What employer likes paying overtime? Most try to avoid it. But did you know that regardless of whether you authorized your employee to work overtime, if they do, you have to pay it? Frustrating, we know, but this is just the tip of the iceberg. If you are handling your own payroll, tyou need to be aware of California overtime laws so you don’t get you and your business into legal trouble.
What constitutes as overtime? How much are you legally required to pay for overtime hours? Who is eligible for overtime?
These are all questions we will give you some answers to in the blog. We would encourage you to do your homework, research the laws, and check out California’s Labor Laws Website.
What is considered overtime?
There are different laws for different states. According to California state law, any time worked over 8 hours in one workday or 40 hours in any workweek requires you pay overtime. A workday is defined as a 24-hour period of time starting at a consistent hour each day that does not change. A workweek is defined as a period of 7 consecutive 24-hour days that begins on the same calendar day each week and does not change. Also, once the employee hits 7 days of working in a workweek, you have to pay overtime. There are some exceptions to these rules so make sure to check out the exemptions list.
What is the legal overtime rate of pay?
If an employee works more than 8 hours in a workday up to and including 12 hours, the rate is one and a half times the employee’s hourly rate. The same rate applies if the employee works up to 8 hours on the 7th workday after working 6 consecutive days in a workweek. However, be careful because if the employee works over 12 hours in a workday you have to pay them double time. Also, if they work over 8 hours on the 7th consecutive workday in a workweek, you have to pay them double time for any additional time worked. Remember, you didn’t have to approve this work time. If they work it, you pay it.
There is a lot involved when handling your own payroll and workforce. Making sure you are compliant should not be an afterthought. If this all sounds a bit overwhelming, you may consider outsourcing your HR and/or payroll services to an employment agency.
Stay up to date on the requirements of payroll for your employees with our free guide to payroll for california business owners!