Staying compliant with labor law is an ongoing process, especially for payroll professionals. Often, we are unaware of certain laws that could have a significant financial impact to our organizations if we fail to stay in compliance. Overtime is one of these key areas. Let’s check on the situation in California…

  • Are you a California employer?
  • If so, are you compliant with the State of California, Department of Industrial Relations, Division of Labor Standards Enforcement rules related to overtime?
  • Are you sure? What about your employees that work all 7 days of your FLSA pay week? Are you aware that day 7 must be paid at overtime rates, irrespective of hours worked in the FLSA week? Thus, an employee may work less than 40 hours, but still be eligible for overtime pay.
  • And what is the cost of non-compliance?

Although California Labor Code section 204 does not expressly provide for civil penalties, penalties can be obtained under California’s Private Attorneys General Act which provides for a penalty of $100 per employee per pay period for the initial violation, and $200 per employee for subsequent pay periods, plus reasonable attorney’s fees and costs.

Based on the penalty calculation, if you have just 10 employees that receive pay weekly and are entitled to unpaid overtime, the annual penalty would be over $100,000.00.

Overtime Hours Rules handles many overtime regulations automatically in GP Payroll, including 7th day overtime. This eliminates the necessity for payroll clerks to painstakingly validate that overtime hours are paid according to federal and state statutes and ultimately puts your business in the “safe zone” as it pertains to overtime compliance.  Combine Overtime Hours Rules with Payroll Extensions Overtime Rate Manager functionality (which is included with your US Payroll licensing) and you have all the tools you need to ensure overtime rates and hours are paid correctly. This frees you up to focus on other, more important areas of your business.

Reference Information

State of California, Department of Industrial Relations, Division of Labor Standards Enforcement FAQ on Overtime Pay

US Department of Labor, Wage and Hour Division Information on Overtime Pay

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