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I’m paid a salary. Does that mean I’m not entitled to overtime?

On Behalf of | Jul 19, 2021 | Employment Law

No. Whether you are entitled to overtime depends on whether you are an exempt or nonexempt employee, not whether you are paid a salary. It is not true that salaried employees are always exempt from overtime and other Industrial Welfare Commission rules.

In fact, most employees are nonexempt, meaning they are entitled to overtime. “Exempt” means there is a specific exemption for that type of employee or the overtime law itself doesn’t apply to a certain classification of employees. An exemption is a special rule, an exception.

In general, California employees are to receive overtime pay whenever they are asked to work more than 8 hours a single workday or more than six days in a given workweek. The overtime rate is:

  • One and one-half times your regular rate of pay for any hours beyond eight but less than 12 worked in a single day.
  • One and one-half times your regular rate of pay for the first 8 hours on the seventh consecutive day in any 40-hour workweek.
  • Double your regular rate of pay for any hours worked beyond 12 in a given day.
  • Double your regular rate of pay for all hours worked in excess of eight on the seventh consecutive day of work in any 40-hour workweek.

If I’m paid a salary, what is my regular rate of pay?

In order to pay your appropriate overtime rate, your boss should calculate your salary as an hourly rate. However, certain types of earnings are also included in your regular rate of pay. For example, any non-discretionary bonuses and commissions you earn should be included in your salary before it is calculated as an hourly rate.

According to the California Industrial Commission, a salaried employee’s regular rate of pay is generally determined as follows:

  • Multiply your monthly salary and other remuneration by 12 to get your annual salary
  • Divide this annual salary by 52 to get a weekly salary
  • Divide the weekly salary by 40 hours (the legal maximum) to get your regular hourly rate

This calculation could be different if you are paid at more than one rate, such as if you receive salary and commissions, or if part of your job is paid as piece work.

If you’re unsure whether you’re exempt, check with a lawyer

There are some types of employees in California who are legitimately nonexempt, meaning they are not covered by California’s wage and hour laws and orders. However, many more employees are exempt than nonexempt, and it isn’t always clear.

Talk to an employment law attorney if you suspect you should be receiving the overtime premium. Leigh Law Group represents employees in wage claims.

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