Since  overtime must be paid, who qualifies, and how much do I have to pay employees who work beyond the regular schedule?

If an employee works either over 8 hours in a day or 40 hours in a week they have qualified for overtime pay, and must be paid accordingly. Putting an employee on salary does not make an employer exempt.  The only exception to that is someone who is considered to be exempt.  To be truly exempt from the employee must earn at least double minim wage.  The other qualifier for the exempt status is the the employee must be supervising at least two or more employees and they must also have a voice in the executive decision making.  What exactly does this mean?  Well, it means that the employee must have a voice in the hiring and firing of the employees that he oversees.  It also means that the employee has the ability to make buying decisions too.

Another qualifier for the exempt status is that 60% of the employees time must be spent supervising other employees.  To make this easier why don’t we make a short list of the basic requirements of the exempt employee.

Exempt Employee Requirements:

  1. The exempt employee must make at least double minimum wage.
  2. 60% of the employee’s time must be spent in the supervisory mode.
  3. The employee must have the ability to both hire and fire
  4. The employee must have a voice in the purchasing of equipment and company supplies.

If the employee can not do the above then they are not exempt from overtime.  I also need to tell you that missclassification of a companies employees is one of the main reasons that employers are finding themselves on the wrong end of a Employee Lawsuit.

What I want to talk about today is the ins and outs of overtime.

When an employee works over 8 hours in a day or 40 hours in a week he/or she must be paid at the rate of one and 1/2 times their normal rate of pay.  Once an employee works over twelve hours in a day they must be paid double their rate of pay.  Should an employee work seven days in a row the first 8 hours are at time and a half and anything over 8 hours only on the seventh day of work in a row must be paid at double time. Employees who work ten or more hours must be allowed a second meal period, but that to is a topic for a different page.  Or if you should have some question please feel free to ask we love questions.

Many times employers will tell us that this employee worked overtime and yet our employee handbook makes it very clear that working beyond the regularly scheduled hours must be granted by management or it is not to be worked. This being the case do I have to pay him since he worked beyond the regular schedule without management approval.  Sadly the answer is yes you must pay the employee for all hours worked.  However, since he did violate company policy you can discipline him or her.

California is a very pro employee state so my advise to any employer is do not mess with the money in any way.

Another way that employers get into trouble with overtime pay is my misclassifying employees as either exempt or independent contractors when they are not.

Independent Contractors and Overtime:

In order for a person to be considered an independent contractor, the following must occur:

  1. The independent Contractor must set his own hours.
  2. Must have his own equipment.
  3. Must work for more than just one company
  4. Must have the right to refuse to work or take the job.
  5. Must pay their own taxes

Today is not the day to be playing some of the games that employers have been known for.  Having employees come early to work but failing to have them punch in, saying employees are independent contractors when they are not, along with failing to pay an employee  when they have worked  overtime without the permission of the company.  All of these kinds of tactics will be found out and come back to haunt you sooner or later.

You can discipline an employee for working unauthorized hours worked beyond the 8 hour shift, but you still have to pay him or her for the time worked.  It does not matter if you have written a policy to the effect that if hours worked that exceeds the regular shift even if the hours worked is worked without company authorization and the employee has signed the employee handbook.  In the state of California employees cannot sign their rights away.  Employers, today need to play by the rules as spelled out instead of trying to create their own which is something that has been going on for years.  Today sooner or later it will come back and eat your lunch.  Should you have any questions please give us a call.  We love questions and we love helping employers do what they want to do in their business but do all of that in a way that will not cost the employer their business.