Overtime laws vary by states. For instance, overtime under
California law is calculated based on the “regular rate of
pay.” This includes all forms of
remuneration, such as non-discretionary bonuses, piece-rates,
commissions, etc. Conversely, with respect to meal and rest
periods, California law states that these must be paid at an
employee’s “regular rate of
compensation.” However, California law does
not define whether the regular rate of compensation means an
employee’s straight-time hourly rate or the regular rate of
pay. This definitional difference has sparked much litigation in
the trial courts. Employees argues that regular rate of
compensation is synonymous with regular rate of pay for overtime,
while employers have taken the position that it means the
straight-time hourly rate.
