California law technically gives employers two options when they require an employee to work more than forty hours a week. But in practice, it does not work out like that in most cases.
The theory is that employers can pay employees for the extra hours of overtime at one and a half times the employee’s usual hourly rate. Or they can tell them to take time off to compensate. That, too, must be given at one and a half times.
So, if an employee works 45 hours, the employer could give them either an extra 7.5 hours of pay or they could get 7.5 hours of compensatory time off.
Federal law, however, can make this illegal
An employer who only researches California law could find themselves in violation of federal law. Under the Fair Labor Standards Act (FLSA), employers are only allowed to compensate for overtime above 40 hours with money, not time.
In other words, compensatory time, even if the employee receives one and a half hours for every extra hour they worked, is illegal. The employer’s only option is to pay them 1.5 times their usual hourly rate. That is the rule most private employers must follow.
There are some exceptions
As with many employment laws, there are some exceptions to the general rules. Whether you are an employer looking to stay legal, or an employee looking to ensure you get properly compensated for your extra work, it is wise to seek help to learn more about this complex topic.