©2024 Seyfarth Shaw LLP www.seyfarth.com 2024 Cal-Peculiarities | 211 hours of overtime times $8 per hour, or $80, because for the ten overtime hours the employee has already been paid the regular rate of $16, and would be entitled to only an additional $8 per hour (0.5 times the regular rate). In California the regular rate would be higher. For the same nonexempt salaried employee, working the same hours, the regular rate would be $800 divided by only 40 hours (not the 50 hours actually worked).121 The regular rate would thus be $20, making the premium rate $30. In addition, because the fixed workweek method presumes that a salary covers only the first 40 hours of work, the employee would be entitled to extra pay in the amount of ten hours multiplied by the entire premium rate of $30, not just the extra $10 per hour. The federal and California methods thus diverge at two junctures: (1) how to calculate the regular rate of pay, and (2) what multiplier to apply to the amount due. As to the regular rate, the federal fluctuating-workweek method divides weekly salary by all hours worked in a week, while the California fixed-workweek method divides weekly salary by only 40 hours. As to the multiplier, the fluctuating workweek multiplies the regular rate by 0.5, while the fixed-workweek multiplies the regular rate by 1.5. Thus, the employee who has $80 of weekly premium pay elsewhere in America would have $300 in California: Weekly Salary Weekly Hours Regular Rate Multiplier OT Hours OT Pay Fluctuating Workweek $800.00 50 $16.00 0.5 10 $80.00 Fixed Workweek $800.00 50 $20.00 1.5 10 $300.00 7.5 Wage Payment Rules Full and prompt payment of wages due “is a fundamental public policy” of California.122 Various Labor Code provisions require immediate (or otherwise prescribed) payment of wages upon an employee’s discharge, layoff, or resignation,123 require regular payment of wages,124 and prohibit an employer from insisting that an employee release wage claims before paying the employee all wages that are undisputably due.125 California courts hold that these and similar statutes, considered “remedial in nature,” must be liberally construed, “with an eye to promoting the worker protections they were intended to provide.”126 7.5.1 Payment during employment The Labor Code aims to “ensure that employees receive their full wages at specified intervals while employed, as well as when they are fired or quit,”127 and this protection applies not only to hourly employees but even to highly paid executives and salespeople.128 Labor Code sections 204, 204b, and 205 set forth detailed requirements for establishing regular paydays. Section 207 requires that employers post notices identifying when and where wages are paid. Nonexempt employees must be paid at least semimonthly and must be paid no later than seven days after the close of the pay period.129 A failure to pay wages due in a pay period can result in penalties of $100 or $200 per employee per pay period plus 25% of the unpaid wages.130 Court of Appeal decisions have held that this worker-protection legislation entitles all employees—even highly paid executives making very large salaries under a written employment agreement—to sue for wages under the Labor Code and to recover attorney fees for a successful wage claim.131
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