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An employer is only liable to pay a premium for “overtime work” as defined in CBA and not Section 510

Vranish v. Exxon Mobil Corporation (2014) 223 Cal.App.4th 103, 166 Cal.Rptr.3d 845

Plaintiffs were represented by a labor organization and their employment governed by the terms of a collective bargaining agreement (CBA). As per the CBA, Plaintiffs were regularly scheduled to work seven 12-hour shifts in a seven-day period and then have seven days off. The CBA provided that Plaintiffs would be paid at the overtime premium rate of one and one-half times their regular rate of pay for hours worked over 40 hours in a workweek or over 12 hours in a workday and no overtime was paid between eight and 12 hours in a workday.

Plaintiff alleged that the definition of “overtime hours worked” (Labor Code § 514) as defined by CBA did not provide for premium compensation for all “overtime hours worked”, as the word “overtime” is defined by section 510 of the Labor Code.

After a thorough scrutiny of plain language of Labor Code Section 514, legislative history, public policy, inter alia Court of Appeal noted as follows:

“When there is a valid collective bargaining agreement, employees and employers are free to bargain over not only the rate of overtime pay, but also when overtime pay will begin; moreover, employees and employers are free to bargain over not only the timing of when overtime pay begins within a particular day, but also the timing within a given week.”  (Emphasis added.) (Vranish)

Labor Section 514 reads:

§ 514. Employees covered by collective bargaining agreements; application of §§ 510 and 511

Sections 510 and 511 do not apply to an employee covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions of the employees, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.