How to Calculate Back Pay Under California Law

Following an investigation by the California Division of Labor Standards Enforcement (DLSE), employees may receive a notice informing them that they are due back pay. The department calculates the exact amount of back pay due to workers, but if you know the number of hours your employer did not pay you for, and whether they were regular hours or overtime, you can estimate the amount you will receive. California overtime law requires employers to pay time and a half for any hours over eight in a workday. Employers must pay double time for any hours over 12 in a workday or any hours over eight if the employee works seven days without a day off.

Multiply your regular hours times your regular pay rate. For example, if you estimate that you have 175 regular hours unpaid and your regular wage is $12 per hour, multiply 175 times $12. You have $2,100 back pay due for your regular wages.

Multiply your regular pay rate times 1.5 to calculate your normal overtime pay rate. For example, if your regular pay rate is $12, your normal overtime pay rate is $18 per hour.

Multiply your normal overtime rate times any hours over eight, but less than 12 in a workday. For example, if you have 82 normal overtime hours, you will receive $1,476 in back pay for your normal overtime hours.

Multiply your regular pay rate times two to calculate your double overtime pay rate. For example, if your regular pay rate is $12, your double overtime pay rate is $24 per hour.

Multiply your double overtime pay rate times any hours over 12 in a workday and any hours over eight on your seventh day of work without a day off. For example, if you have 40 hours of double overtime, you will receive $960 in back pay for your double overtime hours.

Add all of the amounts together to calculate the amount of back pay that is due. Using the above examples, you could expect $4,536 in back pay.

Tips

  • The statute of limitations on unpaid wages in California is four years.

    California law requires employers pay interest on unpaid wages. The department will calculate the interest for each pay period that your employer does not pay you. California law limits the interest rate to 10 percent per year.

    If you have unauthorized overtime, by California law, your employer must pay for these hours. Court rulings in California show that the state feels that the employer should know when an employee is working overtime and should stop the employee before overtime starts.

    If you work at different pay rates within the week, California will calculate the hours for that week using a weighted average. For example, if you work 20 hours at a job that pays $10 per hour, and work 10 hours in the same week at a job that pays $15 per hour for the same employer, the department will calculate your back pay for all 30 hours at $11.67 per hour.

Warnings

  • Employers who discriminate against employees who file a claim with the DLSE can face further charges from the labor commissioner and civil lawsuits from employees.