California Overtime Law Explained for Employers (For 2026)

California has some of the strictest overtime laws in the U.S. For employers, their obligations go well beyond what the federal Fair Labor Standards Act (FLSA) requires. Specifically, California’s state laws add extra daily, weekly, and seventh-day overtime requirements. Not adhering to California’s overtime laws can lead to serious consequences, including back wages, penalties, and class or representative actions. As we approach 2026, it is vital for you as an employer to fully understand how overtime works in California, who qualifies for it, and how to remain compliant.

Who Is Eligible for Overtime in California?

Most employees in California are considered non-exempt and thus entitled to overtime pay. Unless a legitimate exemption exists, an employee is considered non-exempt, regardless of whether they are paid hourly, on a salary basis, or through another method.

In California, only a few employees are considered exempt, including executives, high-level administrators, and certain professionals. To prove that an employee is exempt, an employer must show that they meet not only the job duties test, but also the salary test. Exempt employees must typically earn at least twice the state minimum wage for full-time employment.

California Daily and Weekly Overtime Rules

California’s overtime laws are stricter than federal laws. Whereas federal law only requires overtime to be calculated on a weekly basis, California law requires employers to calculate overtime on both a daily and weekly basis. The law requires you to pay the higher premium from either calculation to the employee.

Calculating Daily Overtime

Here is how employers are required to calculate daily overtime in California:

• 1.5x the regular pay rate for hours worked over eight and up to 12 in a single workday
• 2x the regular pay rate (double time) for hours worked over 12 in a single workday

This applies even if the employee doesn’t work over 40 hours in the workweek.

Calculating Weekly Overtime

• 1.5x the regular pay rate for hours worked over 40 in a workweek

Seventh Consecutive Day Rule

In California, if an employee works seven consecutive days in one workweek, they must receive overtime pay.

• The first 8 hours on the seventh day must be paid at 1.5x
• Any hours over eight on the seventh day must be paid at 2x

Understanding Regular Rate of Pay

An employee’s regular rate of pay includes more than their hourly wage. California employers must also consider:

• Bonuses
• Commissions
• Piece rates

Improperly calculating the regular rate of pay can lead to wage-and-hour violations.

Alternative Workweek Schedule

California allows employers to implement an alternative workweek schedule. This is a written agreement between you and your employees that the employees may work more than eight hours a day without daily overtime pay. However, these agreements are only legal if strict requirements are met, including being approved by at least two-thirds of affected employees in a work unit by secret ballot.

Even with an alternative workweek schedule, you still owe overtime:

• if an employee works more than the number of hours authorized by the schedule, or
• if they work more than 40 hours in a single workweek

Note: It is against the law to retaliate against employees for their opinions concerning having an alternative workweek schedule.

Contact SAC Attorneys

California overtime laws are complex and highly enforced. A simple mistake can land you in a lot of trouble. Complying with the law in 2026 is not advisable, but essential for protecting your business. For help ensuring compliance, contact our skilled business law attorneys at SAC Attorneys LLP today.