There are various federal and state laws that guarantee the labor rights of all workers. One of these fundamental rights is to be paid fair compensation for a certain amount of work. If an employee puts in extra hours of work, they are absolutely entitled to an extra amount of pay. This premium rate of pay is officially known as “overtime”. If you are located in California and have been shorted on overtime, then Stop Unpaid Wages can help ensure that you get the full amount that you are owed.
What is Considered a Workweek?
The general category of laws that deal with wages and overtime are known as “wage and hour laws”. These laws guarantee certain minimum standards for employees in regards to wages and legal rights. In order to keep a universal standard for the calculation of applicable wages, the law divides time into regular “workweeks”. This measurement of time is a fixed and regularly recurring period of one hundred sixty-eight (168) hours, or seven (7) consecutive twenty-four (24)-hour periods. These consecutive 24-hour periods are officially known as “work days”.
This workweek does not necessarily have to coincide with a calendar week. The workweek may begin at any hour of the day and on any day of the week. This is particularly true for jobs which may require unusual workweeks with unusual workdays, such as swing or graveyard shifts. Furthermore, the employer may develop rotating and/or alternating schedules that require employees to start at different times of the day.
The accumulation of work hours resets at the conclusion of each 168-hour increment of time. This means that the averaging of hours over two (2) or more workweeks is prohibited. Overtime hours that accumulate during each workweek must be applied to that workweek and that workweek alone. Furthermore, these overtime hours must be paid on the regular payday coinciding with the pay period during which said overtime wages were earned. This means that the employee will receive both their regular pay and their overtime pay at the same time.
The Fair Labor Standards Act (FLSA)
The federal wage and hour law is the Fair Labor Standards Act (commonly referred to as the FLSA). This law was enacted in 1938 in order to protect employees from exploitation by unscrupulous or predatory employers. Before the enactment of the FLSA, there were no legally-binding standards governing minimum wage, overtime pay, child labor, or requirements that employers keep detailed administrative records. This federal statute regulates jobs in both the public and private sectors.
The specific portion of the FLSA that deals with overtime is officially designated as 29 US Code, Sections 201-219. In essence, this portion of the law states that any employer who permits or requires an employee to work beyond the regular 40-hour workweek is legally required to pay the said employee a premium rate. Furthermore, this overtime requirement may not, under any circumstances, be waived, even in cases where the employee and employer ostensibly agree to it. If the employer states that no overtime work is permitted or that it must be authorized in advance, the employee is still entitled to overtime pay if they end up working more than 40 hours in a given workweek. This means that unauthorized overtime is also covered under the FLSA.
Overtime pay is a premium rate that is calculated based on the employee’s “regular rate of pay”. The regular rate of pay is the base-amount of wages that the employee earns and is pre-determined before the employee begins their term of employment. In most cases, this regular rate of pay is formally defined in an employment contract. If there is a written document that is signed by the employee, then this employment contract is explicit. If it is only a verbal agreement between the employer and employee, then this employment contract is implicit. However, wage and hour laws require both explicit and implicit employment contracts be obeyed by the employer and considers both to be legitimate and legally binding agreements.
The regular rate of pay is also known as the “straight-time rate”. Both the regular rate of pay and the straight-time rate are non-premium pay rates. This means that they apply to an employee for any work done that is below the federal standard of a 40-hour workweek.
How Do You Calculate Overtime Under the FLSA?
Since overtime is a premium rate, the process of calculating it is done using the regular rate of pay as the starting point. This regular rate of pay cannot legally be less than the federal minimum wage which, as of July 24, 2009, is $7.25 per hour. The employee may be paid on a salary, commission, or piece-rate method, but the overtime pay must always be calculated by the average hourly rate that is derived from these earnings. This average hourly rate is determined by dividing the total pay for employment (minus several statutory exceptions) in the given workweek by the number of hours that the employee actually worked.
The statutory exceptions to this total pay include any compensation for expenses that were incurred on behalf of the employer, premiums paid for work on weekends or holidays, bonuses of a discretionary nature, or gifts. They also include any payments rendered for periods of time when no actual work is done due to illness (sick days), vacation (paid time off), military leave, administrative leave with pay, time off that is compensatory, and/or national holidays.
Section 7(g)(2) of the FLSA also states that if an employee performs two or more different types of work in a single workweek, with different straight-time rates, then the regular rate for that workweek is calculated by taking the weighted average of these various straight-time rates. In other words, the straight-time earnings are all added and then this numerical total is divided by the total amount of work hours that have been accrued at the various jobs.
Once you have determined what the employee's regular rate of pay is, then you calculate the overtime rate by multiplying the base rate by 1.5. This overtime rate is triggered any time an employee works more than 40 hours in the workweek.
The FLSA explicitly prohibits the payment of a lump sum for overtime hours that have been worked. This mandate applies even if the lump sum is equal to or greater than the premium amount owed to the employee on a per-hour basis. Furthermore, even if an employee is hired to always work more than 40 hours in a workweek and are paid a lump sum (a salary) for this amount of time, any hours worked above 40 hours must be calculated as overtime. Essentially, the FLSA standards for overtime are absolutely set in stone and it is an absolute requirement of federal wage and hour laws.
California Labor Code and Wage Orders
The California wage and hour laws are codified under the California Labor Code. This is a set of civil statutes and any violation thereof is a civil, not a criminal, offense. If a violation has occurred and the aggrieved employee has filed a lawsuit and/or taken the case to civil court, then the employer may be required to pay penalties as well as reimburse said employee their unpaid wages. The reimbursement of these unpaid wages is also referred to as "backpay". Failure to pay overtime to California employees is a direct violation of the Labor Code and is considered to be a form of “wage theft”. Overtime for employees in California is explicitly delineated in California Labor Code, Section 510 LC.
Overtime is further guaranteed via “wage orders” developed by the Industrial Welfare Commission (also known as the IWC). These wage orders make further legal provisions that fine-tune and sharpen the already existing wage and hour laws. Because the IWC does not currently exist as a state agency, both State Bill 3 (SB3), Chapter 4 and Section 1882.13 of the Labor Code state that the Division of Labor Standards Enforcement (the DLSE) must implement and enforce these wage orders.
The California legislature clearly takes this issue very seriously and prioritizes the fair compensation of all workers. Being paid fairly and justly is considered an alienable legal right and this includes the timely and accurate payment of overtime wages. There is considerable overlap between the wage orders and the Labor Code, and a skilled legal team that specializes in unpaid wages claims will help you best navigate this complex maze of state laws and statutes.
Furthermore, these California overtime laws are much more stringent than the FLSA. In fact, California wage and hour laws are more favorable to employees than to employers. If you are an employee in the state of California, working in the private or public sector, then you should rest assured that there is ample legal coverage for your unpaid overtime wage complaint and/or lawsuit.
California’s Strict Overtime Laws
It is generally accepted that Section 510 LC is so vigorously implemented because effective overtime laws serve two fundamental purposes. First of all, this premium rate of pay provides for fair financial remuneration to workers who have sacrificed their free time to work longer hours. Wage and hour laws, on both the state and federal levels, were enacted for precisely this reason: to ensure fair and just compensation to all workers and employees. It also spares employees from being overworked and exploited.
Secondly, the enforcement and implementation of overtime wages provide an incentive to employers to hire more employees so that they may avoid having to pay the premium overtime rate. This results in higher employment rates and a stronger overall economy. This means that the state of California is also invested in ensuring that you get paid your overtime wages.
The employee in question need not be an official resident of California in order to be protected under the state overtime laws. As a matter of fact, Section 1171.5 of the Labor Code ensures that all workers in California are guaranteed all the regular protections even if they are not legal residents or have legal work privileges in the United States. This includes workers who do not have a “green card” or who are undocumented because the worker’s immigration status is irrelevant and they must be paid fairly and legally. These workers are also entitled to file an unpaid wages claim if they are owed overtime wages.
Furthermore, the Labor Code explicitly forbids any employer to designate the employee’s regular rate of pay in a manner intended to circumvent or evade the overtime provisions in the law. The employer also cannot structure workweeks in a way that is designed to avoid paying overtime. Remember that employers have considerable freedom in deciding how they want to structure the workweek, but they must still do so in a way that respects the overtime provisions.
All of this essentially means that the Labor Code will hold an employer financially responsible if it is determined that they acted in “bad faith” by trying to short an employee their premium wages. If you feel that your employer purposefully or even maliciously withheld your overtime wages, then your unpaid wages attorney would make this the crux of their legal argument to give you a greater chance at recovering your unpaid wages.
Furthermore, your employer may also be held responsible if they required you to work extra hours without paying you overtime. This is also known as working “off the clock” and is an actionable offense under California overtime laws. This requirement may be tacit or it may be explicitly stated. Your employer may even be held legally liable if they merely suggested that you work off the clock.
If the court rules in your favor, then you may be entitled to backpay of the unpaid wages, usually dating back to two (2) years to before you filed the complaint and/or lawsuit. In lieu of interest on these unpaid wages, the court may also award you what are known as “liquidated damages”. The employer may potentially be financially responsible for paying your legal fees as well as any state civil penalties. Finally, because failure to pay overtime violates both state and federal laws, the employer may be required to pay a penalty of up to $10,000 for each proven violation of FLSA. To ensure that you stand a good chance to recover this substantial financial remuneration, it is highly advisable that you hire a legal firm with an extensive background in unpaid wages cases.
Differences between State and Federal Laws
In cases where the federal and state laws may differ or even contradict each other, the law that is most favorable to the employee is the law that will be implemented. Because of this complex network of state and federal statutes, it is absolutely crucial that you retain a legal team with a deep working knowledge of unpaid wages cases so that they give you the best chance of recovering these unpaid wages.
Both state and federal laws specify that the overtime rate is calculated based on the employee’s regular rate of pay. Determining this regular rate of pay depends on how the employee is being compensated. If their position has an hourly rate, then the regular rate of pay simply equals this hourly rate. If the employee receives a salary and regularly works the standard forty (40) hours a week, then the regular rate of pay is calculated by dividing the weekly salary by forty (40). This essentially means that the employee’s salary only covers non-overtime, regular work hours.
Furthermore, the regular rate of pay must always be above the minimum wage. California has a considerably higher minimum wage than the federal level. As of January 01, 2019, the minimum wage for companies with twenty-five (25) or more employees will increase from $11.00 to $12.00 per hour. For companies with twenty-four (24) or fewer employees, it will be set at $11.00 per hour. Eventually, the statewide minimum wage will be $15.00 per hour for all employees.
The state and federal laws also differ in the fact that California provides greater compensation for overtime. Remember that FLSA specifies that any workweek hours above 40 will result in wages that are 1.5 times the regular rate of pay. On the other hand, California overtime is structured as so:
- One and a half (1.5) times the regular rate of pay for any work over eight (8) hours in a given workday and forty (40) hours in a given workweek. This is known as “time and a half”.
- One and a half (1.5) times the regular rate of pay for the first eight (8) hours of work on the seventh (7th) consecutive workweek day. This is also considered time and a half.
- Two (2) times the regular rate of pay for any work that is over twelve (12) hours in a given workday. This is commonly known as “double time”.
- Two (2) times the regular rate of pay for any work over eight (8) hours on the seventh (7th) consecutive workweek day. This is also considered double time.
As you can see, California overtime laws favor the workers in terms of how much they can be compensated. In fact, the FLSA does not even have any provision guaranteeing double time; this is unique to the California Labor Code and the wage orders overseen by the DLSE.
Alternative Workweeks and Overtime Pay
Under specific circumstances, an employer has the legal right to implement what are known as alternative workweeks. These are workweeks that schedule employees for four (4) work days with ten (10)-hour shifts as opposed to five (5) work days with eight (8)-hour shifts. Because these 4 days still add up to the legally mandated 40-hour workweek, the employer will not be required to pay the two (2) hours of time and a half after each 8-hour work day. These are particularly prevalent amongst health care practitioners.
However, in order to implement this alternative workweek the employer must meet several requirements. First and foremost, they must provide a written proposal to the employee that outlines this alternative workweek schedule. This proposal may consist of a single option or it may have multiple options from which the employee may choose from. Remember that employers have a considerable amount of leeway in determining when the workweek begins (as long as it does not exceed 40 hours in a week).
Secondly, the employer must also provide a written document that discloses all the effects of the alternative workweek on the employee’s benefits, wages, and work hours. This written disclosure must be provided in addition to the written proposal. There must also be a physical meeting where said effects are further discussed that is held at least fourteen (14) days before the employees may collectively vote on whether to allow this alternative workweek. Section 515 LC explicitly states that the determining vote must be at least two-thirds (2/3) of the employees in order to implement the alternative workweek schedule.
Exempt and Non-Exempt Employees
It is crucial to note that all of these overtime statutes apply only to "non-exempt employees". All these overtime provisions in the various state and federal laws are guaranteed for non-exempt employees. As a result, there are classes of employees, known as "exempt employees", who are not guaranteed these same overtime provisions. Unscrupulous employers will willfully misclassify an employee as exempt in order to avoid paying overtime. This is extremely common and if you believe that you are the victim of this form of wage theft, then you should contact a lawyer who specializes in unpaid wages immediately.
California Labor Code, Section 515 delineates three (3) primary criteria to determine whether an employee is exempt. First of all, the employee in question must earn a salary that is at least two (2) times greater than the state minimum wage. Remember that converting a salary into an hourly rate is done by taking the weekly salary and dividing it by forty (40). Because of the increases in the California minimum wage, as of January 01, 2019 the minimum salary amount for exempt employees is $49,920 per year. Many people mistakenly believe that all salaried employees are exempt and are never entitled to overtime; this is simply not true. If you are compensated via a salary and believe you may be owed overtime wages, then you should confer with an unpaid wages attorney to analyze the specifics of your situation.
Second of all, the exempt employee must spend at least half (50%) of their time doing work that is creative, administrative, intellectual, and/or managerial in nature. This is colloquially referred to as “white collar work” as opposed to physical or manual labor (which is colloquially referred to as “blue collar work”).
Finally, the exempt employee is required to use “independent judgment” and/or considerable discretion in the fulfillment of their professional duties. This essentially means that the exempt employee has a high degree of control over how they do their job. In other words, the more independent the employee is, the more likely it is that they are exempt. For this reason, “independent contractors”, as defined in Sections 3353 LC and 3357 LC of the Labor Code, are the most common type of exempt employee. However, it is still very common for employers to try and circumvent paying overtime wages by willfully misclassifying a non-exempt employee as an exempt independent contractor.
Find An Unpaid Wages Lawyer Near Me
Do not let yourself be bullied by an unscrupulous or dishonest employer. If you worked hard to earn your overtime wages, then you are absolutely entitled to receive them. In fact, California Labor Code, Section 1194 LC specifically states that you have every right to recover said unpaid wages. Whether you decide to sue the employer or file a complaint with a state or federal agency, Stop Unpaid Wages can help you every step of the way. You need us in your corner! Contact our unpaid wage attorney at 424-781-8411 and get your complimentary legal consultation today.
