Overtime

Overtime pay is additional compensation for working over 40 hours a week, and in California, over 8 hours in a day. Whether someone should receive overtime pay depends on the work that they do. Employees are presumed to be entitled to overtime pay, and, under California and federal law, the employer, not the employee, has the burden of proof to show that it properly paid the employee. Overtime does not depend on whether the employee is salaried or hourly. Work activities, not job titles and responsibilities, govern whether you are entitled to overtime pay. An employer must pay overtime pay unless it can prove that an employee is "exempt" from the overtime requirements.

Exemption from Overtime

Exceptions from overtime exist and are governing by fairly complicated rules. An Executive Exemption which applies to employees who spend over half their work time managing businesses or departments of a business. An Administrative Exemption that applies to employees who spend over half their work time assisting the proprietor or other exempt individual in "servicing" a business in matters of significance. A Professional Exemption which applies to employees who have certain licenses to practice a profession or who work in a "learned or artistic" profession. The Computer Software Professional Exemption, which applies to employees who work in highly theoretical aspects of computer software and make over $41.00 an hour. The Outside Salesperson Exemption, which applies to employees who usually work away from the workplace making sales and filling orders. However, the employee cannot spend significant time doing the same work as other non-exempt employees.

Calculating Overtime Pay

In California, for each hour worked over 40 per week or over 8 per day, an employee must be paid one and one-half times their regular rate of pay. Employees in California can recover overtime pay earned as far back as four years ago.

To determine the overtime rate of pay in the cases of salaried employees, California provides that a salary compensates for only 40 hours of work per week. Thus, if an employee is paid $600 a week in salary, the employee's overtime rate of pay is computed by dividing $600 by 40. In that example, $15 per hour is the employee's regular rate of pay. For each hour worked over 40 hours a week, the employee is entitled to be paid $22.50 an hour. Employers are not permitted to avoid overtime payments by claiming that overtime pay is included in a fixed salary, by paying a lump sum amount for overtime no matter how many overtime hours are worked, or by paying overtime pay as a bonus.

Lunch and Meal Breaks

In general, non-exempt employees must receive a 30 minute meal break if they work in excess of five hours. During this time, the employee must be relieved of all duties because it cannot be a working lunch. If an employer fails to give a proper meal break, the employee can recover one hour of pay at their regular rate of pay for each day they are not provided a proper meal break If the work day is less than six hours, the employee can agree to waive the time period. There are other exceptions to the meal break rule for certain types of employees.

If an employer fails to provide an employee a required meal break, the employee can recover one hour of pay for each work day that the meal break is not provided.

Rest Breaks

In general, non-exempt employees must be permitted rest breaks if they work over three and a half hours a day. Breaks must be in the middle of each work period and must be 10 minutes for every four hours worked or fraction thereof. Rest breaks are work time and the employee must be paid for them.

If an employer fails to provide an employee a rest period, the employee can recover one hour of pay for each work day that the rest period is not provided.

Vested Vacation Pay

Vested vacation pay must be paid out at the final rate of pay in accordance with the employer's vacation policies. In general, once vested, vacation pay cannot be forfeited if it is not used within a proscribed period of time. However, employers can place an upper limit on how much vacation time may be acquired. Different rules may apply if the employer establishes a federal ERISA funded vacation plan.

Going to Court for Wage and Hour Violations

Employees have the legal right to go to Court to recover compensation or penalties for violations of the California Labor Laws. However, there may be concerns about the costs of a lawsuit that prevent employees from taking action. Fortunately, in recent years, there have been many advances made in the area of enforcing employee wage and hour rights through class actions filed on behalf of employees. One of the advantages of a class action is that a lawsuit can be filed on behalf of many similarly affected people, so that the Court can issue one ruling that helps a large number of employees and thereby vastly reducing the cost to each employee of the case. Typically in a class action, the law firm that brings the case will pay the costs of the suit with the expectation that the costs will be reimbursed from the fund created for the class. This scenario makes it possible for employees to obtain the benefits of labor laws without having to pay high legal fees or costs out-of-pocket.

Our firm has experience with labors cases and class actions and if you have questions involving a labor dispute please call us at (858) 259-7790 or contact our firm.