California Overtime Laws
California overtime (OT) laws mandate that non-exempt employees receive one-and-a-half times their regular pay rate when working extra hours. In certain situations, employees are entitled to double-time pay for overtime work.
Employees who are denied mandatory overtime pay may file a complaint with the Labor Commissioner. Alternatively, they may pursue a wage and hour lawsuit against their employer to recover unpaid wages and attorney's fees.
Just because an employee is paid on a “salary” instead of an “hourly” basis does not mean that employee is exempt from overtime laws. Instead, a test under California law applies.
Who Receives Overtime Wages?
In California, only non-exempt employees are entitled to receive premium wages for overtime hours, and they must be.
- 18 years old or
- 16 or 17 years old and legally permitted to work instead of attending school.
-They must also not fall into one of the exemptions below.
Those not entitled to receive overtime. The following types of workers either do not receive overtime or have special overtime rules:
- Exempt employees under the Wage Orders
- Outside salespersons
- Unionized employees
- Independent contractors
- Employees with a properly implemented alternative workweek schedule (AWS)
- Workers in some specified industries
- 24-hour childcare employees
- Live-in and non-live-in household employees
- Ambulance teams that work 24-hour shifts
- Some residence managers
- Personal attendants at nonprofit companies
- Camp counselors
- Ski industry employees in some situations
- “Extra” players
- Agricultural workers in some situations
The exemptions are governed by California’s published Wage Orders.
Exempt employees
California overtime laws, as well as other wage and hour laws requiring meal and rest breaks, do not apply to exempt employees. To be an exempt employee, workers must typically:
have a “white collar” job (i., not “blue collar” job), which consists of administrative, professional, or executive duties that require the worker to exercise independent judgment and discretion as defined in Wage Orders; and
have a fixed salary instead of hourly wage, and this salary must be no less than twice California’s minimum wage for a full-time job (40 hours/week). For 2025, the minimum exempt salary for businesses is $68,640 year (or $1,320 per week).
Example: Elizabeth manages a small hardware store. She has the authority to hire and fire employees and to make purchasing decisions and she spends all of her time on management and administration. She is paid an annual salary of $39. Because this amount the $68,640 minimum threshold for the white-collar overtime exemption, the store’s owners owe her overtime every time she works extra hours.
Ex-employees working on an hourly basis must still be paid for every extra hour they work. But unless employment agreement says otherwise their overtime pay is no higher their regular pay
Outside salespeople are exempt from overtime pay in California if they meet the following three conditions:
They are at least 18 years old;
At least half of their work time is spent away from their employer’s place of business; and
They sell contracts, services, items, or facility usage.
Unionized employees under a collective bargaining agreement
Unionized employees are not entitled to overtime in California if their collective agreement provides for:
work hours, work conditions, and wages; and
a hourly wage that is 30% or more than California minimum wage; and
overtime hours.
If the collective bargaining agreement does not meet these three conditions, unionized employees are considered “non-exempt and may receive overtime pay in accordance with California wage and hour laws.
Independent contractors
Independent contractors are not entitled to overtime pay California because they are not employees. The legal definition of an independent contractor is someone who:
performs a service under an employment contract that specifies they will produce a specified result for specified pay, and
maintains control over the means by which result is accomplished.
Employees with an “Alternative Workweek Schedule”
Normal California overtime laws for do not apply to workers whose employer has an “alternative workweek schedule.” An alternative workweek schedule is a agreement between:
a group employees and
their employer
that allows the employees to work up to ten hours a day without pay.
To be a valid exception to California overtime rules, an alternative workweek schedule must be approved by at least two-thirds of affected employees in a work unit secret ballot. The must the alternativeweek schedule to the Division of Standards Enforcement within 30 days. Much like union agreements, employers may not retaliate against employees who give opinions about the AWS system that employers disagree with. The right to use an AWS system is highly regulated, and expert advice should be received before attempting to implement one in the workplace.
When Employees Receive Overtime
Employees who are non-exempt receive overtime:
if they work more than the of hours authorized by the alternativeweek schedule, or
if they work more than 40 hours in a single workweek.
Camp counselors
According to Wage Order No. 5, camp counselors are not subject to daily overtime but must receive time-and-a-half overtime pay for
hours exceeding 54 in a week or
when they work more than six days of work in a week.
This is true even where there is an emergency.
Ski industry employees
Under Wage Order 10, resort employees during active ski can agree to schedules up to 48 hours per week overtime applies. They must receive time-a-half overtime pay for working than 10 hours a workday or over 48 hours in one workweek.
Minors
Minors covered by Wage Order 12 time-and-a-half overtime pay for hours worked on the sixth consecutive workday. However, this does not apply to 16- or 17-year-olds not legally required to be in school.
“Extras”
Under Wage Order 12, “extras” in films and TV receive time-and-half overtime for the ninth or 10th hour in a workday. Double-time applies if they work more 10 hours in a workday (calculated in one-tenth hour increments).
Timing of California Mandatory Overtime Rules
Under the time clock rules applicable to hourly employees, non-exempt employees generally may receive mandatory overtime pay if they work more than:
An 8-hour workday (or 10-hour workday in a four-day “alternative workweek,” or a 12-hour day a three-day “alternative workweek”); or
A 40-hourweek; or
Six consecutive days in workweek
Workers may not waive their right to overtime pay.
Over 8 Hours in a Workday or 40 Hours in a Week
Non-exempt employees generally must receive overtime pay if they work more than eight hours in a single workday or forty hours in a week. For companies with an AWS, non-exempt employees are generally entitled overtime pay if they work more than 10 hours in a single workday.
What is a workday? Unless the employer’s policy state otherwise, a workday starts at 12:01 A.M. and runs until midnight. Employees who work more than eight hours on a single calendar day may still be ineligible for overtime if those hours are spread over two different workdays.
Employers may not change workday start times and end times without a legitimate business reason. Employees still must receive overtime pay for working more than eight hours on a particular workday even if they usually work eight or fewer hours a day on average.
Also note that people who normally work fewer than eight hours a day are not entitled to overtime pay if they work the full eight hours. They receive their normal wage rates until eight hours are worked.
Non-exempt also receive overtime pay if they work more than 40 hours in a single workweek. However, working over 40 hours within a week-long period does not automatically entitle employees to overtime if those 40 hours span two separate workweeks.
An employee’s daily overtime hours do not count toward the weekly overtime hours. Thus, an employee must work at least 40 hours at a regular hourly rate before being eligible for overtime based on working more than 40 hours in a workweek, even if the employee is already receiving overtime pay for working more than eight hours on a workday. This rule keeps employees from doing what is known as “pyramiding,” which means receiving double credit for their hours worked.
Over 6 Consecutive Days in a Workweek
In California, non-exempt employees are generally entitled to overtime pay for a seventh consecutive day of work in a workweek. Employers decide when their workweek starts. Therefore, working seven days in a row does not automatically entitle employees to overtime if those seven days span two separate workweeks. In fact, employers may establish different workweeks applicable to different workers, although they cannot change workweeks to evade overtime.
What is the Regular Rate of Pay?
How to you calculate the Regular Rate?
Overtime (and as of recent case law, meal and rest period premiums) is based on the regular rate of pay, which is the compensation normally earned for the work employees perform. The regular rate of pay includes a number of different kinds of remuneration, such as hourly earnings, salary, piecework earnings, and commissions. In no case may the regular rate of pay be less than the applicable minimum wage.
Ordinarily, the hours to be used in computing the regular rate of pay may not exceed the legal maximum regular hours which, in most cases, is 8 hours per workday, 40 hours per workweek. This maximum may also be affected by the number of days one works in a workweek. It is important to determine what maximum is legal in each case. The alternate method of scheduling and computing overtime under most Industrial Welfare Commission Wage Orders, based on an alternative workweek schedule of four 10-hour days or three 12-hour days does not affect the regular rate of pay, which in this case also would be computed on the basis of 40 hours per workweek.
The agreed upon regular hours must be used if they are less than the legal maximum regular hours. For example, if an employee works 32 to 38 hours each week, there is an agreed average workweek of 35 hours, and thirty-five hours is the figure used to determine the regular rate of pay. However, in circumstances where the workweek is less than 40 hours, the law does not require payment of the overtime premium unless the employee works more than eight hours in a workday or more than 40 hours in a workweek. In other words, assuming the employee is employed under a policy that provides for a 35-hour workweek, the law does not require the employer to pay the overtime premium until after eight hours in a workday or 40 hours in a workweek. If the employees work more than 35 but fewer than 40 hours in a workweek, they are entitled to be paid for the extra hours at their regular rate of pay unless they work over eight hours in a workday or 40 hours in a workweek.
The following are examples of how to calculate the regular rate of pay:
If paid on an hourly basis, that amount, including among other things, shift differentials and the per hour value of any non-hourly compensation the employee has earned, is the regular rate of pay.
If paid a salary, the regular rate is determined as follows:
Multiply the monthly remuneration by 12 (months) to get the annual salary.
Divide the annual salary by 52 (weeks) to get the weekly salary.
Divide the weekly salary by the number of legal maximum regular hours (40) to get the regular hourly rate.
If they are paid by the piece or commission, either of the following methods may be used to determine the regular rate of pay for purposes of computing overtime:
The piece or commission rate is used as the regular rate and they are paid one and one-half this rate for production during the first four overtime hours in a workday, and double time for all hours worked beyond 12 in a workday; or
Divide the total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours. For each overtime hour worked, they are entitled to an additional one-half the regular rate for hours requiring time and one-half, and to the full rate for hours requiring double time.
A group rate for piece workers is an acceptable method for computing the regular rate of pay. In using this method, the total number of pieces produced by the group is divided by the number of people in the group, with each person being paid accordingly. The regular rate for each worker is determined by dividing the pay received by the number of hours worked. The regular rate cannot be less than the minimum wage.
If they are paid two or more rates by the same employer during the workweek, the regular rate is the "weighted average" which is determined by dividing their total earnings for the workweek, including earnings during overtime hours, by the total hours worked during the workweek, including the overtime hours. For example, if they work 32 hours at $11.00 an hour and 10 hours during the same workweek at $9.00 an hour, their weighted average (and thus the regular rate for that workweek) is $10.52. This is calculated by adding the $442 straight time pay for the workweek [(32hours x $11.00/hour) + (10 hours x $9.00/hour) = $442] and dividing it by the 42 hours they worked.
Do Employers Need to Include Bonuses in the Regular Rate?
Yes, if it is a nondiscretionary bonus. A nondiscretionary bonus is included in determining the regular rate of pay for computing overtime when the bonus is compensation for hours worked, production or proficiency, or as an incentive to remain employed by the same employer. Incentive bonuses include flat sum bonuses. To properly compute overtime on a flat sum bonus, the bonus must be divided by the maximum legal regular hours worked in the bonus-earning period, not by the total hours worked in the bonus-earning period. This calculation will produce the regular rate of pay on the flat sum bonus earnings. Overtime on a flat sum bonus must then be paid at 1.5 times or 2 times this regular rate calculation for any overtime hour worked in the bonus-earning period. Overtime on production bonuses, bonuses designed as an incentive for increased production for each hour worked are computed differently from flat sum bonuses. To compute overtime on a production bonus, the production bonus is divided by the total hours worked in the bonus earning period. This calculation will produce the regular rate of pay on the production bonus. Overtime on the production bonus is then paid at .5 times or 1 times the regular rate for all overtime hours worked in the bonus-earning period. Overtime on either type of bonus may be due on either a daily or weekly basis and must be paid in the pay period following the end of the bonus-earning period.
Discretionary bonuses or sums paid as gifts at a holiday or other special occasion, such as a reward for good service, which are not measured by or dependent upon hours worked, production or efficiency, are not subject to be paid at overtime rates and thus are not included for purposes of determining the regular rate of pay. Other items, like expense reimbursements, payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or premium pay for Saturday, Sunday, or holiday work (where such premium rate is not less than one and one-half times the rate established in good faith for like work performed in non-overtime hours on other days), and discretionary bonuses, are considered not amounts to include in the regular rate.
Does an Employer Have to Pay for Overtime that Was Worked but not Authorized?
Yes. The proper procedure is to pay the overtime but discipline, if necessary, for the unauthorized work. California law requires that employers pay overtime, whether authorized or not, at the rate of one and one-half times the employee's regular rate of pay for all hours worked in excess of eight up to and including 12 hours in any workday, and for the first eight hours of work on the seventh consecutive day of work in a workweek, and double the employee's regular rate of pay for all hours worked in excess of 12 in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
An employer can discipline employees who violate the employer's policy of working overtime without the required authorization. However, California's wage and hour laws require that the employee be compensated for any hours they are "suffered or permitted to work, whether or not required to do so." California case law holds that "suffer or permit" means work the employer knew or should have known about. Thus, an employee cannot deliberately prevent the employer from obtaining knowledge of the unauthorized overtime worked, and come back later to claim recovery but at the same time, an employer has the duty to keep accurate time records and must pay for work that the employer allows to be performed and to which the employer benefits.
When do Employers Have to Pay the Overtime?
Overtime wages must be paid no later than the payday for the next regular payroll period after which the overtime wages were earned. (Labor Code Section 204) Only the payment of overtime wages may be delayed to the payday of the next following payroll period as the straight time wages must still be paid within the time set forth in the applicable Labor Code section in the pay period in which they were earned; or, in the case of employees who are paid on a weekly, biweekly, or semimonthly basis, not more than seven calendar days following the close of the payroll period.
Section 510(a) of the Labor Code governs overtime pay.
If you need any guidance regarding overtime laws, Havey Law Offices LLC can assist you with legal counsel. Contact us today to receive legal counsel and advice about California employment laws and how to ensure your company stays in compliance.
Last Updated: March 14, 2025
RESOURCES
Regular Rate:
Advanced-Tech v. Superior Court, 163 Cal.App.4th 700, 77 Cal. Rptr. 3d 757 (Cal. Ct. App. 2008)
Ferra v. Loews Hollywood Hotel, LLC, 11 Cal.5th 858, 280 Cal. Rptr. 3d 783, 489 P.3d 1166 (Cal. 2021)
Naranjo v. Spectrum Sec. Servs., 13 Cal.5th 93, 293 Cal. Rptr. 3d 599, 509 P.3d 956 (Cal. 2022)
On Call, Overtime, and Time Worked
Seymore v. Metson Marine, Inc., 193 Cal.App.4th 64, 122 Cal. Rptr. 3d 236 (Cal. Ct. App. 2011)
Griffin v. Sachs Elec. Co., 390 F. Supp. 3d 1070 (N.D. Cal. 2019)
Wage Statements and Penalties
Maldonado v. Epsilon Plastics, Inc., 22 Cal.App.5th 1308, 232 Cal. Rptr. 3d 461 (Cal. Ct. App. 2018)
Unions/CBAs
Vranish v. Exxon Mobil Corp., 223 Cal.App.4th 103, 166 Cal. Rptr. 3d 845 (Cal. Ct. App. 2014)
Araquistain v. Pacific Gas & Electric Co., 229 Cal.App.4th 227, 176 Cal. Rptr. 3d 620 (Cal. Ct. App. 2014)
Wage Payment/Class Actions/PAGA
Razo v. AT&T Mobility Servs., 1:20-cv-0172 JLT HBK (E.D. Cal. Apr. 26, 2023)
Rutti v. Lojack Corp. (9th Cir. Cal., 2009), 578 F.3d 1084
Alcantar v. Hobart Serv. (9th Cir., 2015), 800 F.3d 1047.
Morillion v. Royal Packing Co. (2000), 22 Cal. 4th 575, 94 Cal. Rptr. 2d 3, 995 P.2d 139
Statutes