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| CALIFORNIA
OVERTIME LAW In California, overtime compensation is governed by the California Labor Code and the Wage Orders of the Industrial Welfare Commission. Since January 1, 2000, employees have been entitled to "daily overtime" at time and one-half when they work in excess of eight (8) hours in a day or "weekly overtime" at time and one-half when they work in excess of forty (40) hours in a week. In addition, employees are entitled to double time for hours worked in excess of twelve (12) hours per day and hours worked in excess of eight (8) hours per day on the 7th consecutive day worked. California employees are also entitled to penalties equal to a day's wages for up to 30 days following termination if employers fail to pay them in full, including at the time of termination. To be exempt, employees must be salaried and fall under one of the overtime exemptions. Employers must pay salaried exempt employees their full salary for any week where the employee was ready, able, and willing to work, and during which the employee performed any work without regard to the number of days or hours worked. FEDERAL OVERTIME LAW The Fair Labor Standards Act of 1938 ("FLSA") governs minimum wages and overtime compensation. The FLSA requires employers to pay employees overtime compensation at the rate of one and half times their regular hourly wages for all hours worked in excess of 40 hours per week. The FLSA provides that employees may sue to enforce the overtime provisions of the FLSA. Employees may seek to recover all unpaid overtime compensation plus an equal amount of liquidated damages, as well as attorneys' fees. Employers have often attempted to evade the overtime compensation requirements by misclassifying employees as "exempt." One exemption covers employees whose job duties are primarily managerial or administrative. However, employees who are basically production workers - even if white collar, and even if well compensated - do not fall within these exemptions. THE MYTH OF SALARY Salaried employees are not necessarily exempt from overtime laws. This myth comes from the requirement of certain overtime exemptions that the employee be paid a salary. That requirement is just one of many -- and it is the easiest to meet. The fact remains that there are many people who are paid a salary who are entitled to overtime, and there are many people who are paid hourly who dont get any overtime. Suffice it to say that if someone told you that you are not entitled to overtime just because you are paid a salary, that is just plain wrong. If you are paid a salary, you are still entitled to overtime unless you meet all of the requirements for one of the exemptions. These additional requirements are difficult to meet and many people in simply do not meet them. If you have questions about whether your particular job would be entitled to overtime, you can email me a brief description of the type of work that you do and I can easily take a look at it and get back to you. MOST COMMON OVERTIME EXEMPTIONS Overtime laws do not apply to all employees. Certain employees are considered exempt, and are not entitled to overtime pay. Employees who are exempt from overtime laws usually have significant responsibility within a company. You are not exempt simply because your employer gives you a certain title or pays you a salary. You are only exempt 1) if you are paid a salary equal to at least twice the current minimum wage (currently $540 a week before taxes) and 2) fall under an overtime exemption. Exemptions from overtime law generally fall into the three major categories, described below: 1. Exemption for Managerial or Executive Employees State or federal overtime laws do not generally cover employees who are considered managerial or executive. To be considered a managerial or executive employee, you must: a) Directly and regularly supervise the work of two or more full-time employees; and b) Regularly be allowed to make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions); and c) Make recommendations about the hiring and firing of employees, and have enough authority within the company that your recommendations are given serious attention. 2. Exemption for Professional Employees State or federal overtime laws do not generally cover employees who are considered professional. To be considered a professional employee, you must be licensed or certified in: a) Law (does not include paralegals) b) Architecture c) Medicine (does not include nurses) d) Optometry e) Dentistry f) Engineering g) Teaching h) Accounting (includes only certified public accountants.) You must also spend at least half of your work time performing duties that are typical of your profession. Also, under California state law, you may be considered a professional if you spend at least half of your hours doing work in a field that is commonly considered a learned or artistic profession. For your job to be considered, you typically need a college degree or pursued other paths of intellectual study. Also, your work must be original and creative in character and depend primarily on your own invention, imagination, or talent. Some high-tech and computer industry workers will fall into this category. This exception is very limited, so you should not assume you qualify just because your job involves some creativity. 3. Exemption for Administrative Employees State or federal overtime laws do not generally cover employees who are considered administrative. To be considered an administrative employee, you must: a) Spend more than half your time on work that is intellectual; and b) Regularly make independent decisions without direct supervision about matters that are important to the company (this means that the work you do is related to important company policy or business decisions); and c) Do work that is outside the production process. Also, to be considered an administrative employee, you must do at least one of the following: a) You must regularly and directly assist the owner of the company or another manager or administrator; or b) You must perform work that requires special training, experience, or knowledge without direct supervision, or with minimal supervision; or c) You must perform special assignments that require you to make decisions that affect the company with only general supervision. MEAL AND REST PERIODS California law requires that full-time workers receive an unpaid half-hour meal period and two ten minute rest breaks per day. If the worker does not receive such a period, then the worker must be paid for the time. As of October 1, 2000, California law also requires an additional hour of compensation for every day a worker is not afforded the required meal period and an additional hour of compensation for every day a worker is not afforded the required rest periods. Specifically, the law requires: No employer shall employ any person for a work period of more than five (5) hours without a meal period of not less than 30 minutes, except that when a work period of not more than six (6) hours will complete the day's work the meal period may be waived by mutual consent of the employer and the employee. Unless the employee is relieved of all duty during a 30 minute meal period, the meal period shall be considered an "on duty" meal period and counted as time worked. An "on duty" meal period shall be permitted only when the nature of the work prevents an employee from being relieved of all duty and when by written agreement between the parties an on-the-job paid meal period is agreed to. The written agreement shall state that the employee may, in writing, revoke the agreement at any time. California Code of Regulations, Title 8, Section 11040. As you can see, the law is fairly protective of an employee's right to take meal breaks and eliminates the illegal practices of having the employee "waive" the meal break or having the employee take the break at the beginning or end of the shift. The law provides the only circumstates where the meal period can be waived by the employee -- when the total work day is only 6 hours, and subject to a written agreement where the job does not permit a meal break. You should note that there are very few situations were the job does not actually permit a meal break. For instance, if you are a security guard at a remote location, it would not be realistic to stop guarding for 30 minutes while you take a break. In such as a case, if you had a written agreement, you could work through your meal period. On the other hand, if you work in a small store and are the only one watching the store, this would likely not qualify. The reason is that you could simply close the store and take your meal break. It should be noted that most jobs where you work with other people who can cover your shift for 30 minutes will never qualify for the "on duty" meal period. Another common violation by employers is to have the employee take the break at the beginning or end of the shift. For instance, they have the employee just work 7 1/2 hours and then take their lunch break for 30 mins. Rather than return after the 30 mins, they just have the employee go home. This policy is clearly illegal because the law states that you can not work more than 5 hours without a meal break. Thus, if you work 7 1/2 hours without a break, it does not matter if you could take one before or after you clock out -- it is still illegal. Only bona fide meal breaks that occur at least every 5 hours are allowed under the law. For your free overtime evaluation, please click here. |
