📋 Overview: California Overtime Law

California overtime law is more protective than federal law. While the federal Fair Labor Standards Act (FLSA) only requires overtime after 40 hours per week, California requires overtime pay based on both daily and weekly hours worked. This means many California workers are owed overtime that they would not receive under federal law alone.

California Overtime Rules (LC 510)

Daily Overtime (1.5x)

Time-and-a-half for all hours worked over 8 hours in a workday

Daily Double Time (2x)

Double time for all hours worked over 12 hours in a workday

Weekly Overtime (1.5x)

Time-and-a-half for all hours worked over 40 hours in a workweek

7th Day Rules

1.5x for first 8 hours on 7th consecutive day; 2x for hours over 8 on 7th day

Understanding Overtime Rates

1.5x
Time and a Half

Hours 9-12 per day, or over 40/week

2x
Double Time

Hours over 12 per day, or over 8 on 7th day

California vs. Federal Law

Key differences that benefit California workers:

  • Daily overtime - Federal law has no daily overtime requirement; California does
  • Double time - Federal law never requires double time; California does after 12 hours
  • 7th day rules - Federal law has no 7th day premium; California does
  • Stricter exemptions - California exemption tests are harder to meet than federal tests

Common Overtime Violations

When Overtime Claims Arise

  • Misclassification as exempt - Employer wrongly classifies you as exempt from overtime
  • Off-the-clock work - Working before/after shift, through lunch, or from home without pay
  • Averaging hours - Employer averages hours across multiple weeks instead of paying daily OT
  • Comp time instead of OT pay - Private employers cannot substitute comp time for overtime pay
  • Flat salary for all hours - Paying salary that does not account for overtime hours
  • Incorrect regular rate - Excluding bonuses, commissions, or shift differentials from OT calculation
  • Rounding violations - Improper time rounding that systematically underpays

What You Can Recover

A successful overtime claim can include:

  • Unpaid overtime - All overtime wages owed at 1.5x or 2x rate
  • Liquidated damages - Equal amount as penalty for willful violations (LC 1194.2)
  • Interest - 10% per year on unpaid amounts
  • Waiting time penalties - Up to 30 days wages if OT unpaid at termination (LC 203)
  • Wage statement penalties - $50-$100 per violation up to $4,000 (LC 226)
  • Attorney fees - Recoverable if you prevail (LC 1194)

👤 Exempt vs. Non-Exempt Classification

One of the most common overtime violations is misclassification. Employers often incorrectly classify employees as "exempt" from overtime when they do not meet the strict legal requirements. If you have been misclassified, you may be owed years of unpaid overtime.

Requirements for Exempt Status in California

To be exempt from overtime, an employee must meet ALL of the following requirements:

1. Salary Basis Test

Must earn a monthly salary of at least 2x state minimum wage for full-time work. For 2024: $66,560/year minimum.

2. Duties Test

Must spend more than 50% of work time on exempt duties (administrative, executive, or professional work).

3. Discretion and Independent Judgment

Must customarily and regularly exercise discretion and independent judgment in performing exempt duties.

Common Exempt Categories

Exemption Key Requirements
Executive Manages enterprise or department; supervises 2+ employees; has hiring/firing authority or significant input
Administrative Office or non-manual work directly related to management policies; exercises discretion on significant matters
Professional Work requiring advanced knowledge in science/learning; prolonged specialized intellectual instruction
Computer Professional Highly skilled computer work; must earn $53.80/hour minimum (2024); systems analyst, programmer, software engineer
Outside Sales Regularly works away from employer's place of business; makes sales or obtains orders

Common Misclassification Situations

These Job Titles Are Often Wrongly Classified as Exempt

  • Assistant managers who primarily perform non-managerial work
  • Inside sales representatives who do not make sales outside the office
  • IT support staff who do not perform creative/analytical programming
  • Paralegals who perform routine tasks without professional discretion
  • Office administrators without authority over significant business matters
  • Loan officers and mortgage professionals following set procedures
  • Claims adjusters using standardized evaluation criteria

Job Title Does Not Determine Exempt Status

Employers cannot make you exempt simply by calling you a "manager" or paying you a salary. Actual job duties control. If you spend more than 50% of your time on non-exempt tasks (routine work, manual labor, following procedures), you are likely non-exempt regardless of your title or salary structure.

Misclassification = Big Recovery

If you were misclassified as exempt and worked overtime, you may be owed:

  • 3-4 years of unpaid overtime at 1.5x and 2x rates
  • Meal and rest break premiums (1 hour/day each)
  • Wage statement penalties
  • Waiting time penalties if you have separated
  • Interest and attorney fees

These claims can easily reach tens of thousands of dollars even for short employment periods.

📂 Evidence Checklist

Strong documentation is essential for an overtime claim. Gather the following evidence before sending your demand letter.

Time Records

Employer timesheets, clock-in/out records, badge swipes, time tracking app exports, or personal time log

Pay Stubs

All wage statements showing hours worked, regular rate, overtime hours (if any), and total pay

Employment Documents

Offer letter, employment agreement, job description showing agreed compensation and exempt/non-exempt status

Work Schedule Evidence

Work schedules, shift assignments, calendar entries, project timelines showing expected hours

Communications

Emails, texts showing work requests, early/late hours, weekend work, or acknowledgment of overtime

Duty Evidence (for misclassification)

Job postings, performance reviews, daily task lists showing actual duties performed

Digital Evidence

Email timestamps, login records, computer activity logs, GPS data showing work hours

Witness Information

Names of coworkers who witnessed overtime work or have similar claims

California Evidence Presumption

Under Labor Code Section 1174, employers must maintain accurate time records for at least 3 years. If your employer fails to produce records, California courts will presume your testimony about hours worked is accurate. This presumption is powerful leverage in your claim.

Creating Your Own Time Log

If you do not have employer time records, create your own reconstruction with:

  • Dates and days of the week worked
  • Start and end times for each day
  • Meal break times (start and end)
  • Total regular hours vs. overtime hours per day
  • Notes on what you were doing (especially for misclassification claims)
  • Any corroborating evidence (emails sent at certain times, witness observations)

💰 Calculating Your Overtime Damages

Overtime damages can add up quickly, especially when penalties are included. Here is how to calculate what you may be owed.

Step 1: Calculate Your Regular Rate

Your "regular rate" for overtime purposes includes not just your base hourly wage, but also:

  • Non-discretionary bonuses (production bonuses, attendance bonuses)
  • Commission payments
  • Shift differentials
  • Piece-rate earnings

Regular Rate Formula

Hourly employees: Base hourly rate + (weekly bonuses/commissions / hours worked)

Salaried non-exempt: Weekly salary / hours worked = regular rate for that week

Piece-rate workers: Total piece-rate earnings / hours worked = regular rate

Step 2: Calculate Overtime Owed

Overtime Type Rate Calculation
Daily OT (hours 9-12) 1.5x Regular rate x 0.5 x OT hours
Daily DT (hours 12+) 2x Regular rate x 1.0 x DT hours
Weekly OT (hours 40+) 1.5x Regular rate x 0.5 x OT hours*
7th Day (first 8 hrs) 1.5x Regular rate x 0.5 x hours
7th Day (hours 8+) 2x Regular rate x 1.0 x hours

*Weekly OT only applies to hours not already paid as daily OT

Step 3: Add Penalties and Damages

Category Amount Applies When
Meal Break Premium 1 hour pay per day No 30-min meal break provided
Rest Break Premium 1 hour pay per day No 10-min rest break provided
Waiting Time Penalties Up to 30 days pay OT unpaid at termination
Wage Statement Penalties $50-$100/violation (max $4,000) Inaccurate pay stubs
Interest 10% per year All unpaid amounts

Sample Overtime Calculation

Example: 1 Year of Unpaid Daily Overtime

Employee earning $25/hour regularly worked 10-hour days (50 hours/week) for 1 year. Employer paid straight time only.

Unpaid daily OT premium (2 hrs/day x 5 days x 52 wks x $12.50) $6,500.00
Unpaid weekly OT premium (already counted in daily) $0.00
Meal break violations (no breaks, ~260 days x $25) $6,500.00
Rest break violations (260 days x $25) $6,500.00
Interest (10% on $19,500 for avg 6 months) $975.00
Wage statement penalties (12 months x $100) $1,200.00
TOTAL (before waiting time penalties) $21,675.00

*If terminated, add up to 30 days waiting time penalties. Plus attorney fees if litigation required.

Multi-Year Claims Are Common

With a 3-4 year statute of limitations, overtime claims can cover years of unpaid wages. A 3-year claim at the example rates above could exceed $65,000 before attorney fees. This is why employers often prefer to settle overtime claims rather than litigate.

📝 Sample Demand Language

Use these paragraphs as building blocks for your overtime demand letter. Customize with your specific facts and calculations.

Opening - Unpaid Overtime Demand
I am writing to formally demand payment of all overtime wages owed to me for work performed during my employment with [COMPANY NAME]. Throughout my employment, I regularly worked in excess of 8 hours per day and/or 40 hours per week, but was not paid overtime compensation as required by California Labor Code Section 510. I am owed $[AMOUNT] in unpaid overtime, plus penalties and interest.
Employment Background and Hours Worked
I was employed by [COMPANY NAME] as a [JOB TITLE] from [START DATE] to [END DATE]. My regular hourly rate was $[RATE]. During my employment, I regularly worked approximately [X] hours per day, [X] days per week. Despite working well in excess of 8 hours per day and 40 hours per week, I was paid only my straight-time rate for all hours worked.
Misclassification Allegation
I was incorrectly classified as an exempt employee and paid a flat salary regardless of hours worked. However, I did not meet the requirements for exempt status under California law. Specifically, I spent more than 50% of my work time on non-exempt duties including [DESCRIBE NON-EXEMPT TASKS: e.g., "routine data entry, customer service calls, inventory management, and following standard procedures"]. I did not regularly exercise independent judgment or discretion on matters of significance. As a misclassified employee, I am entitled to overtime pay for all hours worked over 8/day and 40/week.
Legal Basis - LC 510
California Labor Code Section 510 requires employers to pay overtime compensation of one and one-half times the regular rate for hours worked in excess of 8 hours in a workday or 40 hours in a workweek, and double time for hours over 12 in a workday. Under Labor Code Section 1194, I am entitled to recover unpaid overtime wages plus interest and reasonable attorney's fees. Under Labor Code Section 1194.2, I may also recover liquidated damages for willful violations.
Meal and Rest Break Violations
In addition to unpaid overtime, [COMPANY NAME] failed to provide legally required meal and rest breaks. Under Labor Code Section 512, employees working more than 5 hours are entitled to a 30-minute uninterrupted meal break. Under Labor Code Section 226.7, employees are entitled to a 10-minute paid rest break for every 4 hours worked. I was regularly [denied meal breaks / required to work through meal breaks / not relieved of duties during rest breaks]. For each violation, I am entitled to one additional hour of pay at my regular rate.
Itemized Damages Summary
Based on my calculations, my damages are as follows:

Unpaid Overtime (1.5x and 2x premiums): $[AMOUNT]
Meal Break Violations ([X] days x $[HOURLY RATE]): $[AMOUNT]
Rest Break Violations ([X] days x $[HOURLY RATE]): $[AMOUNT]
Interest at 10% per annum: $[AMOUNT]
Wage Statement Penalties (LC 226): $[AMOUNT]
[If terminated: Waiting Time Penalties (LC 203): $[AMOUNT]]

TOTAL DEMAND: $[TOTAL]
Closing - Deadline and Consequences
I demand payment of $[TOTAL] within fourteen (14) days of the date of this letter. Payment should be made by [certified check / wire transfer / direct deposit].

If I do not receive payment by [DEADLINE DATE], I will pursue all available legal remedies including: (1) filing a wage claim with the California Labor Commissioner (DLSE); (2) filing a civil action in Superior Court; and (3) seeking recovery of the full amount owed plus liquidated damages, additional penalties, interest, and attorney's fees as provided by California Labor Code Sections 203, 226, 1194, and 1194.2.
Full Sample Demand Letter
[YOUR NAME]
[Your Address]
[City, CA ZIP]
[Your Email]
[Your Phone]

[DATE]

VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED
AND VIA EMAIL TO: [employer email]

[EMPLOYER/COMPANY NAME]
Attn: [Owner/HR Director/Payroll Manager]
[Company Address]
[City, CA ZIP]

Re: Demand for Unpaid Overtime - California Labor Code Section 510

Dear [EMPLOYER NAME]:

I am writing to formally demand payment of all overtime wages and related penalties owed to me under California law.

EMPLOYMENT BACKGROUND

I was employed by [COMPANY] as a [JOB TITLE] from [START DATE] to [END DATE]. My regular rate of pay was $[RATE] per hour. Throughout my employment, I regularly worked approximately [X] hours per day, [X] days per week, for a total of approximately [X] hours per week.

OVERTIME VIOLATIONS

Despite regularly working in excess of 8 hours per day and 40 hours per week, I was not paid overtime premiums as required by California Labor Code Section 510. I was paid only my straight-time rate of $[RATE] for all hours worked, regardless of overtime.

[IF MISCLASSIFIED: Additionally, I was incorrectly classified as an "exempt" employee. However, I did not meet the requirements for any overtime exemption because I spent more than 50% of my time on non-exempt duties and did not exercise the independent judgment required for exempt status.]

MEAL AND REST BREAK VIOLATIONS

I was also denied proper meal and rest breaks as required by Labor Code Sections 512 and 226.7. [Describe specific violations.]

DAMAGES CALCULATION

Based on [X] months/years of employment working approximately [X] overtime hours per week:

Unpaid overtime premiums: $[AMOUNT]
Meal break violations: $[AMOUNT]
Rest break violations: $[AMOUNT]
Interest (10% per annum): $[AMOUNT]
Wage statement penalties: $[AMOUNT]
[Waiting time penalties: $[AMOUNT] - if applicable]

TOTAL: $[AMOUNT]

DEMAND

I demand payment of the total amount within fourteen (14) days - by [DEADLINE DATE].

If payment is not received by this deadline, I will file a wage claim with the California Labor Commissioner and/or a civil lawsuit seeking the full amount owed plus liquidated damages and attorney's fees under Labor Code Section 1194.

Please contact me at [EMAIL/PHONE] to discuss resolution of this matter.

Sincerely,

_________________________
[YOUR NAME]

Enclosures:
- Time records / hour calculation
- Pay stubs
- Damages calculation worksheet

🚀 Next Steps

After sending your demand letter, here is what to expect and how to proceed.

Expected Timeline

Days 1-5

Employer receives demand, forwards to HR/legal/payroll for review

Days 5-10

Employer reviews records, may consult with employment attorney

Days 10-14

Response with payment, settlement offer, or dispute of calculations

Day 14+

If no resolution, proceed to DLSE claim or litigation

If They Pay or Offer Settlement

  • Verify the calculation covers all overtime, breaks, and penalties
  • Consider whether the offer is fair given your evidence strength
  • Get settlement in writing with a clear release of claims
  • Negotiate if the offer is too low - employers often start low

If They Refuse or Do Not Respond

You have several options for enforcing your claim:

1. DLSE Wage Claim

Free and no attorney needed. File online at dir.ca.gov/dlse. The Labor Commissioner investigates and holds a hearing. Timeline: 6-18 months. Good for straightforward claims.

2. Small Claims Court

Fast and inexpensive. Limit is $12,500 for individuals. No attorneys in court. Good for smaller overtime claims. File at your local courthouse.

3. Civil Lawsuit (Superior Court)

Best for larger claims. No dollar limit. Can recover attorney fees under LC 1194 - many attorneys take these cases on contingency. Best for misclassification claims, multi-year claims, or class actions.

Statute of Limitations Reminder

The clock is running. Each pay period that passes is one you may not be able to recover. With a 3-year statute of limitations, file your claim promptly to maximize your recovery period.

California Resources

  • Labor Commissioner (DLSE): dir.ca.gov/dlse - File overtime claims online
  • DLSE Hotline: 1-844-522-6734 - Information about your rights
  • IWC Wage Orders: dir.ca.gov/iwc - Industry-specific rules
  • California Courts: courts.ca.gov/selfhelp - Small claims information

📥 For Employers: Responding to Overtime Demands

If you have received an overtime demand letter, here is what you need to know to assess your exposure and respond appropriately.

Overtime Claims Are High-Risk

California overtime law strongly favors employees. The combination of daily overtime, mandatory penalties, and attorney fee-shifting means even moderate overtime claims can result in significant liability. Misclassification claims are especially dangerous because they can cover years of back pay. Take any overtime demand seriously.

Immediate Steps for Employers

  1. Preserve all records - Time records, pay stubs, schedules, job descriptions. Spoliation of evidence is very damaging.
  2. Reconstruct the employee's hours - Review timekeeping systems, badge records, email timestamps
  3. Verify exempt status - If you classified them as exempt, review actual job duties against legal requirements
  4. Calculate potential exposure - Estimate overtime owed plus all penalties
  5. Check for class action risk - Are other employees in similar situations?
  6. Consult employment counsel - Overtime claims require careful legal analysis

Common Employer Vulnerabilities

Weak Exemption Classifications

Many "exempt" employees do not actually meet all three requirements. Review carefully.

Poor Time Records

Without accurate records, the employee's estimate of hours is presumed correct. Major disadvantage.

Off-the-Clock Work

Pre-shift, post-shift, or work-from-home time that was not recorded or compensated.

Meal/Rest Break Policies

Even good overtime practices can be undermined by break violations adding 2 hours/day in penalties.

Response Options

Settle the Claim

If the claim has merit, settling quickly stops penalties from accruing and avoids attorney fee exposure.

Negotiate Amount

Even valid claims may be inflated. Negotiate based on your records and the strength of their evidence.

Dispute the Classification

If you have strong evidence of exempt status, document the employee's actual duties and decision-making authority.

Audit Your Practices

Use this claim as an opportunity to audit and fix systemic issues before they become class actions.

The Settlement Math

Consider: Employee claims $30,000 in unpaid overtime over 2 years. Your options:

  • Settle now for $25,000-35,000 with release
  • Litigate: $15,000-30,000 in defense costs, plus potential judgment of $30,000+, plus their attorney fees of $40,000-80,000 if you lose

Total litigation exposure: $85,000-140,000+ vs. $30,000 settlement. Early resolution usually makes financial sense.

Preventing Future Claims

  • Audit exempt classifications - Apply the 50% duties test honestly
  • Implement accurate timekeeping - Electronic systems with meal break attestations
  • Train managers - On overtime rules and break requirements
  • Review payroll practices - Ensure OT is calculated correctly including all compensation
  • Document job duties - For exempt employees, maintain records of actual work performed

⚖ Attorney Services

I assist both employees with overtime claims and employers responding to wage demands. Here is how I can help.

For Employees

  • Evaluate your overtime claim and calculate maximum damages
  • Analyze your exempt/non-exempt classification
  • Draft a professional demand letter with full legal citations
  • Negotiate settlement with your employer
  • Advise on DLSE vs. court litigation strategy
  • Represent you in wage claims or civil litigation

For Employers

  • Analyze the overtime demand and your exposure
  • Review exempt classifications for legal compliance
  • Evaluate your records and identify defenses
  • Draft responses to overtime demands
  • Negotiate settlements to minimize liability
  • Audit payroll practices to prevent future claims
  • Defend against DLSE claims and litigation

Need Legal Assistance?

Get a 30-minute strategy session to evaluate your overtime situation and discuss your options.

Book Consultation - $240/hr

Consultation Rate

$240 per hour for consultations, case evaluation, and hourly legal work.

Flat Fee Demand Letter

$450 flat fee for professional overtime demand letter with damages calculation.

Contact Information

Email: owner@terms.law
Book Online: calendly.com/sergei-tokmakov/30-minute-zoom-meeting