Overtime pay can be a difficult discussion to have when employees are unsure of their rights and how to calculate the overtime pay they are owed. The first question is whether the employee’s position qualifies for overtime pay. So who qualifies for overtime? Although most employees in California are entitled to overtime pay, there are some important exceptions.
An “exempt” employee is an employee whose job does not qualify for overtime protections because of the type of work the employee performs. Examples of positions that are generally exempt from overtime include doctors, certified public accountants, teachers, licensed engineers, managers who regularly supervise at least two or more employees, and certain sales employees who receive at least one half of their compensation through commissions.
To be an exempt employee, in addition to salary requirements, there are multiple characteristics of a position that the employee must meet. However, it is important to keep in mind that just because your employer says you are exempt does not make it true. Also, just because you are paid a salary does not automatically make you an exempt employee. Many employers missclassify their employees as exempt, when they really should be paid hourly and receive overtime pay. Therefore, it is best to consult with an employment lawyer to determine whether you are properly classified as an exempt employee or whether you are owed overtime pay.
For employees entitled to overtime pay, how is overtime calculated? In California, the overtime rate is 1.5 times an employee’s regular hourly rate for hours worked in excess of 8 hours in a work day or 40 hours in a work week. If hours worked are in excess of 12 hours in a work day, then the overtime rate is 2.0 times the regular hourly rate.
Keep in mind that numerous cities, including Pasadena, have recently increased the minimum wage and have set a schedule for future increases to automatically take place. If you earn minimum wage, these increases will also automatically increase your overtime rates, which are calculated based on your hourly rate.
If an employee is salaried but really should be receiving overtime pay, the calculation of how much overtime the employee is owed is a bit more complicated. First, the employee should convert his or her salary to an hourly rate of pay. To calculate an hourly rate of pay, calculate the weekly salary and divide that number by 40. For example, if your salary is $2,000 per month: $2,000 per month x 12 months = $24,000 per year. $24,000 per year / 52 weeks = $461.53 per week. $461.53 per week / 40 hours per week = $11.53 per hour, which is the regular hourly rate.
Using this example, the employee’s overtime rate for hours worked in excess of 8 hours in a work day or 40 hours in a work week would be $17.29 per hour (1.5 times the employee’s hourly rate). Additionally, if the employee worked in excess of 12 hours in a work day, then the overtime rate would be $23.06 (2.0 times the employee’s hourly rate)
It is important for employees to file a claim for overtime pay as soon as possible since there is a time limit. California overtime laws generally allow employees to collect overtime pay for work they performed for up to three years before the day on which they file a formal claim to collect overtime pay.
CONTACT A LOS ANGELES EMPLOYMENT LAW ATTORNEY AT THE AZADIAN LAW GROUP, PC
To speak with a Los Angeles employment law attorney, contact Azadian Law Group, PC at 626-449-4944 or complete the short form on our website for a free case evaluation.
From offices based in Pasadena and Downtown Los Angeles, our attorneys provide exceptional legal services and representation to people throughout Los Angeles County, Orange County, Riverside County, San Bernardino County, San Diego County and the state of California.