform is must be paid by the employer to the employee. For example, an employee may voluntarily continue to work at the end of a given work shift in order to finish a project or to correct errors. The employer is obligated to pay the employee for that time worked.
Here are some common issues that may arise in calculating hours worked:
Waiting Time: If the employer requires the employee to wait for an duty to perform, the employer must pay wages for that time to the employee.
On-Call Time: An employee who is required to remain on call on the employer's workplace is considered working while on call and this time is compensable. An employee who is required to remain on call at home is not working on call and this time is not compensable.
Rest and Meal Periods: Rest periods of a short duration, usually 20 minutes or less, must be counted as hours worked on the employee's payroll. Bona fide meal periods (typically 30 minutes or more) generally need not be compensated as work time. However, the employee must be completely relieved from performing any work for the purpose of eating regular meals during this time period.
Sleeping Time: An employee who is required by the employer to be on duty for less than 24 hours is considered working even though he/she is permitted to sleep or participate in other personal activities when not busy. An employee required by an employer to be on duty for 24 hours or more may mutually agree with the employer to exclude from hours worked bona fide regularly scheduled sleeping periods of not more than 8 hours, provided that adequate sleeping facilities are furnished by the employer and the employee can typically enjoy an uninterrupted night's sleep. No reduction is permitted unless at least 5 hours of sleep is taken by the employee.
Lectures, Meetings and Training Programs: Attendance at lectures, meetings, training programs and similar activities are not considered working compensable time, but only if they are outside normal working hours, voluntary, not related to the job, and no other work is performed at the same time.
Travel to and from Work: Time spent traveling to work prior to beginning the regular workday and home at the end of the workday is not work time and not compensable.
Travel During Work: Time spent by an employee in travel as part of his/her principal activity and duties within the scope of their position, such as travel from one job site to another during the workday, is considered work time.
Travel Away from Home: Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is work time when it occurs within the workday of the employee.
|
What types of positions are "exempt" from overtime |
Find below the following positions which are usually classified as
"exempt" from California's overtime laws. However, exemptions are
narrowly construed against the employer asserting them, and the
employer bears the burden to prove that the exemption applies.
Commissioned sales employees of retail or service companies if more than half of the employee's wages are derived from commissions and the employee averages at least one and one-half times the minimum wage for each hour the employee worked.
Computer programmers who are compensated at least $42.64 for each hour worked and who perform work that is intellectual or creative and requires the exercise of discretion and independent judgment.
Executive, administrative, professional, or outside sales employees (see discussion below).
Physicians who are licensed by the State of California and who are compensated at least $55.00 for each hour worked.
Truck drivers whose activities are regulated by either the California Highway Patrol regulations or U.S. Department of Transportation.
Union employees who are covered by a collective bargaining agreement that provides for premium wage rates for all overtime hours worked by union employees.
The executive exemption applies to white-collar employees (1) whose duties involve the management of a business or a recognized department or subdivision of the business or entity they are employed by, (2) who regularly direct the work of two or moreother full-time employees, (3) who have the authority to hire or terminate other employees, or to make recommendations or give input as to hiring or terminations that are given serious consideration by the employer, (4) regularly exercise discretion and independent judgment in the performance of their duties, (5) are paid a salary equivalent to at least two times the minimum wage for full-time employment, and (6) spend more than 50% of their time in the workplace engaged in management duties.
| Some of the most common errors that employers make regarding the California overtime laws are: |
Misclassifying retail or store managers as exempt under the "executive" exemption. A retail manager is non-exempt (and entitled to overtime pay) if he/she spends more than 50% of his/her time on "non-management" tasks, such as sweeping up, selling, helping customers, cashiering, merchandising, stocking merchandise, recovery, maintenance work, or other similar duties that are usually performed by hourly workers.
Misclassifying office employees exempt under the "administrative" exemption. Most general office employees are non-exempt unless they perform work that is directly related to setting company policy or managing the company's business.
Misclassifying computer technicians or customer service workers as exempt under the "administrative," "professional," or "computer programmer" exemptions. Employees who handle mostly routine installation, configuration, servicing, or maintenance of computers or computer network systems are usually non-exempt.
Attempting to avoid paying overtime by making the employee "salaried" is a common error.The employee’s actual job tasks, not the form of pay, determines whether the employee is entitled to overtime compensation.
Asking employees to "waive" overtime pay. This is against the law!
Deducting from a salaried employee's pay for absences of less than a full work day. In order to be exempt, the employee must be paid his/her full salary for any day that he/she performs any work whatsoever. For example, an exempt employee must be paid for a full day even if he/she leaves work early to take their neighbor to the dentist.
Docking a salaried employee's pay
for making an error while working. In General, an employer cannot
impose a penalty or fine on an exempt employee or suspend them without
pay (except in full-week increments).