It’s been said that “as California goes, so goes the country.” This certainly seems true with culture, but California is relatively unique in one aspect: its overtime laws. While most states enforce overtime pay of 1.5 times regular pay for weekly hours over 40, California overtime has extra layers, like a Mission Burrito. These extra layers and their impact on almost 20 million California employees is what we will discuss today in our 7th installment of Avoid These 8 Major Pitfalls to Succeed in Your Business.
According to California’s Department of Industrial Relations website, the following overtime rules apply to non-exempt employees:
- One and one-half times the employee’s regular rate of pay for all hours worked in excess of eight hours up to and including 12 hours in any workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek; and
- Double the employee’s regular rate of pay for all hours worked in excess of 12 hours in any workday and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek.
That’s a lot of factors to manually track on paper. Did any of my employees work more than 40 hours last week? How about over 8 hours in a day? Did anyone go over 12 hours? Oh, and I almost forgot, did anyone work 7 days in a row? And did any of them go over 8 hours on the 7th day?
Do you have heartburn yet? You can’t afford to be wrong in any of your calculations or suffer an oversight. As we mentioned in our last post, #6 Business Pitfall to Avoid: Overtime Lawsuits, since January 2007, employers have paid out $3.6 billion to settle wage and labor disputes, with most lawsuits related to overtime. Websites exist for the sole purpose of soliciting employees to join class action overtime lawsuits in California. As a small business with remote, hourly employees, the burrito is stuffed against you.
You need a smart solution. Chronotek is a remote employee clock in, clock out time tracking system that can automatically apply the California overtime rules to our time card reporting. The same benefits we mentioned in our last post: tracking overtime exempt PTO items, easy semi-monthly pay period processing, splitting time cards across the midnight hour, and choosing the day and time your workweek starts are available along with correct California overtime reporting.
20 million California employees are 20 million opportunities for a lawsuit.
Protect your business and at the same time take the pain out of doing payroll. In our 8th and final post in this series we will talk about our QuickBooks Integration and several payroll company exports we have for your use (ADP, Paychex, Paycom, generic).
Stay tuned and stay in touch by following us on Facebook.