Wage Law

Where an employer offers employees premium pay for work on holidays, the employees are not entitled to additional premium pay for those hours if the hours also put the employee into statutory overtime. Advanced-Tech Security Services, Inc. v. Superior Court (2008) __ Cal.App.4th __. In other words, if your boss pays you time-and-a-half for working on Memorial Day, any overtime hours you work that day give you the same time-and-a-half rate that you would have had if you were not working overtime, and they count as "overtime hours" when calculating your right to weekly overtime pay. If you make $10 an hour on normal days, and $15 an hour on holidays, your regular rate of pay for calculating overtime on holidays does not become $15 an hours, entitling you to $22.50 per hour or $30 per hour (double time) if those hours exceed the limits for daily or weekly overtime for that week.

In this case, Advanced-Tech had filed a motion for summary adjudication on the overtime claims on the ground that the plaintiff could not prove that she was not paid one-and-a-half times her regular rate of pay for the days she worked in excess of 8 hours per day and/or in excess of 40 hours in one week. The moving papers argued that she was paid time-and-a-half for her holiday work, and the holiday/premium pay was properly credited against overtime pay to the extent she worked in excess of a 40-hour workweek.

The opposition argued that she was entitled to premium pay for holidays, and if she worked in excess of 40 hours in the same week, she was also entitled to additional overtime payments because the pay provision for holidays set forth in her employee’s handbook was part of her regular rate of pay, citing Santa Monica Police Officers Assn. v. Board of Administration (1977) 69 Cal.App.3d 96, 100, footnote 3.

Advanced-Tech argued in the reply that in the applicable weeks, she worked 60 hours; she was paid at her regular rate for 40 hours; she received 12 hours of holiday pay; and she received 8 hours of overtime pay. Therefore, she was paid properly under section 510, with the premium holiday pay credited against overtime.

The trial court denied Advanced-Tech’s motion for summary adjudication and Advanced-Tech filed a petition for writ of mandate. The Court of Appeal issued a writ directing the trial court to grant the motion.

Labor Code section 510, subdivision (a) mandates that an employer pay an employee time and one-half for (1) more than 8 hours of work in one workday, and (2) more than 40 hours of work in any workweek. In this case, the employer agreed to pay the employee a premium rate of one and one-half times her regular rate of pay for work on designated holidays. The issue presented here is whether the employee is entitled to time and one-half of the premium holiday pay as overtime if the employee works more than 8 hours in a day or 40 hours in a week. We hold that the plain language of section 510 does not require an employer to compensate an employee at a rate higher than one and one-half times the regular rate of pay under the circumstances presented here. The employer is entitled to credit the time and one-half premium pay on holidays against otherwise earned overtime. Accordingly, we issue a writ of mandate and direct respondent court to vacate its order denying the employer’s motion for summary adjudication as to real party in interest’s first cause of action for failure to pay overtime compensation and enter a new and different order granting the summary adjudication motion.

Advanced-Tech contends it complied with section 510, subdivision (a), by paying Ms. Roman at a rate of one and one-half times her regular pay for all hours in excess of 8 hours per workday and 40 hours per workweek. In addition to the language of section 510, Advanced-Tech relies on related federal law—the Fair Labor Standards Act (the FLSA)—which excludes several types of remuneration from the regular rate of pay including “extra compensation . . . for work . . . on Saturdays, Sundays, holidays, or regular days of rest.” (29 U.S.C. § 207(e) (1-8), emphasis added.) We hold that Advanced-Tech’s interpretation of the pertinent law is correct and it was entitled to summary adjudication of the first cause of action.

You can download the full text of the opinion at the court's website in pdf or word format.