California has some of the strictest overtime laws in the US. These laws protect workers and go beyond federal rules like the Fair Labor Standards Act (FLSA).
For salaried employees in California, overtime eligibility is determined by state-specific criteria, including job duties and salary thresholds. It’s not automatic and depends on meeting these conditions.
This article outlines California’s overtime rules, breaking down the key details employers and employees need to know.
This Article Covers:
- Do Salaried Employees Qualify for Overtime in California?
- What is the Overtime Exemption Rate for Salaried Employees in California?
- How is the Overtime Rate Determined for Salaried Employees in California?
- Which Laws Govern Salaried Employee Overtime in California?
- Legal Cases on Overtime Violations in California
Do Salaried Employees Qualify for Overtime in California?
Salaried employees in California may qualify for overtime, but it depends on their classification under state and federal laws.
Like the federal FLSA, California categorizes employees as either exempt or non-exempt.
Exempt employees in California are not entitled to overtime.
To qualify as exempt, salaried employees in California must meet these criteria:
- Salary Basis Test: Employees must receive a fixed, predetermined salary that doesn’t change based on hours worked or work quality.
- Salary Level Test: As of January 2024, employees in California must earn at least $1,280 per week ($66,560 annually) to meet the salary requirement for the overtime exemption test.
- Duties Test: Employees must perform executive, administrative, or professional tasks as their primary job functions.
*Some roles are specifically exempt from overtime in California, as detailed in Exemptions from the overtime laws, including outside salespeople, certain computer professionals, and employees covered by valid collective bargaining agreements.
California’s overtime laws go beyond federal requirements.
For instance:
- Non-exempt employees must receive 1.5x their regular pay for hours worked beyond 8 in a day or 40 in a week.
- Double-time pay applies after 12 hours in a workday or for hours exceeding 8 on the 7th consecutive day in a workweek.
If salaried employees don’t meet all exemption criteria, they are considered non-exempt and qualify for overtime under these rules.
Misclassification of employees can result in hefty fines and back pay penalties.
What is the Overtime Exemption Rate for Salaried Employees in California?
The overtime exemption rate in California is significantly higher than the federal standard.
As of July 2024, salaried employees in California must earn at least $1,280 per week or $66,560 annually to qualify as exempt from overtime pay.
This higher threshold applies to employees in executive, administrative, or professional roles who also meet the duties test under federal laws.
Employers in California must meet these stricter salary and duties criteria to classify employees as exempt.
Download the U.S. FLSA Exemption Salary Threshold 2024 Poster now.
How is the Overtime Rate Determined for Salaried Employees in California?
For salaried non-exempt employees in California, overtime pay is calculated based on the “regular rate of pay” which includes salary, commissions, and other forms of compensation.
This regular rate cannot fall below California’s minimum wage, which is $16 per hour statewide as of 2024.
Also, fast food workers earn at least $20.00 per hour, and healthcare facility employees earn up to $23.00 per hour in California.
To determine the regular hourly rate for a salaried employee in California:
- Multiply the monthly salary by 12 to get the annual salary.
- Divide the annual salary by 52 weeks to get the weekly salary.
- Divide the weekly salary by 40 hours (the legal maximum for regular pay).
Overtime is paid according to California Labor Code Section 511:
- Time and a half (1.5x): Paid for hours worked over 8 and up to 12 in a single day or for hours beyond 40 in a workweek.
- Double time (2x): Paid for hours worked beyond 12 in a single day.
Example Calculation:
- A salaried employee earns $1,280 per week.
- Their regular hourly rate is $32 ($1,280 ÷ 40).
If they work 14 hours in a single day:
- The first 8 hours are paid at the regular rate:
$32 x 8 = $256 (regular pay). - The next 4 hours (hours 9-12) are paid at 1.5x:
$32 x 1.5 = $48 per hour.
$48 x 4 = $192 (overtime pay). - The final 2 hours (hours 13-14) are paid at 2x:
$32 x 2 = $64 per hour.
$64 x 2 = $128 (double-time pay).
Total earnings for the 14-hour day:
Regular pay ($256) + Overtime pay ($192) + Double-time pay ($128) = $576.
California’s overtime laws guarantee fair compensation for long work hours, setting higher standards than federal regulations to uphold employee rights.
Find out how you calculate overtime pay in California with our detailed guide.
Which Laws Govern Salaried Employee Overtime in California?
California’s overtime regulations are primarily governed by the California Labor Code, notably Sections 510, 511, 512, 514, and 515, as well as the federal Fair Labor Standards Act (FLSA).
These laws ensure that non-exempt salaried employees receive proper overtime compensation.
Under California Labor Code Section 515, employees must meet specific salary thresholds and job duties tests to qualify for overtime exemptions.
Employers must also comply with California Labor Code Section 226, which mandates accurate recordkeeping for hours worked and wages paid.
Violations of these laws can lead to penalties under California Labor Code Section 210, including “liquidated damages,” which cover the difference between unpaid wages and the standard minimum wage.
Employers may also face state civil penalties and fines of up to $10,000 for violations under the FLSA.
Investigations are handled by the California Department of Industrial Relations’ Division of Labor Standards Enforcement (DLSE).
Legal Cases on Overtime Violations in California
1. California Employer Ordered to Pay $99K for Overtime Violations Involving a Former Salaried Employee
In the case of Morales v. Factor Surfaces LLC, the California Court of Appeal ruled against Factor Surfaces LLC (Factor) for failing to pay overtime wages to a former employee, Byron Jerry Morales (Morales).
Morales regularly worked shifts exceeding 40 hours per week and was promised a fixed daily rate.
However, the employer failed to pay him overtime or maintain proper employment records. After Morales requested overtime compensation, he was terminated.
The court found that Factor provided no reliable records of Morales’ hours or pay.
As a result, the court accepted Morales’ own calculations and awarded him $42,792 in unpaid overtime wages, along with additional penalties for wage statement violations and other labor law breaches. The total judgment amounted to $99,394.16.
Key Lessons from the Case:
- Employers must maintain accurate records of employee hours and pay to avoid disputes.
- Failure to pay overtime and provide wage statements can result in significant financial penalties.
- Courts may favor employee claims if employers fail to meet recordkeeping requirements.
If you want to know more about overtime regulations, read our guide on California Overtime Laws.
Important Cautionary Note
This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.
