How to Calculate Overtime Under California Labor Law?
This post is written to provide employees and employers with an understanding on how to calculate overtime hours under California overtime laws. If you do not like math, you can refer to our easy-to-use online overtime calculator that will do to all computations for you.
Before you read this post, please familiarize yourself with California overtime rules. To recap, California Labor Code section 510 and applicable Industrial Welfare Commission Wage Orders require employers to pay:
- 1) One and one-half of employee’s regular hourly rate for:
- all hours worked in excess of 8 hours up to and including twelve (12) hours in any workday ;
- for the first eight (8) hours worked on the seventh (7th) consecutive day of work in any workweek;
2) Double of employee’s regular hourly rate for:
- all hours worked in excess of 12 hours per workday;
- all hour worked in excess of eight (8) hours on the seventh (7th) consecutive day of work in a workweek.
In general, when an employee works only in excess of the weekly or the daily number of straight-time hours, the computation of overtime hours is straightforward. Things get a little bit more complicated when an employee works more than 8 hours per workday and at the same time – more than 40 hours per workweek.
No “Pyramiding” of Daily and Weekly Overtime Hours
The Wage Orders provides that overtime hours should not be “pyramided” or “double-counted” under both daily overtime and weekly overtime provisions. In other words, once an hour is counted as an overtime hour under some form of overtime, it cannot be counted as an hour worked for the purpose of another form of overtime. When an employee works ten hours in Generic cialis online one day, the two daily overtime hours cannot also be counted as hours worked for the purpose of weekly overtime. See Monzon v. Schaefer Ambulance Service, Inc., 224 Cal. App. 3d 16 (1990).
Example 1: An employee works 12 hours on Monday, Tuesday, Wednesday, and Thursday. How many non-overtime and overtime hours did the employee work that week? Answer– The employee is credited with 4 hours of daily overtime each day worked, for a total of 16 daily overtime hours, and these daily overtime hours cannot be counted for the purpose of determining when to start paying time and a half for hours worked in excess of 40 in a week. Because pyramiding is not allowed, there are no weekly overtime hours, even though the employee worked 48 total hours during the workweek. Only 32 of these hours were regular, non-daily overtime hours, and they are the only hours that count towards weekly overtime computations.
The DLSE provides that the employer must pay its employees overtime compensation for all hours worked in excess of 40 hours per workweek or in excess of applicable daily maximum, whichever number of hours is greater. For example, if during a single workweek, the employee’s total number of hours in excess of 8 hours is 10 hours and at the same time the total number of hours in excess of 40 hours per workweek is 8, the employee is entitled to 10 hours of overtime.
To better understand how to calculate overtime consider the following examples. Each of the following examples assumes that the work week starts on Monday and ends on Sunday and the employee is a nonexempt hourly employee who is entitled to overtime under California overtime laws.
Example 2: Daily Overtime Hours Only
Assume that in one workweek an employee works only three days of ten hours for each workday. The number of daily overtime hours is 6 (3x(10-8) = 6). The number of weekly overtime hours is 0, because the employee worked only 30 hours during the entire workweek. 6 hours of overtime must be compensated at time and one-half the employee’s regular rate.
Example 3: Weekly Overtime Hours Only
Assume that in one workweek an employee works six days of 8 hours for each workday. The employee’s total number of work hours per week is 48, which exceeds a 40 hour workweek by 8 hours. Therefore, the number of weekly overtime hours is 8. The number of daily overtime hours is 0, because the employee never worked more than 8 hours per workday. 8 hours of overtime must be compensated at time and one-half the employee’s regular rate.
Example 4: Weekly Overtime Hours are Greater than Daily Overtime Hours
Assume that in one workweek an employ works six days of 11 hours for each work day. To determine how many hours of overtime the employee worked, we must calculate (1) weekly overtime, (2) daily overtime and (3) compare both numbers. Whatever the number is greater should be deemed as employee’s overtime hours. In this example, the employee’s total number of hours worked during the workweek is 66 (11 x 6) of which 26 hours are weekly overtime (66-40). The employer’s daily overtime is 16 (6x(11-8)=18). Because the employee’s weekly overtime is greater than his daily overtime, the employer shall be compensated at time and one-half of his regular rate for 26 hours of overtime.
Example 5: Daily Overtime Hours Are Greater that Weekly Overtime Hours
Assume that in one workweek an employee works four days of 11 hours for each work day. In this example, the employee’s total number of hours worked during the workweek is 44 (11 x 4) of which 4 hours are weekly overtime (44-40). The employer’s daily overtime is 12 (4 x (11-8)=12). Because the employee’s daily overtime is greater than his weekly overtime, the employer shall be compensated at time and one-half of his regular rate for 12 hours of daily overtime.
Example 6: Double Time for Seventh Consecutive Workday and Hours Over Twelve
Assume that in one workweek an employee works seven consecutive days and has the following schedule:
Monday -11 hours;
Tuesday – 15 hours;
Wednesday – 14 hours;
Thursday – 9 hours;
Friday – 8 hours;
Saturday – 14 hours; and
Sunday – 10 hours;
In this example, in one workweek the employee worked a total of 81 hours. There are 41 hours of weekly overtime (81-40) and 25 daily overtime hours (11-8=3; 15-8=7; 14-8=6; 9-8=1; 8-8=0; 14-8=6; and 10-8=2; 3+7+6+1+0+6+2=25). As you can see there are more weekly hours than daily overtime. Therefore, the employee’s total overtime hours are 41. However, on Tuesday, Wednesday and Saturday, the employee worked more than twelve hours, which are subject to a double-time pay rate. Analogously, on his seventh consecutive day, the employee worked more than 8 hours, which are also should be paid at a double time rate. Therefore, 9 hours should be compensated at double time (15-12=3; 14-12=2; 14-12=2; and 10-8=2). The final calculations are as follows:
Regular Straight Time: 40 hours;
One and one-half Time: 32 hours; and
Double Time: 9 hours.