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Remote work and work-from-home privileges were on the rise leading up to the COVID-19 pandemic, but was accelerated due to the pandemic. When businesses were forced to close their offices and worksites, those that could adjust quickly shifted as much of their operations as possible to a remote model.
For many companies, and even more employees, the result is a dramatically new normal compared to where things were before March 2020. Many more employees are working from home or on a semi-remote basis, which means some may have moved hours away from where the office was. They may also be working schedules that are different than before, but despite any of these changes, California’s overtime laws still apply.
Earning Overtime While Working from Home
Working from home shouldn’t be viewed any differently than working from the office, as far as compensation is concerned. When employees are on the clock, they should expect to be paid their normal hourly wages and earn overtime pay, when appropriate.
Employers, however, may take advantage of employees who are working from home offices. They may assume the employee is available on-demand now that they live where they work, and ask for more work than they would at the office. While expecting more from employees isn’t illegal, failing to properly compensate them when they start accruing overtime hours is.
Here are a few examples of how an employee’s time can be taken advantage of while working from home:
- The employer expects the employee to take work calls at all hours, but only pays the employee for their normal work schedule.
- Employees are required to respond to work emails regardless of whether or not they’re on the clock.
- An employer contacts an employee to handle an emergency after the employee clocked out, but doesn’t pay them for the time they spent dealing with the emergency.
How Is Overtime Pay Calculated in California?
When someone is a non-exempt employee in California, they are entitled to earn overtime. Overtime pay is calculated at a rate of 1.5 times (time-and-a-half) that of the employee’s usual rate. Employees begin earning overtime when they work more than eight hours per workday and for the first eight hours of work on a seventh consecutive day of work.
When an employee works more than 12 hours in a single workday or any hours in excess of eight on a seventh consecutive day in a workweek, the overtime pay rate for those hours changes to twice that of the employee’s usual pay rate.
Exemptions from Overtime
Not all employees in California are entitled to earn overtime pay. Those who are not are referred to as “exempt employees.” These employees are typically paid a salary instead of an hourly rate and may hold executive, administrative, and professional roles in their companies. There are many other types of employees who are exempt from overtime that the California Department of Industrial Relations outlines on its website.
Minimum Salary Requirement
When an employee is paid a salary, they are not automatically exempted from overtime. That salary must meet or exceed a specific threshold. That threshold is at least double the state’s minimum wage or greater, but only when the employer has 26 or more employees.
As of Jan. 1, 2021, the minimum wage in California is $14 per hour. This means a salaried employee must be making at least $58,240 per year.
The math for California’s minimum salary requirement works out as follows:
- $14 minimum wage x 2 = $28/hour
- $28/hour x 40 hours per week = $1,120 per week
- $1,120 per week x 52 weeks per year = $58,240 minimum salary requirement for 2021
Independent Contractors
Another type of worker who is exempt from overtime pay is the independent contractor. This is someone who is considered to be in business for themselves and provides services to an employer that are outside of the employer’s usual course of business. Because independent contractors are not considered employees, they are not eligible to earn overtime pay.
Employee Misclassification
Sometimes a worker is misclassified as an independent contractor or an exempt employee to avoid paying them overtime. This is illegal, and people who believe they have been misclassified can pursue fair and just compensation, such as back pay for unpaid overtime, with legal action.
Is Your Employer Paying You Correctly?
If you have been working remotely and believe your employer has broken overtime laws to avoid paying you what you deserve, reach out to Haeggquist & Eck, LLP. We can represent employees who have been working from home and were forced to work more hours than they got paid for or were eligible for overtime and didn’t receive it.
If you have concerns about what could be missing from your paycheck, contact us online or call (619) 342-8000 to schedule a free initial evaluation.
