How to Set Up California Overtime

Setting Up Overtime Rules

The beginning of 2022 was the last phase-in of the overtime thresholds that began in 2019 for employers with 26 or more employees. Small employers (those with 25 or fewer employees) will begin a similar 4-year phase-in of lower overtime thresholds. Employers will need to update their Overtime Rules to adjust for the new thresholds and addition of daily overtime.

Employers with 26 or more employees are required to pay overtime after an employee has worked 8 hours in a day, double-time after 12 hours in a day and 40 hours in a workweek.

Go to Payroll > Setup > Overtime Rules. Use the information below to help you fill out your information. (The following information is based on 2023 rules.)

OT Rule Description

Select a rule from the look-up or type a new description to begin creating a rule.

For Each Day…	2023 Rules for California Large Employers
Pay overtime after	Enter 8.00 hours (Remember, for small employers with 25 or fewer employees, this must be changed each year for the next 5 years.)
Pay double-time after	Enter 12.00 hours

For Each Day…

2023 Rules for California Large Employers

Pay overtime after

Enter 8.00 hours (Remember, for small employers with 25 or fewer employees, this must be changed each year for the next 5 years.)

Pay double-time after

Enter 12.00 hours

Minimum Hours to Prorate

You can enter an amount in the Minimum Hours to Prorate for each day. What you enter here is completely up to you.

You may not want to prorate on small line amounts. For example, you may not want to prorate to a line that is just a break line. In that case, you would simply enter a .5 in the Minimum Hours to Prorate entry. Then lines with .5 hours or less will not be prorated. Click here to see examples.

For the Entire Week…	2023 Rules for California Large Employers
Pay overtime after	Enter 40.00 hours
Pay double-time after	Enter 0.00 hours unless you have a specific company policy.
Pay overtime on the	Enter 7.00 (the 7^th day )
Pay double-time after	Enter 8.00 hours on 7^th day
Pay double-time on the	Leave blank

Pro-rate weekly overtime premium over entire week

Select this option if you would like to prorate by week. Then you can enter a number in the Minimum Hours to Prorate for the week or leave the option blank to prorate all line amounts. Click here to see examples.