Your employee worked four 10-hour days this week and took Friday off. Total: 40 hours. Under federal law, you owe zero overtime. But if that employee works in California or Alaska, you owe eight hours of overtime premium — and if they are in California and one of those shifts stretched past 12 hours, some of it is owed at double time.
This is the trap that catches employers expanding into daily-overtime states for the first time. The federal Fair Labor Standards Act (FLSA) only cares about the 40-hour workweek. California, Alaska, and (conditionally) Nevada also care about the length of each individual workday. A payroll setup that is perfectly compliant in Texas can silently underpay workers from the first pay period in Los Angeles, Anchorage, or Reno — and the back-pay liability compounds with every paycheck.
This guide walks through the daily overtime rules in all three states, the seventh-day and double-time rules that exist only in California, and the compliance habits that keep a multi-state payroll clean.
The Federal Baseline: 40 Hours or Nothing
Under the FLSA, nonexempt employees earn overtime at one-and-one-half times their regular rate only for hours worked over 40 in a workweek. There is no federal daily overtime, no double time, and no weekend premium requirement. An employee who works four 12-hour days (48 hours) earns 8 overtime hours; an employee who works three 13-hour days (39 hours) earns none at all, despite three grueling shifts.
Most states follow this federal model. The three states below do not — and when state law is more generous to the employee than federal law, the state law controls.
California: Daily Overtime, Double Time, and the Seventh Day
California has the most employee-protective overtime scheme in the country, set out in Labor Code Section 510 and the Industrial Welfare Commission Wage Orders. Nonexempt employees 18 and older (and 16- and 17-year-olds not required to attend school) are covered.
The 8-hour and 12-hour daily rules
- Over 8 hours in a workday, up to and including 12: paid at 1.5 times the regular rate.
- Over 12 hours in a workday: paid at double the regular rate.
- Over 40 hours in a workweek: paid at 1.5 times the regular rate (for hours not already paid as daily overtime — hours are not double-counted).
Eight hours of labor constitutes a day's work in California. Note the asymmetry with federal law: a California employee who works five 9-hour days earns 5 overtime hours even though the 45-hour week would only produce 5 under federal law too — but one who works four 10-hour days earns 8 overtime hours in California versus zero under the FLSA.
The seventh consecutive day
California adds a weekly protection federal law lacks entirely:
- First 8 hours on the seventh consecutive day of work in a workweek: 1.5 times the regular rate.
- Hours over 8 on that seventh consecutive day: double time.
Two details matter enormously here. First, the day must be the seventh consecutive day of work — the employee must actually have worked all seven days in the employer's designated workweek. An employee whose only shift falls on Sunday, the seventh calendar day of your workweek, is not owed seventh-day premium. Second, an employer may not discipline an employee for refusing to work the seventh day, and it is unlawful to cause or induce an employee to forgo a day of rest — though a fully informed employee may independently choose to work.
Overtime is calculated on hours actually worked
Paid time off does not count. If an employee works 32 hours and takes 8 hours of paid sick leave or holiday pay in the same week, they have 40 compensable hours but only 32 hours worked — no weekly overtime is owed. Similarly, a 48-hour paycheck built from 40 worked hours plus 8 holiday hours carries no overtime premium. Many payroll errors run in the opposite direction (paying overtime on PTO-inflated totals), which overpays but does not create liability; the dangerous direction is forgetting that a holiday week can still produce daily overtime when shifts exceed 8 hours.
Unauthorized overtime must still be paid
California requires payment for all hours an employee is "suffered or permitted" to work — meaning work the employer knew or should have known about — whether or not the overtime was pre-approved. You may discipline an employee for violating a no-unauthorized-overtime policy, up to and including termination, but you must pay the premium. "I never approved those hours" is a defense to nothing.
Bonuses and the regular rate
The regular rate of pay includes hourly earnings, salary, piecework, commissions, and nondiscretionary bonuses — bonuses tied to hours worked, production, proficiency, or staying employed, including flat-sum bonuses. Discretionary gifts, such as a holiday bonus not measured by hours or output, are excluded, as are expense reimbursements and premium pay for weekend work that already meets the 1.5x threshold. Computing overtime on a flat-sum bonus requires spreading it over the legal maximum regular hours in the bonus period, not total hours worked — a calculation worth handing to your payroll provider rather than a spreadsheet.
Employees cannot waive overtime
Any agreement to work for less than the legally required overtime rate is unenforceable. An employee who signed such an agreement can still recover the difference. Build the premium into your labor budgets; you cannot contract around it.
Alternative workweek schedules are an option — with a vote
Employers that want regularly scheduled 10-hour days without daily overtime can adopt an alternative workweek schedule (such as four 10-hour days), but only through a formal process: a written proposal, a secret-ballot election in which at least two-thirds of the affected work unit approves, and registration with the state. Skipping the election and simply scheduling 4/10s leaves every hour past 8 per day payable at overtime rates. Even under an approved schedule, hours beyond the scheduled 10 per day revert to overtime, and hours over 12 still earn double time.
2026 numbers to know
California's statewide minimum wage rose to $16.90 per hour on January 1, 2026, which automatically lifted the minimum salary for exempt executive, administrative, and professional employees to $70,304 per year ($1,352 per week) — twice the minimum wage for full-time work. If any salaried employee sits below that line, they are nonexempt as a matter of law and every long day they work is accruing daily overtime. Separately, many cities and the fast-food and health-care industries carry higher minimums, but the exempt salary threshold keys off the state rate.
Alaska: Daily Overtime Without the Double Time
Alaska's Wage and Hour Act mirrors California's daily trigger in simpler form: nonexempt employees earn 1.5 times their regular rate for hours worked over 8 in a day or over 40 in a week. There is no double-time tier and no seventh-day rule.
Three Alaska-specific points deserve attention:
- No double counting. Hours that already triggered the daily premium are not counted again toward the 40-hour weekly threshold. The statute avoids pyramiding — you pay the premium once.
- Small-employer exemption. Employers with fewer than four employees are not subject to the state overtime law (federal FLSA obligations may still apply if coverage thresholds are met).
- No comp time in lieu of overtime. Private-sector employers cannot substitute paid time off for the overtime premium.
Alaska also carries broad industry exemptions — notably around agriculture, fishing, and seafood processing — so seasonal and maritime employers should confirm coverage rather than assume it.
Nevada: Daily Overtime Only for Lower-Paid Workers
Nevada takes a hybrid approach under NRS 608.018. Daily overtime exists, but only for employees earning less than 1.5 times the state minimum wage:
- Earning under 1.5x the minimum wage: overtime at 1.5x for hours over 8 in a 24-hour period or over 40 in a week.
- Earning at or above 1.5x the minimum wage: overtime only for hours over 40 in a week — the federal rule.
With Nevada's uniform $12.00 minimum wage, the dividing line sits at $18.00 per hour. An employee earning $17.50 who works a 10-hour day earns 2 overtime hours; a colleague earning $18.00 working the identical shift earns none. Raises that cross the $18 line change an employee's overtime profile, so payroll systems need a rate-aware rule, not a blanket one.
Nevada also recognizes an exception for employees who agree to a regular 4/10 schedule (four 10-hour days). Get that agreement in writing before scheduling the long days.
Putting the Three States Side by Side
| Rule | California | Alaska | Nevada |
|---|---|---|---|
| Daily overtime trigger | Over 8 hours | Over 8 hours | Over 8 hours, only if earning under 1.5x min. wage |
| Daily overtime rate | 1.5x (8–12 hrs), 2x (over 12) | 1.5x | 1.5x |
| Weekly overtime trigger | Over 40 hours | Over 40 hours | Over 40 hours |
| Seventh-day premium | Yes (1.5x, then 2x) | No | No |
| Small-employer carve-out | No | Under 4 employees | No |
| Alternative schedule relief | Yes, via 2/3 secret-ballot election | Limited | Yes, via written 4/10 agreement |
One more state worth a footnote: Colorado requires daily overtime after 12 hours. If your footprint keeps growing, the daily-overtime map is bigger than these three.
Common Mistakes That Create Liability
Applying the 40-hour rule everywhere. The single most expensive error is running one payroll configuration across all states. Audit every state where you have workers — including a single remote employee, who brings their state's overtime law with them.
Misclassifying workers as exempt. A salary and a senior-sounding title do not make an employee exempt. Each exemption has a duties test plus California's $70,304 salary floor (2026), and the duties test is where most classifications fail. When in doubt, treat the worker as nonexempt and pay the premium.
Forgetting the regular rate. Overtime is a multiple of the regular rate, not the base hourly wage. Shift differentials, nondiscretionary bonuses, and commissions feed into it. Payroll software handles this correctly only if every pay component is coded correctly.
Late overtime payments. In California, overtime wages must be paid no later than the payday for the next regular payroll period after they were earned. Chronic lateness adds waiting-time penalties to the underlying back pay.
Ignoring the seventh day. Scheduling six-day weeks during busy seasons is common in retail, hospitality, and logistics. The seventh consecutive day of work triggers premium pay from the first hour — budget for it or schedule around it.
Tracking Overtime Costs in Your Books
Daily-overtime states make labor cost forecasting harder, because the same 40-hour week can cost dramatically different amounts depending on how the hours are distributed. That is a bookkeeping problem as much as a compliance problem: if overtime premiums are buried in a single payroll line, you cannot see which locations, managers, or seasons are driving the premium, and you cannot price the seventh-day shift correctly when deciding whether the extra revenue covers it.
Break premium pay out of straight-time wages in your chart of accounts — separate overtime and double-time lines per location or department — and reconcile them against your timekeeping system each pay period. The reconciliation doubles as an early-warning system: a location whose overtime line jumps without a matching sales jump is either understaffed or mis-scheduling, and either way it is cheaper to fix the schedule than to keep paying the premium. Clean, categorized payroll records also make a wage-claim audit far less painful, since accurate time records are affirmatively the employer's duty in California.
Keep Your Payroll Records Audit-Ready
As you bring your scheduling and payroll into line with daily-overtime rules, maintaining clear financial records is essential — categorized wage data is what lets you spot premium-pay creep before it becomes a liability. Beancount.io provides plain-text accounting that gives you complete transparency and control over your financial data — no black boxes, no vendor lock-in. Get started for free and see why developers and finance professionals are switching to plain-text accounting.
