I Work Overtime — Why Don’t They Pay Me Overtime?

David Graulich Posted by David Graulich.

David Graulich is president and founder of Maxfield Public Relations, a communications consulting firm based near San Francisco.

Wronged at Work! I Work Overtime – Why Don’t They Pay Me Overtime? By David Graulich, Esq.

Wronged at Work!

I Work Overtime – Why Don’t They Pay Me Overtime?

By David Graulich, Esq.

At first glance, California’s overtime (OT) laws seem clear-cut. Eight hours of labor are one day’s work.  If a nonexempt employee works beyond eight hours in any work day, or more than six days in any work week, the employer is required to pay overtime. A work week doesn’t have to correspond to a calendar week.

OT rates are set by law. They are:

One and one-half times the regular rate of pay for all hours worked in excess of eight hours, up to and including 12 hours in any work day, and for the first eight hours worked on the seventh consecutive day of work in a work week.

Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any work day. Double rate also applies for all hours worked in excess of eight on the seventh consecutive day of work in a work week.

What appears clear-cut on paper is complex in reality. Overtime disputes, known as “Wage and Hour cases,” are a constant source of lawsuits in California between employers and employees.

So you are working OT but not getting paid OT. What’s going on?

One common problem is when employees are expected to work “off the clock.” Their labor beyond eight hours a day doesn’t get recorded or compensated. Timecards and timesheets are altered in furtherance of the scheme. Permitting or directing such activity violates the law, and exposes employers to substantial fines and penalties.

For example, imagine that a restaurant requires waiters and waitresses to clock out in the kitchen at the end of an eight-hour shift. Then, when the workers leave through the dining area, they are required to re-fill the salt and pepper shakers “off the clock.” This practice would be a violation of the Labor Code.

Another area of controversy: whether an employee is “exempt” or “non-exempt.” Exempt work is managerial, professional, and administrative, and involves independent judgment and discretion. Exempt employees have authority for hiring and firing other employees. Engineers, doctors, teachers, journalists and architects are examples of exempt professionals. (A lawyer who works all day and late into the night does not get paid overtime, as I know from painful personal experience).

In contrast, nonexempt employees are protected by OT laws. The presumption in California is that all workers are nonexempt unless shown otherwise.

Nonexempt employees are often referred to as “hourly” workers, but that is misleading. It is incorrect to say, “I’m on salary, so I must be exempt.” A worker can be paid an annual salary and still be nonexempt. In this situation, the base hourly rate for OT is calculated by dividing the annual salary by 52 weeks, and dividing again by 40 hours per week.

What if your job title says “Manager”? Does that alone make you exempt? The answer is no. California law is designed to protect people who are managers in name only—that is, given a fancy title to deny them overtime pay, but expected to “primarily” perform the work of nonexempt employees.

“Primarily” means more than 50% of the employee’s time. A frequent violation occurs in the retail industry, where a “store manager” has exempt responsibilities, such as re-ordering inventory and hiring associates. However, this “manager” spends more than 50% of his or her time in nonexempt tasks: cashiering, stocking, unloading pallets, hauling inventory into the storage room, mopping floors. These “managers” routinely work ten and twelve hour days, but are not paid overtime.

Then there’s the question of classification: are you an employee or an independent contractor (IC)? If you are an IC, you don’t get paid overtime, nor do you get meal and rest breaks.

Courts apply a wide range of factors to determine the correct classification: who provides the tools? Who sets the schedule? Is the work performed on-site or off-site? Does the worker perform the same labor for other entities? How much control does the person paying the money have over the person providing the labor? The more control that can be demonstrated, the more likely it is that the worker is an employee rather than independent contractor.

There’s much more to this controversy than I can cover here. If you want to learn more about California’s overtime law, a good place to start is the Web site of the Department of Industrial Relations (http://www.dir.ca.gov).


David Graulich, Esq. is an employment lawyer who represents people who have been wronged at work. He helps clients with problems such as discrimination, harassment, and retaliation. David welcomes questions and comments about Wronged at Work! Contact him at [email protected] or (916)966-9600. Disclaimer: This column is not intended, and should not be construed, as an offer of legal advice. Consult a qualified licensed attorney for counsel on a specific legal problem.