| Questions have been recently asked as to the
definition of California overtime. The following is a clarification of the rules we must
live with. Legislation
in-acted January 1, 2000 (AB 60) has redefined overtime. This bill requires all
employers to pay time and a half the employee’s normal rate for time worked over
eight hours per day and / or forty hours per week. You also have to double the
employee’s rate for time worked beyond twelve hours in a single day. Employers are
also required to pay time and a half for all hours worked on the seventh day of the work
week and double time over eight hours on the seventh day of the week.
Please take note that you cannot exempt any of your employees from
the above new law by paying them on salary, on commission, on the flag-rate system, or by
having the employee sign a “overtime waiver”. And no, you may not exempt your
employee by making them “independent contractors”.
Who’s Exempt From Overtime
A bona fide executive, administrator, professional, or outside salesperson is exempt
from the wage and hours provisions of federal law, which defines who can get overtime.
Executive. According to Labor Department regulations, an executive is one whose
primary duty is management, regularly directs two or more full time employees, has
authority to hire and fire, gives promotions, regularly exercises discretionary powers,
doesn't spend more than 20% of his time on non-executive functions, can disperse company
funds, and is paid a guaranteed salary of $255 a week. If his/her salary isn’t less
than $250, that person is an executive employee if he or she satisfies only the first two.
Administrator. Defined in terms of doing office work directly related to
management policies or general business, exercises discretion, regularly assists an owner
or executive, does work requiring special training or knowledge, and doesn't spend more
than 20% of his or her time on non-administrative work.
* Check with your labor law attorney for the interpretation of the law
as to how it affects your situation.
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