Exclusively Employment Law

Mutual Wage Agreements and Overtime

by | Aug 31, 2018 | Wage and Hour

Generally speaking, California law requires employers to pay overtime compensation to non-exempt employees. Consistent with this, California law prohibits employers from entering into mutual wage agreements with non-exempt employees pursuant to which the non-exempt employee would receive a fixed salary for working a fixed number of regular and overtime hours.

California law expressly provides that if such a mutual wage agreement exists, the fixed salary will be deemed to provide compensation only for the non-exempt employee’s regular, non-overtime hours regardless of what the agreement itself states.

Notably, prior to 2013, mutual wage agreements that covered both regular and overtime hours were permitted in California. Starting in 2013, however, such mutual wage agreements are expressly prohibited in California.

If you are an employee or employer who has questions about mutual wage agreements or overtime compensation under California law, call 916-612-0326 or email ([email protected]) Finley Employment Law today. We serve clients throughout California, including Sacramento, Folsom, Roseville, Granite Bay, and Elk Grove.

The information in this blog post is for general informational and advertising purposes only and is not, nor is it intended to be, legal advice. Instead, you should speak with a California employment attorney for advice regarding your individual situation.