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California Overtime Requirements Beginning January 1, 2000


This information is intended to be a summary of California legislation that changes requirements for overtime payments to employees classified as "non-exempt" from
Fair Labor Standards Act and California AB 60 requirements. It is offered for education purposes only and is subject to change without notice. It should not be construed as legal advice. If further information is needed, please contact competent legal counsel. (December 20, 2007)

Governor Gray Davis signed this new law on July 20, 1999 in a San Francisco ceremony, returning California to daily overtime compensation requirements as of the first of January 2000.

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William H. Truesdell, SPHR
Copyright 1999, 2004, 2007

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January 1, 2000 Requirements

1998-1999 Requirements

Earlier Requirements

When must overtime be paid?

  • Over 8 hours in a day and/or over 40 hours in a week must be paid at 1.5 times the normal hourly rate.
  • Over 12 hours in a single day must be paid at 2.0 times the normal hourly rate.
  • The first 8 hours worked on the seventh consecutive day of a work week must be paid at 1.5 times the normal hourly rate.
  • Over 8 hours on the seventh consecutive day of a work week must be paid at 2.0 times the normal hourly rate.
  • Union-represented employees (with collective bargaining agreements) are exempt from these requirements if their contract provides for premium-rate overtime pay for hours worked and they are paid at least 30% more than state minimum wage.
  • One day of rest in seven will be required. That can be met if employees receive the equivalent amount each calendar month. Weekly reconciliation is not required.
  • Salaried, non-exempt employees will have their regular hourly rate computed as 1/40th of their weekly salary.
  • Over 40 hours in a workweek must be paid 1.5 times the normal hourly rate.
  • Over 8 hours in a day and/or over 40 hours in a week must be paid at 1.5 times the normal hourly rate.
  • Over 12 hours in a day must be paid at 2.0 times the normal hourly rate.
  • Any hours worked on the seventh work day in a work week must be paid at 1.5 times the normal hourly rate.
  • Who is affected?

    All "non-exempt" employees as defined by the Legislature and by the Industrial Welfare Commission in its Wage Orders. All non-exempt employees as defined by the Fair Labor Standards Act and those required by state provisions.

    • Employees covered by collective bargaining agreements are exempt from most wage and hour laws, including daily overtime requirements. This includes all state, county and city employees, such as those employed by school districts, water districts and other similar government agencies.

    • Any non-exempt employee in the private sector who is not covered by a collective bargaining agreement must be paid overtime.
    • Exempted private sector employees working in the mining, on-site construction and logging industries. Required they be paid overtime after 40-hours in a work week, consistent with federal law.
    • Exempted independent contractors and contingency workers from daily overtime requirement if exemption was in the contract agreement.
    • Employees covered by collective bargaining agreements are exempt from most wage and hour laws, including daily overtime requirements. This includes all state, county and city employees, such as those employed by school districts, water districts and other similar government agencies.

    What other exemptions exist?

  • Likely continues exemptions for the employer's family members, casual babysitting, truck drivers of rigs with more than 2 axles, school bus and farm vehicle drivers, agriculture (other than Wage Order 14-80), taxicab drivers, ambulance drivers, personal attendants, camp counselors, and others. The Labor Commissioner and further legislation could change that status for any or all of these categories.
  • Provided exemptions for:

    • Pharmacists
    • Ski industry
    • Agriculture
    • Commercial fishing industry
    • Health care industry
    • Stable employees and the horse racing industry
    • Camp counselors
    • Outside sales people
    • Train operators
    • Public sector employees

    Provided exemptions for:

    • Pharmacists
    • Ski industry
    • Agriculture
    • Commercial fishing industry
    • Health care industry
    • Stable employees and the horse racing industry
    • Camp counselors
    • Outside sales people
    • Train operators
    • Public sector employees

    What about "make-up" time?

    When personal obligations require an employee to be absent from work for a short time, the new law allows for that employee to "make-up" the hours without activating a requirement for paid overtime. Employees who are working an alternative workweek schedule are NOT eligible to use "make-up" provisions of the new law. To make-up time, the employee must meet all of the following criteria:

    • Provide a signed written request for each occasion when make-up time is desired.
    • Make-up time must be approved in writing by the employer.
    • Time must be made up within the same workweek as the personal time off was taken.
    • Make-up time may not be used to create an alternative work schedule.
    • Employers are prohibited from encouraging or soliciting workers to make the request.

    Permitted brief absences to be made up within the same workweek as long as overtime was paid for all hours over 40 in the week.

    Time could be made up only on the same day as the absence.

    Can alternative workweek schedules continue if they are now being used?

    If an employee is voluntarily working an alternative workweek of not more than 10 hours per day as of July 1, 1999, no daily overtime payment is required until the 10 daily hours are exceeded.

    Does not apply.

    Does not apply.

    What about exemption categories?

    There are new requirements for qualifying jobs as "Executive," "Administrative," "Learned Professional," "Creative Professional," "Computer Employee," or "Outside Sales Employee."

  • Earnings must be at or above two times the state hourly minimum wage. (Currently, that equals $15.00 per hour or $31,200 per year.) Exempt Computer Employees must earn at least $49.77 per hour as of 1/1/2007.
  • As of 1/1/2007, any physician or surgeon classified as exempt professional must earn a minimum equivalent of $64.18 per hour, or $133,494.40 per year.
  • A new classification, "Salaried, Non-Exempt, Full-Time Employee," requires overtime payment to salaried workers if they don't meet the earnings threshold.
  • Relied on federal provisions for exemption in the Fair Labor Standards Act.

    Relied on federal provisions for exemption in the Fair Labor Standards Act.

    What penalties are there for violating the overtime law?

    New civil and personal penalties have been created. They can be assessed against an employer and the person responsible for the employer's failure to pay overtime accurately (such as a payroll administrator). Penalties may be assessed for violating any wage and hour provision in the Labor Code or any IWC wage order. First offense violations are subject to a $50 civil penalty per employee. Second offense violations are subject to a $100 civil penalty per employee. In addition, any amount due to employees who were incorrectly paid must be provided.

    There were no similar provisions.

    There were no similar provisions.

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