California Employees Might Be Underpaid for Overtime Hours

San Diego, CAEmployees who earn bonuses or commissions for their work may be victims of overtime rate violations. That is because non-discretionary bonuses, shift differentials and commissions must be included in the calculation for California overtime pay. Failure to include such bonuses in overtime wages could be a California overtime rate violation.

Even employers with the best of intentions may not realize they should include non-discretionary bonuses, shift differentials and commissions when calculating overtime pay for employees. Other income extras that should be included in overtime pay include bonuses for attendance, longevity or performance. This means that in each pay period that overtime occurs, a new rate of pay should be calculated, because the bonuses could change from week to week.

And even though the amount of each paycheck could be small—as small as a few dollars—over the course of a year or two, those dollars add up. Furthermore, employers who fail to pay proper overtime wages could be hit with damages and statutory penalties, making it worthwhile for employees to investigate whether or not they have been properly compensated for the extra hours they work.

Under California overtime law, non-exempt workers in California must be paid for more than eight hours worked in a day. For regular overtime—with no bonuses included—the rate of overtime pay is one-and-one-half times the regular rate of pay. But employees who receive bonuses, commissions, SPIFFS or piece-rate pay must have that factored into the overtime calculation. So if an employee regularly makes $15 an hour, but received a shift differential for one shift, that must be calculated into any overtime worked during the same pay period.