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How do overtime rules differ between California and federal law?

Understanding overtime laws is critical for employers, especially when operating in multiple jurisdictions. Federal laws set the baseline for overtime pay, but California imposes stricter requirements to protect workers. Employers must comply with both federal and state laws, applying the rule that benefits employees most.

Federal overtime laws: A baseline standard

The federal Fair Labor Standards Act (FLSA) governs overtime pay nationwide. Under the FLSA, employees who work more than 40 hours in a single workweek must receive overtime pay at one and a half times their regular rate of pay. The FLSA does not require overtime pay for work over eight hours in a day. Exempt employees, such as certain salaried workers in managerial roles, are not entitled to overtime under federal law.

California’s stricter overtime regulations

California’s overtime laws go beyond the federal requirements. Employees in California earn overtime pay not only for working over 40 hours in a week but also for working more than eight hours in a single day. California also mandates double-time pay for hours worked over 12 in a single day or over eight hours on the seventh consecutive day of work in a workweek. These laws aim to provide greater protections for employees in high-demand industries.

Key exemptions and differences

California’s exemptions from overtime pay are narrower than those under federal law. Many employees classified as exempt under the FLSA might not qualify for exemption in California due to the state’s higher salary thresholds and stricter job duty tests. Employers in California must carefully evaluate whether an employee qualifies as exempt to avoid potential penalties.

Non-compliance with overtime laws can lead to costly legal disputes and damage to a company’s reputation. Employers should ensure that their payroll practices align with California’s laws if they operate within the state. Adopting these practices ensures compliance and fosters fair treatment of employees, creating a positive workplace environment.