In California, employers must comply with the federal and state laws governing overtime and minimum wage. Nonprofit organizations are not exempted from complying with these laws. This means that nonprofits must understand and comply with the relevant laws when determining overtime pay owed to their employees.
Overtime under the Fair Labor Standards Act
Under the federal Fair Labor Standards Act, covered employers, including nonprofits, must pay statutory, non-exempt employees at least $7.25 per hour and overtime compensation for any hours the employees work above 40 during a workweek. In states with laws that provide greater protection to employees, however, employers must instead follow those laws.
Overtime compensation in California
In California, employers are required to pay employees overtime for all hours worked beyond 40 during a workweek as well as for any hours worked beyond eight during a workday. The state minimum wage in California is also $14 per hour for employers with 26 or more employees and $13 per hour for those with fewer employees. Since California’s wage and hour laws are more expansive, nonprofits in the state must follow them. Employers are not required to pay overtime to exempt employees. However, an employee cannot be considered to be exempt unless he or she receives at least the required minimum salary and has a job with duties that meet the definition for an administrative, professional, executive, or computer professional.
Compliance with the federal and state wage and hour laws is critical for all employers, including nonprofits. Failing to comply with these laws can result in fines, penalties, and litigation. Just as employers should understand their responsibilities under these laws, employees should also understand their rights to ensure that they receive all of the compensation they deserve for the work they perform.