Employers are required to pay all nonexempt employees in compliance with state, federal and local wage and hour laws. As we head toward the mid-summer months, here are a few key reminders for compliance with state and federal laws governing the payment of wages and overtime pay:
California and Arizona state minimum wage rates differ but are higher than the federal minimum wage. Employers must keep in mind that local minimum wage rates may exceed state minimums. In all cases, employers are required to pay the higher of any applicable federal, state, or local minimum wage. Non-exempt employees must be at least a minimum wage for all hours worked including all hours designated as overtime.
Overtime or premium pay is required under federal, state, and local wage and hours laws for all hours worked over a specifically mandated number of workweeks or workdays. Employers should become familiar with their state and local minimum wage rates, effective dates, and projected increase dates.
As with minimum wage laws, employers must comply with the state or federal overtime laws that are most protective of the employee. Arizona follows federal law under the Fair Labor Standards Act (FLSA) regarding overtime and must pay nonexempt employees at least 1.5 times their regular rate of pay for all hours worked over 40 in a workweek.[i] California law is typically more favorable than federal law and (with limited exception) requires an employer to pay overtime to all nonexempt employees (including nonexempt employees being paid a fixed salary) who work over eight hours per day and over 40 hours workweek as follows:
- 1.5 times the regular rate of pay for all hours worked over eight hours in a day, up to and including
- 12 hours in any workday and the first eight hours worked on the seventh consecutive day of work in a workweek.
- Double the regular rate of pay for hours worked over 12 hours in any workday and eight hours on the seventh consecutive day of work in a workweek.
[i] Arizona employers using a fluctuating workweek method of calculating overtime for salaried nonexempt employees should consult counsel to confirm they are using the appropriate overtime calculation method.
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