A Quick Guide to California Overtime Laws 2021

Grant Esser

If you run, manage, or own a business in California, you’re bound to have encountered California overtime laws. California has different overtime rules than every other state in the country. And due to their nature, you can’t afford to mess up on paying your employees overtime where it’s required.

If you’ve moved from another state or just expanded a branch or department into California, be prepared. Your payroll costs will significantly increase if overtime is a regular practice in your business. If not, make sure you’re in the know-how to prevent overtime, keep your payroll costs low, and stay out of messy legal situations.

In this short guide, I’ll go over the key points of California’s overtime laws.

1. Daily overtime
2. Weekly overtime
3. Double-time
4. Daily, weekly and double-time combined
5. 7-day workweek overtime
6. Daily, weekly, double-time, and the 7-day workweek combined
7. Exceptions to California overtime

Please note, this guide should not be taken as legal advice, but is rather a general overview of California overtime policies. If you’re making a hiring, scheduling, or legal decision concerning the matter, or something of similar importance, I recommend talking with a California employment law specialist.

Without further adieu, let’s get into it.

California Overtime Laws

So what is the definition of overtime?

Definition: Overtime is the paying of one and a half times an employee’s regular rate for overtime hours worked.

Let’s see it in action.

Example of Overtime Pay

If an employee’s regular rate of pay is $15 per hour, then they would be paid $22.50 per hour of overtime worked. ($15 per hour + ($15/2) = $22.50 per hour).

If you didn’t know that already, well…..let’s just say I hope you knew that. 🙂

Let’s hop into the first type, daily overtime.

1. Daily Overtime

Daily overtime occurs when an employee works more than 8 hours, but less than 12 hours, in a single workday.

Rate: Daily overtime is time that is paid at 1.5x the employee’s regular rate of pay.

Only a few states, including California, have daily overtime. Let’s apply it.

Example of Daily Overtime

Let’s say your part-time employee, Jill, worked the following schedule this week:

Jill worked a total of 25 hours this week. While she didn’t hit weekly overtime, you should still pay her for daily overtime.

This is because on Monday and Wednesday each she worked more than 8 hours. Out of her 25 hours worked, 4 of her hours will be paid time and half, or overtime.

Conclusion: Jill worked 21 hours of regular time and 4 hours of overtime.

2. Weekly Overtime

Weekly overtime occurs when an employee works more than 40 hours in a single work week.

Rate: Weekly overtime is time that is paid at 1.5x the employee’s regular rate of pay.

No matter which state you’re in, you’re required to pay weekly overtime according to the FLSA (Fair Labor Standards Act). The math here is straight forward.

Note that weekly overtime can never occur if an employee does not work more than 40 hours in a week.

Let’s take a look at Jill’s schedule again.

Example of Weekly Overtime

So how do Jill’s hours break down for the week?

To calculate weekly overtime hours, your simply need to subtract 40 hours from the total amount of hours worked. In this case, 41 hours – 40 hours = 1 hour.

Conclusion: Jill worked 40 hours of regular time and 1 hour of overtime.

3. Double-Time

Double-time occurs if an employee works more than 12 hours in a single day.

Rate: Double time is time worked that is paid at 2x the employee’s regular rate of pay.

Double-time is a variant of overtime and can ramp up your payroll costs quickly. This tends to happen in nursing, emergency, or respondent jobs. If this is you, consider you how might balance out your employee’s schedule over the week better.

It’s kind of like a hyper-extreme daily overtime. Let’s take a look.

Example of Double-Time

Let’s look at Jill’s schedule for a new week.

Because Jill didn’t exceed 40 hours for this work week, it’s not possible that she worked weekly overtime.

But you can see that she worked not only over 8 hours, but over 12, on Monday and Tuesday. Daily overtime and double-time rates will need to be paid to Jill accordingly.

Let’s break Jill’s hours down.

Jill exceeded 12 hours of work on both Monday and Tuesday. Thus, she needs to be paid double-time for those additional hours past 12, each day. So, for Monday, 16 hours – 12 hours = 4 hours of double-time. The same goes for Tuesday. Jill worked 8 hours of double-time.

She also worked 8 hours of daily overtime, 4 on Monday, 4 on Tuesday. After 8 hours of work, up until 12, she was working daily-overtime.

Conclusion: Jill worked 24 hours of regular time, 8 hours of daily overtime, and 8 ours of double-time.

Even though Jill didn’t exceed 40 hours in the work week, she worked long hours in just a few days. California rewards more balanced work weeks and punishes excessive hours in single days, thus, payroll for this week is going to be high.

If this happens in your company, see what you can do to minimize long work days and provide a better balanced work week to your staff. One example is to hire another employee, even part-time, to take a few of these shifts.

4. Daily Overtime, Weekly Overtime, and Double-Time Combined

There is the occasional week where one of your employees may work all types of overtime. It can get a little complicated.

Let’s take a look at Jill’s schedule again for a particularly work intensive week.

So, how much regular time, daily overtime, weekly overtime, and double-time did should Jill get paid for this week?

If you answered 40 hours of regular time, 12 hours of daily overtime, and 4 hours of double-time, you’re correct.

Conclusion: Jill should be paid for 40 hours of regular time, 12 hours overtime, and 4 hours of double-time.

Wait. What about Weekly Overtime?

You might be asking, “What about weekly overtime?” Jill did work over 40 hours in the week, so shouldn’t she earn weekly overtime?

If you’re thinking this way, don’t worry. It’s common to get hung up here. If you did pay weekly overtime here though, you would pay double the overtime you’re required to!

Let me explain.

When Daily Overtime Includes Weekly Overtime

In the previous example, Jill worked 56 hours in the week.

12 of those hours were daily overtime. 4 hours were double-time. This is already 16 total hours of overtime.

If you were to pay an additional 16 hours of weekly overtime because Jill worked 56 hours, you would pay Jill for 32 hours of overtime, total. Then her regular hours would be 24? Or still 40? See, it doesn’t add up.

This is also called ‘pyramiding‘. There’s no need to pay your employee for the same overtime hours more than once.

Here’s California’s take on the situation. It’s what’s we’ll call, for fun, the “Keep Overtime Simple” rule. And goodness, I’m glad they kept it simple this way.

The ‘Keep Overtime Simple’ Rule

When you find yourself in a situation where your employee has worked many daily overtime hours AND many weekly overtime hours, you just need to follow this simple rule.

The “Keep Overtime Simple” Rule: When your employee has worked both daily and weekly overtime in a single week, you only need pay them overtime according to which of these is higher.

For example:

If your employee worked 15 hours of daily overtime and 25 hours of weekly overtime, then you only need pay them 25 hours of overtime for the week. You do NOT need to pay them the combination of the two (40).

The same applies vice versa. If your employee worked 10 hours of daily overtime and 5 hours of weekly overtime, you only need pay them 10 hours of overtime for the week.

Note, this does not exclude double-time hours. Where double-time is worked, regardless of daily overtime and weekly overtime hours, double-time rates need to be paid.

Conclusion: Do not pay double the overtime that is required!

Whenever an employee works more than 40 hours a week, take a look at their daily overtime. Whichever type of overtime they worked more – daily or weekly – is the only one you need to pay them for. It accounts for the rest.

Example of Daily and Weekly Overtime in a +40 Hour Work Week

Here’s Jill’s schedule.

Jill worked 4 hours of daily overtime. She also worked 1 hour of weekly overtime, too. So how many hours of overtime should Jill be paid?

If you answered 4 of hours of overtime, you’re correct. Because 4 hours of daily overtime is greater than 1 hour of weekly overtime, you only need pay Jill according to her daily overtime hours. This will account for her 1 hour of weekly overtime.

Conclusion: Jill should be paid for 37 hours of regular time, and 4 hours of overtime.

Example of Weekly Overtime Hours Exceeding Daily Overtime Hours

Another week of Jill’s, except she worked 6 days this week.

Jill worked a total of 52 hours this week, so by default she will be getting paid at least 12 hours of overtime.

On Wednesday and Thursday each, however, she worked 10 hours, giving her 4 hours of daily overtime.

Because Jill’s weekly overtime (12 hours) is greater than the amount of daily overtime she worked this week (4 hours), you’ll need to pay Jill for all overtime hours worked.

Conclusion: Jill should be paid for 40 hours of regular time, and 12 hours of overtime.

5. Overtime from a 7-Day Workweek

California law states that when an employee works 7 days in a row, consecutively, that entire 7th day is going to be overtime.

Let’s look at a few examples.

Example #1 of Overtime from a 7-Day Workweek

Even though Jill technically worked a part-time week, her employer is still required to pay her 4 hours overtime at 1.5x her regular rate of pay.

This is because she worked 7 days in a row. The 7th day, regardless of when the 1st day started, will be counted as overtime.

As I mentioned, California tends to reward balanced work weeks, and working every day of the week doesn’t fall into that definition.

Conclusion: Jill should be 24 hours of regular time, and 4 hours of overtime.

Example #2 of Overtime from a 7-Day Workweek

Because Jill worked 50 hours in the week, we know that at least 10 hours of overtime should be paid out.

Jill worked 10 hours of weekly overtime. She also worked 10 hours of daily overtime, 2 of which are double-time.

Because Saturday was the 7th consecutive day of the workweek, the first 8 hours of work are considered daily overtime at 1.5x Jill’s regular rate of pay. The last 2 hours of work are double-time at 2x Jill’s regular rate of pay.

In this case, Jill worked the same amount of daily overtime as weekly overtime, so it doesn’t matter which you use to calculate, technically. Regardless, you must still pay Jill for double-time hours worked.

Conclusion: Jill should be paid for 40 hours of regular time, 8 hours of overtime, and 2 hours of double-time.

Exemptions

California overtime laws pertain to all employees that are nonexempt. Nonexempt employees are usually paid hourly, but may also be on salary or paid a daily rate.

If an employee is exempt, one or more of these overtime laws may not apply to them.

To see if you’re employees are exempt or nonexempt, I recommend going straight to the state of California’s website here. You may want a professional alongside you, because the jargon gets technical.

Conclusion

California overtime laws create a few more ways by which employees can work overtime.

If you’re an employer, you need to make sure you’re paying overtime properly. And to do that, you need to first understand the California’s overtime laws.

Let’s review our key takeaways.

7 Key Takeaways

1. Daily and weekly overtime is time paid at 1.5x the employee’s regular rate of pay.
2. Double-time is time paid at 2x the employee’s regular rate of pay.
3. Daily overtime needs to be paid when your employee exceeds 8 hours of work in a single day, up to 12 hours of work.
4. Double-time needs to be paid when your employee exceeds 12 hours of work in a single day.
5. When an employee works 7 days in a row, the 7th consecutive day is all overtime for the first 8 hours worked. All hours past 8 are double-time.
6. Don’t pay double the overtime hours you’re required to. If your employee works both daily and weekly overtime, you only need pay according to which one they worked more. Double-time hours must always be paid out regardless.
7. You will ALWAYS only pay your employee for the exact amount of hours they worked. The rates may differ depending on how overtime was hit, though. For example, if your employee worked 55 hours, you only need to pay for 55 hours of work total, some of which will be overtime.

To learn more about overtime, time tracking laws, and time clock software, check out our time tracking blog.