How to Calculate Overtime for Salaried Nonexempt Employees

Posted By Alan Burton Newman, PLC || 24-Sep-2015

In California, the general rule is that any work done over eight hours in a day is overtime. The first four hours of overtime are computed at one-and-a-half times (1.5x) the regular rate, and any hours in excess of those four hours is paid at a rate of two times (2x) the regular rate. If the employee works seven days a week, on the seventh day, the employee is entitled to 1.5x the regular rate for the first eight hours and 2x the regular rate after that.

Calculating Regular Rates

Calculating the regular rate requires some analysis. For example, if the employee is paid a salary of $1,000 a week, the regular rate would be based on a 40 hour work week. Therefore, the employee’s regular rate is $25. It does not matter if the employee typically works 60 hours a week. This is to the employee’s benefit—if 60 hours were used rather than 40 hours, the regular rate would be only $16.67!

Assuming that the additional 20 hours consisted of 4 hours per day for 5 days a week, the employee would be entitled to 40 hours at the regular rate of 25 dollars and 20 hours at the rate of 1.5x, which is 37.50 dollars. Based upon the above, the employee should receive a $1,000 base pay and $750 overtime pay. Therefore, the employee’s total wages for the week should be $1,750 rather than the $1,000 paid as salary.

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