Overtime Law
Overtime Pay Information
Overtime pay is additional compensation for working over 40 hours a week, and in California, over 8 hours in a day. Some employers try to avoid overtime payments by paying overtime within a fixed salary, as a bonus, or by paying one lump sum for overtime no matter how many overtime hours are worked.
Whether someone should receive overtime pay depends on the work that they do, but these general rules apply to all employees:
- The overtime laws are designed to protect employees, and the courts construe them to give employees the maximum protection. Employees are presumed to be entitled to overtime pay, and, under California and federal law, the employer has the burden of proof to show that it properly paid the employee.
- An employee's right to overtime pay does not depend on whether an employee is salaried.
- Work activities govern whether you are entitled to overtime pay. In California, the law looks to what employees do over half their work time. While employers sometimes give employees untrue job titles for the purpose of avoiding overtime pay, this does not affect employees' overtime rights.
An employer must pay overtime pay unless it can prove that an employee is "exempt" from the overtime requirements. Exemptions are employers' legal defenses to paying overtime pay. The employer carries the burden of proving these defenses in court to prevent recovery of overtime pay. The exemptions are briefly listed below:
Executive Exemptions
This exemption applies to employees who spend over half their work time managing businesses or departments of a business. Employers most commonly assert the "Executive Exemption" as their legal defense in overtime cases.
Administrative Exemptions
This exemption applies to employees who spend over half their work time assisting the proprietor or other exempt individual in matters of significance. An administrative employee must work directly with an exempt employee or under only general supervision, and administrative work cannot involve making the products or performing services which the employer sells or markets.
Professional Exemption
The Professional or "Learned or Artistic" Exemption applies to employees who have a license to practice a profession. However, registered nurses, pharmacists, and most school teachers are non-exempt under these laws.
Computer Professional Exemption
This exemption applies to employees who work in highly theoretical aspects of computer software and make over $41.00 an hour.
Outside Sales Person Exemption
This exemption focuses on the employee's duties and the place where these duties are performed. Under California law, an exempt outside salesperson is someone who regularly spends over half their work time engaged in sales away from the employer's place of business.
The federal law is similar except that exempt outside salespeople cannot spend over 20 percent of their work time engaged in the work of other non-exempt employees. If an employee spends significant time performing duties other than selling products or services of the business, then that employee's job merits significant scrutiny to determine the propriety from the outside salesperson exemption.