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California Overtime & Minimum Wage Regulations

California features some of the most progressive overtime laws in this country. For example, California overtime laws require daily overtime pay if eligible employees work more than eight hours in a day. Only a few states currently provide this benefit.

What’s in This Article


a table of contents

Minimum Wage


California’s minimum wage is scheduled for annual increases starting in 2017 which will bring the California state minimum wage up to $15 per hour for all employers as of January 1, 2023. Employers will 25 or fewer employees will pay a lower minimum wage than larger employers until 2023. Please see the chart below.

California’s minimum wage was $10.00 per hour as of January 1, 2016 and $9 per hour from July 1, 2014 through December 31, 2015.

California Minimum Wage rates for 2017 through 2023

The current Federal minimum wage rate is $7.25 per hour, effective July 24, 2009.

Numerous municipalities in California have set their own minimum wage rates. For example, the City of Los Angeles has set the following minimum wage rates:

Los Angeles Minimum Wage rates for 2016 through 2021

The following cities in CA have set their own minimum wage rates.  If you work in one of these cities, you should check the specific minimum wage rate for that city:

Alameda, Belmont, Berkeley, Cupertino, Daly City, El Cerrito, Emeryville, Fremont, Los Altos, Malibu, Menlo Park, Milpitas, Mountain View, Novato, Oakland, Palo Alto, Pasadena, Petaluma, Redwood, Richmond, San Diego, San Francisco, San Jose, San Leandro, San Mateo, Santa Clara, Santa Monica, Santa Rosa, Sonoma, South San Francisco, and Sunnyvale.

Overtime Regulations

California Labor Laws require overtime pay to be paid to non-exempt employees under the following circumstances:

  • Any hours worked over 8 per day at 1 ½ times regular pay rate
  • Any hours worked over 40 per week at 1 ½ times regular pay rate
  • First 8 hours on the 7th consecutive day worked at 1 ½ times regular pay rate
  • Any work in excess of 12 hours per day at 2 times regular rate
  • Any work in excess of 8 hours on the 7th consecutive day at 2 times regular rate

For further discussion on California overtime pay laws, see this page.

Generally, employers are free to schedule employees for as many hours as they want. However, under CA state law, there are a few restrictions on mandatory overtime. The following fields cannot be required to work more than 72 hours in a week: Professional, Technical, Clerical, Mechanical (Wage Order 4); Harvest Product Handlers (Wage Order 8); Agricultural Positions (Wage Order 13); and On-site Construction, Drilling, Logging & Mining (Wage Order 16).

When Overtime Doesn’t Apply / Specific Exemptions

Some jobs are considered exempt from the overtime and labor law requirements. If the job falls within an exempt classification, the employee can lose rights to the following:

  • Overtime premium
  • Minimum Wage
  • Reporting Time Pay
  • Rest Period Requirement
  • Meal and Lodging Credit Limits
  • Uniform & Equipment Provisions

California has more rigorous exemption requirements than federal law.  For example, the most common salaried overtime exemptions require that the employee spend at least 50% or more time on exempt duties. This is not a requirement under federal law.  In addition, bonuses, commissions, and incentives cannot be used to meet the minimum salary requirement.

Some specific exemptions from the California overtime and labor law requirements are:

Executive:  To be exempt as an Executive, you must be paid a weekly salary equal to at least 2 times the state minimum wage x 40 hours and:

  • Manage the business or a recognized department or division of the business
  • Direct the work of 2 or more employees or the equivalent of 80 hours per week of subordinate time
  • Have the authority to hire or fire employees or significant influence in the hiring or firing of employees
  • Exercise discretion and independent judgment
  • Engage in these activities more than 50% of the time

Administrative:  A person is considered to be employed in an administrative capacity if:

  • They perform office or non-manual work related to management policies or general business operations.
  • They regularly and directly assist a proprietor or administrative employee or perform special assignments or work requiring specializing training or knowledge, under only general supervision.
  • They perform the above more than 50% of the time
  • They are paid a weekly salary equal to at least 2 times the state minimum wage x 40 hours.

Professional:  An employee is considered to be an exempt professional if:

  • They are licensed by the State of California and working as a lawyer, doctor, engineer, dentist, accountant, etc.
  • They work at an occupation commonly recognized as a learned or artistic profession. Learned or artistic profession means a field requiring an advanced degree (Masters or higher) or work that is creative in nature. Such work should be predominately intellectual and varied in character. Routine mental, manual, mechanical or physical work does not qualify.
  • They must exercise discretion and independent judgment
  • Must be paid a weekly salary equal to at least 2 times the state minimum wage x 40 hours.

Computer Professional:  An employee is considered to be an exempt Computer Professional if:

  • The application of systems analysis techniques and procedures (including consulting with users) to determine hardware, software or system functional specifications; or
  • The design, development, documentation, analysis, creation, testing or modification of computer systems or programs (including prototypes) based on and related to, user or system design specifications; or
  • The design, documentation, testing, creation or modification of computer programs related to the design of software or hardware for computer operating systems.
  • Over 50% of their time is spent in one or more of the following duties:

In addition, they must be:

  • Primarily engaged in intellectual or creative work that requires the exercise of discretion and independent judgment.
  • Highly skilled and proficient in the theoretical and practical application of highly specialized information to computer systems analysis, programming and software engineering.
  • Paid at least $46.55 per hour or an annual salary of at least $96,968.33 and paid not less than $8,080.71 per month as of 1/1/2020.  Prior rates were:
    • 2016 – $41.85 per hour or annual salary of at least $87,184.14
    • 2017 – $42.35 per hour or annual salary of at least $88,231.36
    • 2018 – $43.58 per hour or annual salary of at least $90,790.07
    • 2019 – $45.41 per hour or annual salary of at least $94,603.25

The following employees do not meet the requirements for this exemption:

  • Trainees;
  • Entry-level employees and employees who lack the skill to work independently and without close supervision;
  • Employees who merely operate computers; such as engineers, drafters, machinists who use software such as CAD/CAM;
  • Employees who manufacture, repair, or maintain of computer hardware and related equipment;
  • Employees who write content for, among other things, the World Wide Web or CD-ROMs;
  • Employees who create imagery for effects used in the motion picture, television, or theatrical industry.

Outside Salespersons:  To be classified exempt as an Outside Salesperson, you must:

  • Be 18 years of age or older,
  • Regularly work more than 50% of the time away from your employer’s place of business, and
  • Sell tangible or intangible items or obtain orders or contracts for products, services, or use of facilities.

Truck Drivers:  California law exempt many truck drivers from the overtime pay requirements. The regulations are specific and complex. Please contact us for an evaluation of your situation.

National Service Program Participants:  National Service Programs, such as AmeriCorps, are exempt from California labor laws.

Commissioned Employees:  If more than half of an employee’s pay comes from commissions and their earnings exceed 1 ½ times the minimum wage, they are exempt from California’s overtime provisions. This provision does not apply to minors.

Movie picture projectionists:  Movie picture projectionists are exempt from California’s overtime pay requirements.

Radio and Television Employees:  Announcers, chief engineers and news editors for radio or television stations in cities of 25,000 people or less are exempt from California’s overtime pay requirements.

For further details on California’s overtime exemptions, see this page

Missclassification of Independent Contractors

While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation.

Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay.

Typically, there are several factors that should be considered when determining whether a worker is an independent contractor (a/k/a 1099 worker) or an employee.  California recently passed a new labor law addressing the misclassification of workers.  This law codifies the ABC test used by the California Supreme Court in 2018 and greatly simplifies the determination of employee status.

Under the ABC test, businesses that treat workers as independent contractors must show that the workers:

  1. are free from control and direction by the hiring company;
  2. perform work outside the usual course of business of the hiring entity; and
  3. are independently established in that trade, occupation, or business.

See this page for further details on California labor laws and independent contractors.

Meal Breaks

Employers are required to give employees the following rest and break periods:

  • 30-minute meal break if the employee works more than 5 hours per day – (can be waived by mutual consent if total hours worked is no more than 6 per day)
  • 2nd 30-minute meal break if the employee works more than 10 hours per day – (can be waived by mutual consent if total hours worked is no more than 12 per day and 1st meal period was not waived)

If the employee is not relieved of all duties, meal periods count as hours worked.

For further details on California’s meal break laws, see this page 

Rest Periods

  • 10-minute rest period for any 4-hour work period or major fraction thereof.  (Not required if total time worked is less than 3 ½ hours)
  • To be taken as close to the middle of the period as possible.
  • Counts as time worked
  • Employer can require employee to stay on the premises

The remedy for meal & rest period violations is 1 additional hour of pay. Protection against retaliation for bringing these claims is also provided.

For further details on California’s meal break laws, see this page

Expense Reimbursements

California state law requires employers reimburse employees for all necessary expenditures or losses incurred through the discharge of their duties.  If an employer fails to properly reimburse employees for business expenses, the employee can recover their unreimbursed expenses, interest, and penalties.

For further details on California’s expense reimbursement laws, see this page

Commissions

Under California state law, if an employee’s compensation is based on commissions, the commission compensation agreement must be in writing and specify the way commissions are computed and paid.  Employees who are paid on a commission basis are entitled to be paid once commissions are earned which should be defined by the commission agreement.  In general, commissions must be paid at least twice a month under California state law.

For further information on California commission pay, see this page.

Holidays

Holidays are treated as regular workdays. California does not require additional pay for work done on holidays nor does it require paid holidays, business closings on any holiday, or days off for any particular holiday.

Vacation

California state law does not require that employers provide either paid or unpaid vacation time. However, if paid vacation time is provided, California law considers earned vacation time as wages. Vacation time is earned as labor is performed and cannot be forfeited even upon termination of employment. An employer may place a reasonable limit on how many hours of vacation an employee may earn. Upon termination, all earned and unused vacation pay must be paid at the final rate of pay.

Reporting Time Pay

California Labor Law requires reporting pay for employees who report to work expecting to work a certain number of hours but do not get to work their full schedule due to inadequate scheduling or lack of notice by the employer. The requirements are as follows:

  • If an employee works less than half of their usual or scheduled time, they must be paid for half of the scheduled time, but no less than 2 hours nor more than 4 hours.
  • If an employee reports to work a second time in 1 workday and are given less than 2 hours of work, they must be paid for 2 hours at regular rate of pay.

Reporting time pay is not counted toward hours worked in computing overtime.

Pay Periods

Per California labor laws, in general, wages must be paid at least twice a month on a payday designated by the employer. Overtime wages must be paid by the next regular payroll period following the payroll period in which the overtime wages were earned.

Pay Statements / Pay Stubs

California is one of the few states that have pay stub requirements.  According to California Labor Code Section 226(a), every time you are paid, whether by check, in cash, or otherwise, you must be given a detachable part of the check or a separate writing showing required information. California Labor Code Section 226(a)

Statute of Limitations

The statute of limitation for claims alleging the non-payment of wages is two (2), three (3) or four (4) years from the date of the alleged non-payment, depending on the underlying employment agreement or the type of claim.

  • If the claim is based on an oral agreement, it must be filed within 2 years from the date the claim arose.
  • If the claim is based on a written agreement, it must be filed within 4 years from the date the claim arose.
  • If the claim is for minimum wage, unpaid overtime or other statutory claims, the claim must be filed within 3 years from the date the claim arose, but in many instances employees will be able to go back a total of 4 years under California’s unfair competition statutes.

State Law Penalties/Remedies

Employees can recover overtime wages; meal & rest period penalties; and waiting time penalties under California labor laws. Liquidated damages of double the unpaid overtime wages is provided by Federal law, but not California law. The Private Attorney General Act of 2004 (PAGAA) allows private citizens to pursue fines for violations of the state labor law that normally only the State of California could enforce. Any fines recovered by the citizen are split with 75% going to the state and 25% going to the employee. The employee can recover these fines in addition to any other recovery to which they may be entitled. Some of the most common violations covered by PAGA include:

  • Overtime payment violations
  • Minimum Wage payment violations
  • Failure to give required meal breaks
  • Failure to pay tips & gratuities
  • Failure to reimburse for business expenses
  • Failure to include proper payroll information on paychecks.

Class Actions

Overtime and wage claims may be brought as a class action under California state law. The employees who bring the class action lawsuit as class representatives are usually awarded extra compensation in addition to their individual recovery as a form of “incentive pay.”

Have questions about your own situation? Contact us and we can give you more information and review your specific circumstances. You can submit your information using the convenient online intake form or call The Lore Law Firm.