This is an ongoing series looking at the nine California Labor Rules to Ignore at Your Own Peril. Today we’ll discuss Daily Overtime.
The Commonwealth of California is a very employee-friendly state, and none of the regulations make this more clear than the rules for daily overtime. Any hours beyond eight worked in a single day must be paid at time-and-a-half; in addition, any hours over forty worked in the pay week are also paid as overtime. This is a labor law which sometimes catches out-of-state employers unawares.
While most California business owners are mindful of the daily overtime rule in general, the concept of “makeup time” is not as widely understood. Particularly when the employer enjoys a good relationship with the staff, informal requests to work more on one day in order to leave earlier on another abound. Makeup time is allowed under the law, but how it’s implemented is very structured.
Employers who wish to allow makeup time must have a formal, written agreement with each employee. That agreement must stipulate that the hours must be made up in the same work week, even if the pay period is longer than a week. If the company’s stated work week begins on Monday, then the employee must make up the time by the following Sunday in order for it to be in compliance with the law.
Many companies simply don’t allow makeup time because of the complexity, while others do so informally, relying on everyone involved to remember the understanding. Not permitting it at all is legal, but an automated system that generates the formal agreement and tracks the time will probably be more warmly received by the staff. Casual, oral agreements may promote an avuncular relationship, but they do not comply with the law whatsoever, and can expose the company to penalties.
The rules regarding daily overtime can be complex, which is why we recommend a system designed and managed by experts to ensure that they are all addressed and complied with.