Is Mandatory Overtime In California Legal?
There are strict overtime laws both on federal and state levels that were implemented for a number of reasons. First of all, overtime laws help reward employees for working more than their standard eight-hour days or 40-hour weeks. Secondly, they help prevent workers from being taken advantage of by their employers. Lastly, they help discourage employers from getting their employees to work too much overtime, encouraging them to hire more workers instead and reduce burnout of their staff. In addition to understanding the costs of overtime, you will also want to know whether mandatory overtime is legal in California as a business owner. The answer--for the most part--is yes. Although both federal and California state laws allow employers to require overtime from their employees, there is a human element you should consider as well.
Why The Need To Impose?
Forcing your employees to work overtime raises some questions. Although overtime laws in California help to ensure that workers are compensated for working overtime, employees may not take kindly to having no say in the matter. Before we discuss that, here are some of the reasons why you might need to require overtime from your employees:
Lack Of Effective Measurement
An efficient business is one that measures output. If you're not measuring output, then the only way that you can properly gauge the productivity of your employees and your business, in general, is by time and perceived effort. This means that the more time employees put into the work, the more effort it looks like they're putting into their jobs. This is not an effective way to measure productivity and it's one of the reasons why some companies will force their employees into working overtime in an ill-conceived effort to improve productivity.
Erroneously Valuing Time Over Output
One of the most common misconceptions about workflow, in general, is that the more hours an employee works, the more productive they'll be. If human labor were just a simple equation, then this would be true. If one employee works twice as long as usual, then they should be twice as productive. But this is not how it works. Time and output do not correlate directly like this. Productivity isn't linear-- there are human elements to consider, such as fatigue, burnout, unhappiness, and stress, to name a few. These affect not just the productivity of employees, but also the quality of their work. Unfortunately, a lot of businesses think this way and it's why they require overtime from their employees. This could be perceived as punishing employees who work hard during their normal hours while rewarding those who slow down their productivity to take advantage of getting overtime.
Poor Project Management
Poor project management can result in falling behind schedule or in being understaffed on certain days. If this occurs, you may have no other option than to require overtime from your workers. Usually, when poor project management results in the need for mandatory overtime, it means that it could have been avoided had things been planned out better. Not only will it cost the company in such a situation, but it can also make employees aggravated as a result. It's why ensuring good project management is so important.
Some companies don't have much of a choice if they are behind schedule or need to meet strict deadlines. While hiring new employees can help reduce the workload of existing staff and make it easier to meet looming deadlines and to avoid falling behind schedule, not every company has the budget available to take on new workers. The hiring process is time-consuming and expensive in itself, not to mention the costs involved with taking on just a single new employee. In some cases, it might make more financial sense to just have your existing employees work overtime than to hire new employees.
There are cases in which employers desperately need their employees to work overtime on short notice. There's not much that can be done in such situations, especially when there's a lot on the line. For example, a hospital might require its staff to stay longer as a result of staff shortages or emergencies. If a hospital doesn't implement mandatory overtime in such situations, the lives of their patients could be put at risk.
Federal Laws On Mandatory Overtime
Although the Fair Labor Standards Act (FLSA) does require that employees be paid time and a half for any hours worked past the standard 40-hour work week, mandatory overtime is not prohibited. In fact, there's no limitation on how many hours an employer can force their employees to work as long as the employees are paid for overtime (which is time and a half).
In fact, employers even have the right to penalize any of their employees who refuse to work overtime. This means that employers have the right to fire their employees if they refuse to work overtime according to federal law. There are a few exemptions--for example, employees must be paid overtime, mandatory overtime cannot violate the employee's contract, and there cannot be a safety or health risk as a result of working overtime hours (for example, an airline company can't force its pilots to fly 100 hours a week since this will undoubtedly put the safety of the pilot and anyone else on board at risk).
California State Laws
Mandatory overtime law differs a little in California from the federal law. In most cases, mandatory overtime is not prohibited under California law. However, overtime pay does differ. Under FLSA, employees are required to be paid time and a half for every hour they work over the standard 40-hour workweek.
Under California law, employees must also be paid time and a half for every hour that they work over the eight-hour workday as well as for the first eight hours worked on the seventh consecutive day of a standard workweek. Employees that work more than 12 hours in a day are entitled to double their normal pay rate for every hour they work over 12 hours that day. They are also entitled to double their normal pay rate if they work more than eight hours on the seventh consecutive day in a single workweek.
Depending on your industry, there may be some specific limits of overtime. To determine if there are any overtime limits, make sure you check the Industrial Welfare Commission Wage Orders.
Can It Be Legally Imposed?
Like federal law, California law does allow employers to penalize its employees if they refuse to do overtime work. An employer has the right to dictate the work schedule and the hours worked by their employees as long as the overtime wage laws are adhered to.
Can You Terminate Your Employee For Refusing?
Because employers are not prohibited from penalizing their employees if they refuse to work overtime, they do have the right to fire them. Firing an employee because they won't work overtime is not considered discrimination.
Scenarios Where Workers Are Allowed To Refuse
Although the employer does have the legal right in California to require overtime, there are a few situations in which employees have the right to refuse without consequence. First of all, it's important to check wage orders to identify any limits within your industry before requiring overtime. Keeping that in mind, the following are a few scenarios in which your employees are allowed to refuse to perform overtime work:
If there's anything in the employee's contract that could be violated by requiring them to work overtime, then the employee can refuse (for example, if it's in their contract that they will only work a certain number of hours a week, then requiring overtime would be a violation of that contract).
The employee can refuse to do overtime if they believe that doing so will create a safety or health hazard. For example, if they are operating heavy machinery, then too much overtime could be seen as a potential safety risk.
If you are not compensating the employee properly for overtime work, they have a right to refuse since you are not abiding by California or federal law.
If the employee has already worked overtime the previous week and has worked 72 hours or more over the course of that week, then they can refuse to work overtime for the current week.
If the employee has already worked six days in a row in the current work week, then they can refuse to work overtime on the seventh consecutive day of that same workweek.
There are times where mandatory overtime is something that you have to enforce for the good of your company. While, for the most part, you have the legal standing in California to require overtime from your employees, it can have some negative effects--especially if you're constantly requiring overtime and it's not something that you do just on rare occasions (which is something most employees will be more understanding about). Some potentially negative consequences of mandatory overtime include:
Forcing employees to constantly work overtime can quickly damage their morale. Poor morale is bad for business since unhappy employees are going to be unmotivated and unfocused. Some business owners might not understand why morale would suffer since overtime results in better pay. The thing is, your employees do have a life outside of work that they spend with friends and family. The more they work, the less time they have for their personal relationships, which may l affect their ability to do quality work.
Productivity Is Not Linear
Productivity isn't linear, meaning that requiring employees to work twice as long isn't going to result in twice as much work getting done. In fact, their productivity may end up dropping off, especially if they are doing a lot of overtime work. The longer a person works, the more tired they will become and the less focused they'll be. They may begin getting more stressed due to the lack of rest as well. This can hurt their productivity and the quality of their work, especially during their overtime hours. You risk paying time-and-half or double time for less productivity and lower quality.
Increased Employee Turnover Rates
While some employees might be happy to make the extra money, especially if they're in some financial need, others may not be that strapped for cash. Forcing them to constantly work overtime eats into their personal time. This can be very problematic for workers who have families. They will likely take any new employment opportunity that comes to them if it means it will improve their overall lives.If you're constantly requiring overtime, you can expect your employee turnover rate to increase as a direct result.
Employees Pursue Legal Avenues Or Strike (If Unionized)
If employees begin to feel like they are being taken advantage of, there's a very good chance that they may begin pursuing legal recourse. Constant overtime can affect the quality of the work environment. Even if you have the law on your side, judges tend to favor workers if it's obvious that they're being taken advantage of. For example, workers can claim that the consistent mandatory overtime is causing stress that's causing safety or health issues (such as poor physical and/or mental health or the inability to focus on the road when driving to work due to lack of sleep).
If your employees are unionized, then they may band together and strike against your company as well, which would be a disaster on multiple fronts. Not only would it severely hinder your company's ability to meet customer demands, but it would likely tarnish the reputation of your brand. A strike would prevent you from being able to fire a single individual for refusing to work overtime since your entire workforce is striking and you can't fire everyone.
How To Avoid Future Conflicts
Besides taking measures to avoid needing to require overtime in the first place, be as transparent as possible about mandatory overtime. One of the things that can really hurt employee morale is when they're not aware that they can be forced to work overtime even if they don't want to. The last thing you'll want to do is threaten to punish them if they don't comply. Be as transparent as possible about mandatory overtime so that your employees know what to expect.
Create A Clear Written Company Policy
To be as transparent as you can be, have a section on overtime in your company policy. This should include how much employees will make based on the amount of overtime they work according to California law. Make sure that you outline what their rights are as well so that they are aware of what the exemptions are. By including the rules and regulations regarding overtime pay and mandatory overtime into your employee contracts, they will not only understand what they are, but they will also agree to the terms upon entry into your company. This transparency can prevent your workers from becoming unsettled as a result of mandatory overtime and can also help give you an extra layer of legal protection should you be forced to penalize employees for refusing to work overtime.
Potential Fixes To Minimize Or Even Eliminate Overtime
While a clear company policy on mandatory overtime will certainly help prevent employee unrest should you ever need to require mandatory overtime, you should still take steps to avoid the possibility of having to require overtime. Not only do you not want to force your employees to work more than they have to (especially if they don't want to), but it forces you to pay time and a half or even double time in some cases, which can be costly for your company. Here are a few measures you can take to help minimize the need for mandatory overtime or even to eliminate the need altogether.
Measure Your Company’s Output
There are many ways to measure output. For example, the time it takes to complete a project, the number of sales your team averages in an hour, how much work an individual team member manages to complete within an hour, etc. Of course, because productivity isn't linear, determine how to measure productivity over the course of a regular workday. You might find that some employees are incredibly productive at the beginning of the day and then tail off towards the end. Such employees will probably not be very productive if you force them to work overtime.
There are many ways to determine productivity levels, such as through the use of time tracking software. By measuring your company's output, you can also discover more effective strategies for improving productivity instead of just requiring overtime. For example, employees who are most productive in the first half of their day may be able to improve productivity by having shorter shifts but more of them. Another example is that instead of four ten-hour shifts, scheduling them for five seven-hour shifts and a five-hour shift on the sixth day. Different people are productive in different ways, so measure this to determine what is the most effective scheduling for them.
Reward The Behavior You’d Like To Encourage
You want to reward productivity, not time worked. One person may work longer than another, but that doesn't mean they work harder. For example, if someone on salary gets all their work done early on the last day of their workweek, you could let them leave early for the day. Or maybe if everyone is particularly productive one week, you take your staff out to lunch or to a sports game during a workday (letting them know that you're rewarding their productivity when you do this). When employees see that you're willing to reward productivity, they're likely to work harder, helping prevent the need for overtime. Even if at some point you have to require overtime to meet a deadline, your employees will be more understanding and more willing to put the work in because you've demonstrated that you appreciate the work they do.
Plan Projects Effectively
Plan your projects carefully before you begin executing them. Have a project manager in charge of your team and use project management software that can help make it easy for everyone to track who is assigned which tasks, what tasks have been completed, and whether everyone is on schedule. When you manage a project carefully (not just from the beginning, but through to the end), you're less likely to fall behind schedule, which means you're less likely to have to require overtime from your employees.
Communicate With Your Staff Members
Don't wait until the last second to force an employee to work overtime. Communicate with your employees and let them know that you need someone to put in extra hours ahead of time. This makes it easier for employees to plan accordingly. By announcing the need for extra work to be done ahead of time, you give employees the chance to volunteer for overtime instead of forcing it on someone. For example, post extra shifts for the upcoming week that are up for grabs. This way, you don't have to demand one of your employees to work overtime if someone else wants the extra shifts
If no one volunteers, then you can require a specific employee to do the work unless they can find a replacement. Asking for volunteers will help to keep morale up, as will letting employees know that you need them to put in overtime hours ahead of time so that they don't find out at the last second.
Hire Temporary Or Part-time Employees On A Per Project Basis
If you plan your project properly, you should be able to identify whether extra work is needed based on the project's timeline. If you see that the project will require extra work, consider hiring a part-time employee or a temporary contractor to help with the project. This will ensure that you don't have to demand overtime from your employees to get the work done and help you to avoid hiring more full-time employees.
Understanding overtime laws in California is extremely important. However, it doesn't just stop and start with the law. While mandatory overtime is legal, it's important that you're careful with how you implement it. Forcing overtime onto your workers isn't always the best solution to the challenges your business is likely to face, especially since forced overtime can hamper morale and hurt productivity. When requiring overtime, think strategically. Communicate with your employees and reward them for the work they're doing. Even though you're paying them for their overtime work, they can still develop resentment if you abuse your ability to demand overtime.