How to Calculate Overtime in California: Daily, Weekly, and Double Time Pay Explained

California overtime laws require daily and weekly overtime pay for nonexempt workers, including salaried, commissioned, and piece-rate employees. This guide outlines calculating overtime, daily double time, regular pay rates, and employer responsibilities without addressing alternative workweek schedules.

By Brad Nakase, Attorney

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Table of Contents

Introduction

Step 1: Establish Your Workweeks and Workdays

Step 2: Determine how many hours an employee worked in a workday and a workweek

Step 3: Calculate the Daily Overtime Due

Step 4: Calculate the Weekly Overtime Amount Due

Step 5: Contrast Overtime on a Daily and Weekly Basis

Step 6: Find out the employee’s standard pay rate

Step 7: Provide the worker with overtime compensation that is owed

Introduction

Generally speaking, California’s overtime laws mandate that every nonexempt worker—including domestic helpers—get overtime compensation equal to 1.5 times their base pay for any hours beyond 8 a day & 40 a week. All nonexempt workers must abide by these overtime regulations. Although the majority of nonexempt workers are often paid on hourly rates, legislation for overtime in California also covers nonexempt workers who get compensation on a daily rate, salary basis, or piece rate. Refer to the explanations provided at the conclusion of this guide for further information on how overtime rates are calculated for rates that are not hourly.

Many exemptions exist for overtime in California laws. An “exemption” denotes that a specific group of workers is exempt from the overtime statute or regulation. A worker is considered nonexempt if they don’t fit the criteria of a particular exemption. A number of exceptions exist to overtime in California as well. In contrast to the above-mentioned criteria, an “exception” occurs when overtime is given to a specific group of workers.

It is not a how-to article for alternative workweek arrangements. Your company’s daily overtime policies will change if it has a different workweek plan. Check out California’s Guide to Alternative Workweek Schedules.

This how-to manual solely covers the actions required to adhere to overtime in California under standard regulations. It is not intended to be and should not be interpreted as legal advice; employers should get additional advice from independent attorneys.

Step 1: Establish Your Workweeks and Workdays

Workday

When nonexempt workers put in more than eight hours during one workday, they have the right to overtime in California. Therefore, California employers must determine the start hour of the workday in order to appropriately compute overtime pay.

A workday is any continuous 24-hour timespan beginning at an identical time every calendar day, according to California law. It doesn’t matter what time of the day the workday starts. For various employee classes, alternative workdays can be set up. The workday is deemed to begin at 12:01 am and end at midnight if a company does not specify a start time.

It is not permitted to average hours over two or more workdays; instead, daily overtime in California must be paid depending on the number of hours performed in any one workday. Except when there is a valid business need to alter it, a workday that has been set by the company shall stay constant and unaltered.

Workweek

Since nonexempt workers have the right to overtime compensation if they put in over forty hours during a single workweek, companies should determine which day of the week the workweek starts in order to properly compute overtime compensation.

According to the laws of California, a workweek is any seven days in a row that begin on the same day of the week and at any time on any day, provided that it is regular and set. Different employees may have varied work weeks set by their employers, but once someone’s workweek is set, it doesn’t change based on their working schedule. The workweek of an employee can only be changed if it is meant to be fixed and isn’t done to avoid the company’s overtime requirement.

Step 2: Determine how many hours an employee worked in a workday and a workweek

According to California law, workers must keep account of the start & end times of their shifts, food breaks, and other activities. The company will calculate the number of hours worked for each workday & workweek (as previously mentioned) based on these time recordings.

Note: We will use whole number hours sans any minutes and partial hours in order to make the illustrations in the next sections simpler. Additionally, we’ll assume that the workweek coincides with the Sunday–Saturday calendar week.

Step 3: Calculate the Daily Overtime Due

Nonexempt workers are required by California law to receive the following daily overtime compensation:

For all hours over eight, up to & including twelve in a day of work, and for the initial eight hours on the 7th successive day of duty in a workweek, the employee will receive 1.5 times their regular pay rate.
For every hour over twelve in a workday and every hour over eight on the 7th successive day of a workweek, the employee will receive double their regular pay rate.

Step 4: Calculate the Weekly Overtime Amount Due

Overtime in California must also be calculated on a weekly basis. According to the weekly overtime regulation, overtime is required to be compensated at a rate of 1.5 times the ordinary rate of wage for every hour beyond 40 in a workweek.

Just add up all of the hours that were put in during the workweek.

The employee is not eligible for any weekly hours of overtime in California if they worked 40 hours or less during that week. For instance, 38 sum of hours equals zero hours of overtime.
Weekly hours of overtime are computed by subtracting the total number of hours worked from 40 if the worker works more than 40 hours during the workweek. For instance, 44 hours minus 40 is the requisite four hours of overtime.

Step 5: Contrast Overtime on a Daily and Weekly Basis

In order to guarantee that every hour of overtime gets paid each workweek, California requires businesses to calculate overtime across both daily & weekly hours. This does not imply that companies must pay overtime for the same number of hours worked twice.

When an employee’s daily hours of overtime (all paid at 1.5 or 2 times the regular rate) equal or exceed their weekly hours of overtime, the employer is required to pay out in accordance with the overtime (daily) regulations for that particular employee. (All of the weekly overtime has already been tracked down and paid.)
The employer is required to make sure that all weekly hours of overtime get compensated along with the daily overtime if the total number of weekly hours of overtime is greater than the entire number of daily hours of overtime for that workweek. Any extra time hours that are mandated by the daily overtime regulations must be recognized and compensated appropriately.

Regardless of the number of hours worked above forty, employers should constantly review the daily overtime regulations because some hours may need to be covered at double time, whereas weekly overtime just needs hours to get paid at 1.5 times the standard rate.

Examining the total number of straight-time hours after calculating daily overtime is a different approach to ascertaining whether or not weekly overtime will be greater than what was calculated from daily overtime.

No changes are needed to comply with weekly overtime regulations if the employer decides, after adhering to the daily overtime regulations, that the worker should be compensated for 40 hours or fewer hours of straight time. Along with the daily overtime previously calculated, any hours exceeding 40 that are the consequence of daily overtime ought to be compensated at a rate that is 1.5 times the ordinary rate. This ensures compliance with both weekly and daily overtime in California rules.

Step 6: Find out the employee’s standard pay rate

The standard pay rate for the worker is the basis for overtime compensation under California law. Once the number of overtime hours has been established, the employer must ascertain the employee’s normal rate of pay, which may be either 1.5 times or 2 times the usual rate.

The regular rate, which excludes flat-rate incentive payments, is the mean hourly rate determined by dividing the entire amount of employment pay (excluding statutory exclusions) for each given week of work by the overall number of hours legitimately worked.

According to the Supreme Court’s ruling in Alvarado versus Dart Container Corp, overtime compensation that can be attributed to a company’s “flat-sum” bonus—that is, a bonus amount that’s not based on a worker’s total hours worked—should be computed by dividing the bonus amount by the overall no. of non-overtime hours instead of by the total number of hours worked.

Here are a few illustrations of how to figure out the usual pay rate.

1. Nonexempt hourly workers

The standard rate of compensation for hourly employees is calculated by dividing the overall number of hours actually worked by the amount paid per hour, including any nondiscretionary incentives and commissions.

Example: That sum represents the standard rate of compensation if the worker is paid only on an hourly schedule. For instance, overtime compensation for an employee making $16 an hour would equal 24 dollars at the time and a half & 32 dollars at double the time.

2. Commission-based or piece-rate workers

The usual pay rate for calculating overtime may be determined using one of the methods that follow if the worker is paid on a commission or piece basis:

For the first four extra hours in a workday, the employee gets paid one and a half times the standard rate, which is the commission or piece rate. For any hours beyond twelve on a weekday, the employee is paid double time.
The worker’s total wages for the workweek can also be divided by the number of hours they worked. Employees are entitled to half of their regular rate for time-and-a-half hours and full pay for double-time hours for each hour of overtime.
For piece employees, a group rate is a valid way to determine the standard rate of pay. When employing this strategy, the group’s total output is divided by its membership count, and each member is compensated appropriately. The pay received is divided by the amount of hours performed to arrive at each worker’s normal rate.

3. Nonexempt salaried employees

A nonexempt employee’s normal, non-overtime hours are typically the only remuneration provided by a fixed salary. An employee who is salaried and not exempt is subject to the same weekly and daily overtime regulations.

An employee’s usual hourly rate is equal to 1/40th of their regular weekly wage for calculating the overtime pay rate for a full-time, salaried, nonexempt worker who works 40 hours per week.

To determine the hourly rate payable to a nonexempt worker who receives a fixed weekly income, follow these steps:

To calculate the annual wage, multiply the monthly compensation by 12 (months).
The weekly wage is calculated by dividing the annual income by 52 (weeks).
The standard hourly rate is calculated by dividing the weekly compensation by the total number of normal hours worked up to the statutory weekly maximum of 40.

Step 7: Provide the worker with overtime compensation that is owed

According to California law, overtime employees must get their pay by the scheduled deadline of the paycheck period that follows the one in which they earned overtime. Straight-time hours have to be compensated on the standard payday of the period of payroll in which they’re earned, even though the legislation allows payment for overtime in California to be postponed by a single payroll cycle.

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How to Calculate Overtime in California: Daily, Weekly, and Double Time Pay Explained

Introduction

Step 1: Establish Your Workweeks and Workdays

Step 2: Determine how many hours an employee worked in a workday and a workweek

Step 3: Calculate the Daily Overtime Due

Step 4: Calculate the Weekly Overtime Amount Due

Step 5: Contrast Overtime on a Daily and Weekly Basis

Step 6: Find out the employee’s standard pay rate

Step 7: Provide the worker with overtime compensation that is owed

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