How To Calculate California Overtime Pay
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How To Calculate California Overtime Pay

Overtime work hours are paid a higher pay in California. A worker can calculate overtime pay earned for their extra work easily by just following a few rules.

A worker's productivity gets paid at standard rates. In California, overtime pay is fixed at two rates, time and a half and double time.

Overtime Pay

Once a worker works past the scheduled limit for work hours, the pay rate is an overtime rate. Adults, and minors 16 or 17 who do not have to go to school, earn time and a half after working 8 hours in a day or 40 hours in a week. Work on the seventh work day in a work week also earns time and a half. Double time is paid for hours worked past 12 hours in a day or past 8 hours on the seventh day in a work week.

Steps

1. Count the overtime hours.

2. If any double time hours are worked, count the double time hours.

3. Figure the overtime pay rate. Multiply the regular rate of pay by 1 1/2.

4. For any double time hours, figure the double time rate. Multiply the regular rate of pay by 2.

5. Calculate the overtime pay. Multiply the overtime hours by the overtime pay rate.

6. For any double time hours, calculate the double time pay. Multiply the double time hours by the double time pay rate.

7. List the overtime pay for both time and a half and double time on a pay sheet.

Overtime Hours

Not all workers work on the same clock. Workers start and end at different times and work on different scheduled days. All workers covered by the overtime laws can earn overtime.

A 40 hour work week worked on five 8 hour days is the standard hours work week.

Workers in a unit at a place of employment can choose to work on a different schedule called an alternative work schedule. These alternative schedules have different overtime pay rules. The schedule change takes a secret ballot vote of two thirds the unit workers to make. The schedules are 40 hour work weeks with more than 8 hours in a day, up to 10 hours in a day. Overtime pay is not paid during the longer regular hours. Schedules with longer than 10 hour days can not be chosen.

No day in an alternative work schedule can be less than 4 hours.

Regular Rate of Pay

The pay given to a worker for their productive hours at work is their regular pay. The regular rate of pay is the amount earned in one hour. Regular Rate of Pay = 1/40 x earnings in a work week.

Any of the common kinds of pay count as regular pay. Hourly pay, salary, commissions, and piece rate.

Bonuses paid for work during productive work hours count as regular pay. These bonuses are paid for the worked hours, the productivity, or proficiency.

Other bonuses chosen to reward the worker for something other than hours worked, productivity, or proficiency do not count in regular pay. Gifts and rewards for good service are examples.

The formula for calculating the regular rate of pay depends on the kind of pay.

• Hourly Pay. Regular Rate of Pay = Hourly Pay.
• Salary. Regular Rate of Pay = weekly salary/40 hours. Note: weekly salary = annual salary/52 weeks. Annual salary = monthly salary x 12 months.
• Piece Rate or Commission. Regular Rate of Pay = Piece Rate or Regular Rate of Pay = Commission. Or, Regular Rate of Pay = total earned during work week / total hours worked during work week. Note: total earnings include money earned during overtime hours and total hours include hours worked during overtime hours.

A group rate can also be used for piece rate workers. Pay = total number of pieces produced/number of productive workers in group. Regular Rate of Pay = pay received by a worker/total hours worked by a worker.

When a worker works two more shifts at different pay rates, a weighted average is used to calculate the regular rate. Regular Rate of Pay = [(hours 1 x rate 1) + (hours 2 x rate 2)]/(total hours).

The regular rate can not be less than the state minimum wage. The minimum wage was set at \$8.00 on January 1, 2008. Or, if the local minimum wage is higher, such as in San Francisco, the regular rate can not be less than the local minimum wage.

Time and A Half

Overtime pay is calculated by multiplying the overtime hours by 1 and 1/2 times the regular rate of pay. Overtime Pay = overtime hours x (1 1/2 x regular rate of pay).

Workers earn this time and a half rate for the hours past 8 hours in a day or past 40 hours in a work week. The first 8 hours on the seventh work day also count at this overtime rate.

Overtime in a week does not begin until after the 40th hour even if the regular work hours in a work week are less than 40 hours. E. g. A worker on a 35 hour a week schedule does not earn any overtime pay until they have worked 40 hours.

Workers on a alternative work schedule earn time and half pay for time worked after the end of the regular scheduled work day until the 12th hour. The first 8 hours on the seventh day earn pay at this rate.

Workers earning piece rate or commission pay multiply the regular rate x 1 1/2 for the first 4 hours of productivity during overtime hours in a work day. Overtime Pay = overtime hours x (1 1/2 x regular rate of pay).

Double Time

Double time pay is calculated by multiplying the overtime hours by 2 times the regular rate of pay. Double Time Pay = overtime hours x (2 x regular rate of pay).

Double time pay is earned during the hours after the 12th hour and hours after the 8th hour on the seventh work day. Workers on an alternative work schedules earn double time during the same hours as workers on a regular schedule.

Workers earning piece rate or commission pay multiply the regular rate x 2 for the the hours of productivity during overtime hours after the 12th hour in a work day. Overtime Pay = overtime hours x (2 x regular rate of pay).

Minors

Minors earn one and a half times their minor regular rate of pay for hours worked past 40 hours in a week. Overtime Pay = 1 1/2 x minor regular rate of pay.

The Clock

An employer has to place a clock at a place in the workplace close enough to read. Workers can use the clock to keep track of overtime hours.

Records

Employers might be asked by an employee or a state officials to look up overtime pay earned during an earlier pay period. Employers are required by law to keep pay records for 3 years.

Acceptable records have the worker's full name, address, and social security number. If the worker is under 18 years old, the record states this fact and gives the birth date.

A worker's file includes:

1. A time record on the start and end of each work day with records on meal periods, split shift intervals, and total daily hours.
2. Total wages paid each payroll period, including the value of board, lodging, or other compensation paid. Overtime pay included.
3. Total hours worked in a payroll period with the rates of pay, including overtime pay rates.
4. If worker paid piece rate, an accurate production record and the piece rate.

The Pay Limit

The money rewards for working overtime hours count enough to write out a list. A worker then can lookup their highest earnings for their longest hours.

Sources:

California Department of Industrial Relations, Industrial Welfare Commission Order No. 1-2001, Regulating Wages, Hours and Working Conditions in the Manufacturing Industry (October 2006).

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