California Overtime Laws

April 16th 2025

Overtime in California is governed by a combination of state and federal laws. This article will break down key aspects of California overtime, including overtime pay rates, employee rights, and how overtime is calculated for different types of workers. We’ll also explore exemptions, penalties for non-compliance, and notable legal cases that have shaped overtime laws in the state.

This Article Covers:

California Overtime Rates

California’s overtime rates are significantly stronger than the Fair Labor Standards Act (FLSA). When the two differ, a company must abide by whichever law is more stringent and provides more benefits to the employee.

Under the FLSA, overtime pay only kicks in after an employee works more than 40 hours in a week. In contrast, California law requires employers to pay 1.5 times an employee’s regular pay for:

  • Any hours worked over 8 hours in a single day
  • Any hours worked over 40 hours in a workweek
  • The first 8 hours worked on the 7th consecutive day of work in a week

California law also requires double time for:

  • Any hours worked over 12 hours in a single day
  • Any hours worked over 8 hours on the 7th consecutive day of work

Given California’s current minimum wage of $16.50 per hour, this would put the minimum overtime pay rate at $24.75 per overtime hour.

It’s important to note that the minimum wage requirement in California varies based on cities. For a comprehensive list of US minimum wage rates, you can download this free U.S. Minimum Wage 2024 Poster.

Learn more about California labor laws.

Overtime Entitlement in California

Most workers in California are entitled to overtime pay if they work more than 8 hours in a day, 40 hours in a week, or all 7 days in a workweek.

It doesn’t matter if you’re paid by the day, week, piece rate, or commission—if you’re eligible for overtime, you should be paid accordingly. Some salaried workers can also be entitled to overtime depending on their job duties and salary level.

Overtime for Tipped Employees in California

Using a tip credit system is not allowed in California. Tips can’t be taken against the employee’s hourly wage, which means employers must pay tipped employees at least the full state minimum wage before tips.

Tips are not to be included in an employee’s regular rate of pay for overtime calculations.

Overtime for Salaried Employees in California 

In California, giving employees a salary does not automatically make them exempt (not eligible) from overtime pay. To be exempted, an employee must earn a monthly salary of no less than 2 times the California minimum wage for full-time employees.

These aren’t the only requirements to be exempted, as there are job duties and salary basis tests as well. 

Non-exempt California salaried employees are still able to receive 1.5 times their normal pay for any hours worked over 8 in a day, 40 in a week, or on the 7th consecutive working day of a week.

To determine what the overtime rate for salaried employees is, you would have to determine the regular rate your pay is equal to by the following steps:

  1. Calculate the yearly wage first by multiplying the monthly income by 12 (months).
  2. Then, calculate the weekly wage, by dividing the annual income by 52 (weeks).
  3. Once you get your weekly wage, divide that by the legal maximum number of regular hours (40).

Learn more about how to calculate overtime in California.

California Overtime for Piece Rate or Commission-Based Pay

In California, commission pay is money an employee earns for completing a task, usually by selling goods or services. Piece rate pay, on the other hand, means the employee is paid based on the number of units they produce, rather than by the hour.

Either of the following approaches may be used to calculate the usual pay rate to determine overtime if you get piece rate pay or commission in California:

  1. For the first 4 overtime hours in a workday, your piece rate or commission is paid at the regular rate. If you work more than 12 hours in a day, those extra hours must be paid at double the regular rate.
  2. For weekly overtime, your total earnings for the week are divided by the total hours worked to get your regular rate. For each overtime hour, you should be paid an extra 50% of that rate. If the hours qualify for double time, you should be paid the full rate again (making it double pay).

If you’re working as part of a group on piece rate, the total pieces made are divided among team members to fairly calculate each person’s pay.

Overtime for Bonuses Received in California

Only bonuses that are “non discretionary” are eligible for inclusion in calculating overtime pay in California.

A nondiscretionary bonus is usually given as compensation for productivity, the number of hours put in, or even as an incentive to employees to continue working for the company. These bonuses given as incentives include flat sum bonuses (which are fixed amounts promised to an employee).

Flat Sum Bonuses

To calculate overtime given on a flat sum bonus, bonuses must be divided by the maximum legal normal hours worked in the bonus-earning duration.

This will result in the flat sum bonus being paid at the usual pay rate.

Any extra hours performed within the bonus-earning period must be compensated at a rate of 1.5 or 2 times the usual rate.

Production Bonuses

Overtime on production bonuses (bonuses given as an incentive for greater productivity for every hour put in) will be calculated by dividing the production bonus by the total number of hours worked during the bonus-earning period.

This will produce the normal pay rate for the production bonus. It is then used to pay overtime at either 0.5 times or 1 time the standard rate.

Discretionary bonuses, gifts given on holidays or other special occasions, or amounts given as a reward that are not related to the work done, are not included in overtime compensation and are therefore not taken into account when calculating the regular pay rate.

Overtime Exemptions in California 

California has special rules that waive the right to overtime pay for specific types of employees. These are called overtime exemptions and they include:

  • Executive, administrative, and professional employees (earning a fixed salary and meeting duty requirements)
  • Computer software professionals paid hourly and meeting specific criteria
  • Outside salespersons
  • Employees related to the employer (spouse, parent, or child)
  • State and local government employees
  • Participants in national service programs (e.g., AmeriCorps)
  • Drivers regulated by federal or California driving hours laws
  • Employees under a valid collective bargaining agreement that meets wage and condition standards
  • Commission-based employees (who earn more than 1.5× minimum wage and over half of pay is commission)
  • Student nurses in accredited nursing schools
  • Taxicab drivers
  • Airline employees working up to 60 hours due to voluntary schedule changes
  • Carnival ride operators (full-time, traveling)
  • Commercial fishing crew members
  • Professional actors
  • Motion picture projectionists
  • Certain radio/TV workers in towns with under 25,000 people
  • Some agricultural employees earning twice the monthly state minimum wage
  • Personal attendants not covered under the Domestic Worker Bill of Rights
  • Teen babysitters working in the employer’s home

For a complete list of categories of affected employees, as well as regulations that apply to each of them, we advise you to visit this official web page of the California Department of Industrial Relations.

Download the U.S. FLSA Exemption Salary Threshold 2024 Poster now.

Refusing to Work Overtime in California

Employees who refuse to work overtime in California can receive disciplinary action, including termination. There are, however, important exceptions to this rule.

Under California law, employees cannot be forced to work on the seventh consecutive day of a workweek without their consent. If an employee chooses to take their legally protected rest day, the employer cannot retaliate against them for refusing overtime on that day.

Overtime Pay for Unauthorized Hours in California

California law requires employers to compensate employees for overtime hours, whether or not it has been authorized.

However, because no authorization was issued, an employer is allowed to invoke disciplinary actions toward the employees.

It is important to note that an employee cannot knowingly work unauthorized overtime and then attempt to obtain compensation from the employer.

Employers must still keep records of their employees’ hours and pay them for all work performed—especially if the work was allowed by the employer and benefits the business.

Penalties for Not Providing Overtime Pay in California

When an employee is not compensated for each hour worked, they are entitled to two different forms of damages under California law.

  1. Actual damages – This means the employee can claim the unpaid amount based on the rate they were promised by the employer.
  2. Liquidated damages – In addition, the employee can claim extra compensation equal to the difference between what they were paid and the state’s minimum wage. This is a set amount allowed by law when wage violations happen.

Other examples of what you may be entitled to if your employer unlawfully withheld your overtime pay are:

  • Back pay
  • Damages
  • Attorney’s fees
  • State civil penalties
  • FLSA violation penalty of up to $10,000

Legal Cases Relating to Overtime Compensation in California

Below, we present law cases relating to fair overtime compensation for employees in California: 

1. Software Company Violates Former Employees’ Overtime Rights

In the case of Sullivan, et al. v. Oracle Corp., et al., former employees of a California-based software company, Oracle Corp, issued a lawsuit against their former employer, stating that they were not provided with overtime compensation. They claimed that Oracle Corp was violating the Labor Code of California, which requires overtime compensation for hours worked above 8 per day or 40 per week. It is important to note that these employees worked mainly in Colorado and Arizona but had traveled to California on several occasions for work.

In addition, the employees demanded compensation for the insufficient overtime pay under the federal Fair Labor Standards Act (FLSA) and also claimed that the company was engaging in unfair business practices by failing to pay overtime, which violates California’s unfair competition legislation (UCL).

The former employees’ claims were found to be covered by the Labor Code’s overtime rules, and the court determined that these allegations qualified as UCL claims. The court ultimately ruled that UCL allegations could not be premised on FLSA allegations for overtime worked within other states.

In the end, the former employees were awarded $1.3 million in overtime compensation damages. This amount is based on the number of hours they worked in California and in accordance with the California minimum wage.

Key lessons from this case:
  • California labor laws, including overtime, related, can apply to employees who work both in California and other states for a California-based employer.
  • This case demonstrates how issues involving overtime pay might be the basis for UCL claims in California. By claiming that the employer’s refusal to pay overtime amounts to overtime payments creates an illegal or unfair business act or conduct that is a violation of the UCL, employees can seek compensation for unpaid overtime wages.
  • The case highlights that employees have the right to overtime pay under the California Labor Code. To prevent potential legal issues and fines, employers must make sure that these overtime regulations are followed.

2. Employee Fired For Requesting Overtime Wins $99,394 in Overtime Lawsuit Against Employer

In the case of Morales v. Factor Surfaces LLC, an employee, who receives a commission, had their normal pay rate determined by their employer, Factor Surfaces LLS, without taking the commissions into account. The issue arose as a result of the employer’s failure to maintain records or offer an alternate method of computation. The employee, Byron Jerry Morales, expressed dissatisfaction about overtime compensation, which led to his termination. 

Morales sued Factor Surfaces, claiming several pay and hours violations, false pay statements, failure to provide wages, failure to give overtime pay or break time, retaliation, and wrongful termination of employment.

While Morales presented documentation and evidence regarding his employment hours and commissions, the employer and his wife provided testimonies throughout the trial but were found to be untrustworthy. Morales’ evidence was accepted by the court, and it was decided that he wasn’t given fair compensation for his overtime hours. Morales was granted a $99,394 settlement that included various damages as well as unpaid overtime pay.

Key lessons from this case:
  • The normal rate of pay for an employee must be accurately established before calculating overtime compensation. All kinds of remuneration that are a part of the employee’s regular pay, such as commissions and bonuses, should be included (according to state overtime laws).
  • Employees are free to ask for overtime pay without worrying about retribution or unfair dismissal. Employers who retaliate against workers who exercise their rights may face legal repercussions.
  • Inaccurate or missing documents might have legal repercussions and expose the company to lawsuits.

3. California Nursing Home Employees Receive $690,000 in Unpaid Overtime and Meal Breaks

A senior care facility in Southern California has been ordered by a federal court to pay their employees $690,696. The employer, Neldy’s R.C. Inc. was found to have broken labor regulations by failing to pay employees their rightful salaries. To conceal their illegal actions, the company purposefully did not add up all hours worked and instead compensated their employees with many paychecks. In addition, they neglected to keep the necessary time and payroll documents and took meal breaks out of their employees’ compensation when they had to work during such breaks. 

The court mandated that Neldy reimburse the impacted employees for lost earnings and liquidated damages amounting to $345,348.

Key lessons from this case:
  • Employers are required to add up all hours a worker puts in, whether they were spread out over several paychecks or accomplished over several shifts.
  • It is against the law to pay workers in successive paychecks to conceal extra hours.
  • When employees are obligated to work during break times, their salaries cannot be withheld by the employer. Meal breaks must be offered and paid for work following the relevant labor rules.

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.