California Overtime Laws - Calculating Overtime Pay in California

Understanding and Calculating California Overtime Pay

Free overtime calculation sheet

California overtime rules and exceptions are more beneficial to employees than corresponding federal regulations.

Common Mistake

Not paying required overtime premiums.

Basic California Overtime Pay Requirements

For almost all nonexempt private sector California employees who are not covered by collective bargaining agreements, California overtime pay is based primarily on the number of hours worked in a day. However, you must also account for weekly totals when calculating California overtime.

Calculating California Overtime

The trickiest part of payroll administration is the calculation of overtime. You should use a step-by-step approach. First, identify those hours that must be paid on an overtime basis, then decide whether you need to pay time-and-one-half or double-time for those hours, then determine the "regular rate" you must use to calculate the overtime pay.

Regular Rate of Pay

When calculating overtime pay in California, you must use the employee's "regular rate" of pay, not the normal hourly amount. The regular rate is not always simply an employee's normal hourly amount. The regular rate is a term used to mean the employee's actual rate of pay once all hourly earnings plus many other types of compensation are considered, such as commissions, bonuses and piece rates. The regular rate must include nearly all forms of pay received by that employee.

Weekly Overtime

Only hours worked at straight-time apply to the weekly 40-hour limit. This prevents "pyramiding" of overtime, where an employee earns overtime on top of overtime already paid.

Salaried Nonexempt Employees

Paying a nonexempt employee a salary does not relieve you of your obligation to pay overtime. Nonexempt employees must be paid for all hours worked, including any daily or weekly overtime.

California Overtime Example

Calculating daily and weekly overtime in California can be quite confusing. Below is an example that shows the proper overtime calculations for one common situation.

    Sample: Sarah S. Swingshift - Sarah works the swing shift, usually starting work at 8:00 p.m. each evening and working into the morning of the next calendar day. Thus, each shift is partially in one workday and partially in another, as her employer uses 12:01 a.m. to 12 midnight as its "workday." Sarah's shift begins on Sunday night, the first day of the 7-day workweek used by her employer. Even though Sarah works a nine-hour shift (with a 30-minute meal break), the first four hours are on Sunday, and the remaining five hours (12:00 a.m. to 5:30 a.m.) are on the second workday - Monday. When Sarah returns to work Monday night, the first four hours are included in her time for Monday, and the next five hours on Tuesday. For any day in which Sarah works more than 8 hours, she will be entitled to overtime for hours worked in excess of eight. In order to avoid the confusion caused by working on two workdays each shift, her employer might change the definition of the workday and workweek for employees on the swing shift, perhaps making their workday run from 8:00 p.m. to 7:59 p.m. each day, with a workweek starting at 8:00 p.m. on Sunday.

Overtime Exceptions for Specific Industries in California

The Wage Orders for specific industries contain certain exceptions to the general rules for calculating overtime and premium pay. If you are in one of those industries, familiarizing yourself with the exceptions can help you avoid penalties and may even save you money.

Overtime for Agricultural Employees

Many California agricultural employers are subject to a series of phased-in overtime changes. Agricultural workers have historically received time and a half only after 10 hours per day but that threshold is being reduced in annual increments until 2025 when they will receive overtime pay on the same basis as workers in most other industries. There is a delay for smaller employers and exceptions for some types of agricultural businesses.

Mandatory Overtime Restrictions for Specific Wage Orders

Employees generally have no legal basis on which to refuse to work overtime in California. There are exceptions under certain specific Wage Orders or a company policy or union contract addressing the subject. Employees may also have to be accommodated in terms of refusing overtime hours due to disabilities and religious needs. Under some Wage Orders, there are limitations on the actual amount of overtime you may require employees to work.

Related Resources

CalChamber members have access to several tools and services that help those who manage human resources to work through California overtime pay-related issues, including:

Overtime Calculation Worksheet »
Use this form to calculate pay for your nonexempt employees.