California Overtime Laws vs. Fair Labor Standards Act (FLSA)

Employees in California enjoy more protective state overtime laws compared to federal law, including the right to overtime if they work more than eight hours in a day (or 40 hours in a week).

California wage and hour laws are much more protective of employees than the federal Fair Labor Standards Act (FLSA). Under FLSA, companies are required to pay overtime compensation only to employees work more than 40 hours in a single workweek.

Under the California Labor Code, companies are also required to pay employees overtime compensation for working more than 40 hour in a week. Yet, in addition to the 40-hour workweek overtime pay rule, California also requires companies to pay overtime when employees work more than 8 hours in a single workday and when employees work on seven consecutive days in the same workweek.

This might not seem like a big difference, but it is. One of the most common violations that occurs under California law, for example, is that companies implement compensatory (comp) time schemes.

For example, suppose a California company wants to avoid paying employees overtime compensation for working more than eight hours in a workday. The company may say something to an employee like, “since you worked 10 hours today, you can work 6 hours tomorrow.” When this happens, the employee will have worked only 40 hours at the end of the week, and therefore would not be entitled to overtime compensation under the FLSA. However, the company is violating state overtime law by not paying the employee overtime for working more than 8 hours in a single workday. Even if an employee works only one day of the week, the employee is entitled to overtime for working more than eight hours on that day.

Although California’s overtime rules are strict, the state lacks the resources to investigate and penalize every company that breaks the law. For this reason, the state has enacted the Private Attorney General Act of 2004 (PAGA), which essentially deputizes private overtime attorneys to sue companies for wage and hour overtime violations on behalf of the state. Given California’s current economic turmoil, reporting overtime violations is more important than ever. Not only do individual employees whose rights are being violated benefit, but the state’s tax coffers do as well. More wages paid to employees means more taxable income for the state of California.

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