California Overtime Violations on Bonuses

Companies that do not properly pay their California employees for overtime hours may be in violation of California overtime laws. Specifically, employees who earn bonuses, commissions or shift differentials may not be paid adequately for their overtime work and could be eligible to file an overtime rate violations lawsuit. California labor law requires companies to factor in applicable wage augments when calculating overtime pay.


Under the Fair Labor Standards Act (FLSA), overtime pay includes time worked over 40 hours in one week. Once an employee has worked more than 40 hours in a week, overtime pay—pay at a rate of one-and-a-half times the regular rate of pay—begins.

The regular rate of pay upon which overtime pay is calculated includes hourly wages, salaries and wage augments, such as shift differentials, longevity pay or bonuses. This means employees who receive wage augments must be paid an overtime wage that factors in those wage augments.

According to the Fair Labor Standards Act, "any money received by an employee 'for work' is part of the employee's regular rate of pay." Wage augments must be factored into the regular rate when determining overtime pay.

The following wage augments must be factored into overtime pay rates:

• Shift differentials (i.e., paid at different rates) or shift premiums

• Non-discretionary bonuses (such as safety bonuses, production bonuses, attendance bonuses, guaranteed/promised bonuses, profit-sharing bonuses, longevity bonuses, or bonuses paid as a percentage of earnings)

• Commissions or SPIFFS (immediate bonus for sale)

• Piece-rate pay

In addition to unpaid overtime, these employees are often owed significant penalties as a result of their employers underpaying them for overtime work performed.

While the FLSA stipulates that overtime pay must be paid for hours worked more than 40 hours in a week, individual states may also have overtime laws requiring employers to pay overtime once an non-exempt employee works over 8 hours in a day. Check with your state labor department to find out your specific state's overtime laws.

California labor law, for example, mandates that California workers be paid overtime when more than 8 hours have been worked in a day.

So for California workers, overtime pay begins once an employee has worked over 8 hours in a day. The rate at which California overtime is paid must be based on the employee's hourly wages--but any wage augments such as shift premiums, shift differentials, non-discretionary bonuses, sales commissions, SPIFFS, 'good attendance' bonuses or piece-rate pay must be factored into hourly wages in order to calculate overtime pay.

For example, if a California employee ordinarily makes $12/hour, but has worked a special shift that pays a shift differential (such as a graveyard shift) putting his hourly rate at $15/hour, overtime hours worked during that pay period need to factor in that wage augment (i.e., shift differential) in calculating the worker's overtime pay.

If you suspect that your overtime pay rate does not factor in certain wage augments or pay differentials that you've earned, you may have been subject to a California overtime bonus violation.

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Last updated on Jul-10-12