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California Restores Daily Overtime Requirements

August 10, 1999

Effective January 1, 2000, California has restored its daily overtime requirements to their pre-1998 status. Prior to 1998, California law required employers in most industries were required to pay employees at a rate of time and one-half for all hours worked in a day in excess of 8 (unlike Federal law, which requires that overtime be paid only for hours in excess of 40 in a week). On January 1, 1998, daily overtime requirements were eliminated for manufacturing, mechanical, technical and professional, hotels, restaurants and hospitals (public housekeeping), retail, wholesale and sales (mercantile) and transportation industries and occupations. That change required overtime to be paid after 40 hours in a week rather than after 8 hours in a day, consistent with Federal law. The new California law returns daily overtime requirements to their pre-1998 status, for those industries and occupations. Accordingly, beginning January 1st, California employers must pay workers 1 ½ times the regular rate for working more than 8 hours a day and double pay for working more than 12 hours a day. Under the new law, employers and workers may also agree to a 4 day work week, without payment for daily overtime, if two-thirds of the employees vote to work up to 10 hours a day in a 40 hour work week. If the employer agrees, employees may also take personal time off and make it up later in the week without overtime, so long as they worked no more than 11 hours a day.