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Are You Entitled to Overtime Compensation?

Arkady Itkin

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The issue of whether an employee is entitled to overtime compensation has been a hotly contested and litigation issue lately in California. The main reason behind his is the fact that whether an employee is entitled to overtime wages is a factual inquiry that depends on the specific facts and circumstance of one's employment.

There are, however, several hard principles that are important to be aware of with regard to overtime wages, whether you are an employer or an employee:

1. Overtime compensation cannot be waived. Any agreement by an employee to waive overtime pay or to accept less that the statutory rate he is due is invalid and unenforceable. In other words, even if the employer and employee sign a written agreement in which they will agree that the employee will not seek overtime pay, the employee will still be able to sue and prevail in later demanding overtime pay for the hours worked in excess of the statutory workweek.

2. Overtime rate of wage - in California, the employer must be employee one-and-a-half time of his “regular" rate for each and every hour worked above 40 hours per week, or for any time worked beyond 8 hours per day. The employer is to pay double time when the employee works over 12 hours in a day. Under state law, the regular rate of pay is calculated by dividing a weekly salary into 40 hours or a normal workweek. Regular rate includes bonuses and commissions that the employee might be earning as part of his wages. That the commission is paid on a basis other than weekly, and that payment is delayed for a time past the employee's normal pay day or pay period, do not excuse the employer from including this payment in the employee's regular rate.

3. Certain employees are exempt from overtime laws. Under federal law, workers employed in a bona fide executive, administrative or professional capacity are exempt from overtime wage benefits.

Certain kinds of employees are also exempt from overtime rules as a matter of law. This include amusement park/recreational park employees, outside sales persons, seamen, criminal investigators, computer system analysts, baby sitters and personal attendants.

If negotiated as part of Collective Bargaining Agreement, employers may require employees to work more than 40 hours per week without overtime pay, provided that no more than 1,040 hours are worked during any period of 26 consecutive weeks; or no more than 2,240 hours are worked during any period of 52 consecutive weeks. Further, State overtime law doesn't apply to employees covered by a collective bargaining agreement that provides an hourly rate at least 30% than the minimum wage, and “premium" wage rates for overtime work.

4. The time that counts toward overtime except regular working hours: Stanby or “on call" time may be compensable under Federal law, if it is spent primarily for the benefit of the employer and his business. This of course, depends on the specific circumstances of each case. Under California law, an employee must be paid for time considered to be on duty while on employer's premises.

Just setup and preparation time may also be compensable if these activities are an integral part of the employee's principal activity, such as oiling, greasing and cleaning an operating machine before using it as part of the job duties.

Travel time and commuting between home and work is generally not compensable under the Portal-to-Portal Act. Even if the employer provides a car for the employee's use in commuting to and from work does not make the commute time compensable.

Meal periods generally not compensable if the employee is relieved of all duties. If, however, an employee may not leave the workplace (gas station employees, 7/11, etc. . . ), the meal period counts as time worked for overtime purposes, even if the employee is relieved of all work duties during mealtime.

Training - time spend attending lectures, training programs or meetings is not compensable if (i) the attendance is outside regular working hours, (ii) voluntary, (iii) the session covers material not directly related to the employee's job, and (iv) if the employee does not perform any productive work during the session.

No seven-day work weeks - California law provides that every employee is entitled to one day's rest in seven and prohibits employers from requiring employees to work more than six days in seven consecutive days. This seventh-day-off requirement does not apply where the employee works fewer than 30 hours a week or six hours in any one day during the week.

5. Taking time off in lieu of overtime - Under California law, employers may not require employees to take time off in lieu of overtime compensation. But employees have the right to request compensatory time off at the rate of one-and-one-half hours off for each hour of overtime worked provided that a written agreement establishes this arrangement before performance of the work.

Arkady Itkin
California Employment Attorney
San Francisco - Bay Area - Sacramento


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