When calculating overtime pay in California, you must use the employee’s “regular rate” of pay, not the normal hourly amount.
The regular rate is not simply an employee’s normal hourly amount. The regular rate is a term used to mean the employee’s actual rate of pay once all hourly earnings plus many other types of compensation are considered.
The regular rate must include nearly all forms of pay received by that employee.
Only hours worked at straight-time apply to the weekly 40-hour limit. This prevents the “pyramiding” of overtime, where an employee earns overtime on top of overtime already paid.
David Payab, Esq. from The Law Offices of Payab & Associates can be reached @ (818) 918-5522 or by visiting http://payablaw.com/
