One of the most challenging areas of employment law these days is overtime law. This is because employers repeatedly ignore the overtime laws and hope that they will not get caught. It is not just small or medium-sized employers getting caught, either. Many large, multi-national employers have lost lawsuits for tens or even hundreds of millions of dollars in unpaid overtime.
Changes in the federal regulations that took effect in 2003 have also made the standards even more confusing than they already were, which has caused even more employers to ignore the law altogether. Luckily, California refused to adopt these new, employer-friendly regulations.
The main thing to remember about overtime is that employees are presumed to deserve overtime, regardless of their position. It is up to the employer to prove that one of the listed “exemptions” from the law applies to a particular employee.
A common misconception is that one exemption is for “salaried” workers. Each exemption has its own multi-part test and while some of these tests do include “salary” as one part of the test, there are many more important elements employers must meet to qualify. Accordingly, earning a salary does not in and of itself preclude an employee from being entitled to overtime pay. There are many “salaried” employees who are entitled to overtime pay.
Federal Law
Federal overtime law is governed by the Fair Labor Standards Act (FLSA). It guarantees employees time-and-one-half pay for each hour worked over 40 in a given week.
If an employer’s non-payment of overtime is found to be “willful” by the court, an employee can recover up to three years of past-due overtime. Otherwise, a two-year recovery period applies.
Additionally, employees may recover “liquidated damages” in addition to their unpaid overtime in an amount equal to the unpaid overtime. For example, if an employee recovers $100,000 of unpaid overtime from her former employer, she may also recover an additional $100,000 as a penalty for the employer not paying it in the first place, for a total of $200,000 in recovery.
California Law
The laws under the California Labor Code are much more favorable to employees when it comes to overtime pay than in any other state in the country.
Exemptions
California exemptions from overtime laws are extremely difficult for employers to apply to many employees. There are many positions that would be considered “exempt” from overtime laws in all states except California.
Overtime Payments
California requires payment of time-and-one-half for each hour worked over 8 in one day or 40 in one week or for hours 1-8 on the seventh day of work in a row in one workweek.
Additionally, California requires payment of double time for all hours worked over 12 in one day or over 8 on the seventh day of work in a row in one workweek.
Employees in California can also sue to recover up to four years of back overtime wages under California Business and Professions Code Section 17200.
While California does not have a “liquidated damages” law that provides for double recovery, after application of the four-year statute of limitations and the other employee-friendly provisions employees often recover more than under the FLSA.
OTHER OVERTIME ISSUES
The many laws and intricate aspects of overtime law are far too numerous to address here. However, below is a sampling of some of the common issues that frequently give rise to claims for unpaid overtime.
- Not Being Paid for ALL Overtime
- Not Being Paid Overtime in the Correct Amounts
- “Flex-Time” Issues