Sometimes workers are paid on a “daily rate” or a “day rate” – meaning the worker is paid a fixed amount of money to perform his/her job duties each day, regardless of how long the work actually takes to complete. While this may seem harmless, it is very risky for employers to pay their employees this way because they may not be paying overtime or minimum wage correctly.
Employees paid a “daily rate” must get paid overtime
California Labor Code § 515(d)(2) states, “Payment of a fixed salary to a nonexempt employee shall be deemed to provide compensation only for the employee’s regular, nonovertime hours, notwithstanding any private agreement to the contrary.”
What does this mean? Put simply, this means that when you are paid a day rate, the daily rate only compensates you for the first 8 hours of your work each day (or the first 40 hours of your non-overtime work each week). If you work more than 8 hours in a day (or more than 40 hours per week), your employer needs to pay you an additional amount on top of the daily rate.
For example, if a construction worker is paid a daily rate of $200 and works 8 hours, there is no issue with overtime – the worker is essentially being paid $25/hour for a full 8-hour day.
However, if another technician is paid a daily rate of $200 and works 10 hours, the worker just worked an additional 2 hours of overtime which he has not been compensated for. California law does not allow this. The worker is owed 2 additional hours of pay at his overtime rate (1.5x regular hourly rate), which in this example would be 2 additional hours of pay at $37.5/hour (1.5 x $25/hour).
The day rate must be more than minimum wage
You may also be owed wages if your daily rate makes it so that you are being paid less than minimum wage. As of 2025, the minimum wage in California is at least $16.50.
Let’s take another example. If a personal assistant or a housecleaner is paid $100 a day and works 8 hours a day, that means that the person is essentially being paid $12.50/hour ($100 divided by 8). This is $4 less than the California minimum wage! Therefore, the employee would be owed an additional $4 for each of those 8 hours she worked, plus other penalties such as liquidated damages (which basically means another $4 for every hour worked!).
If you are being paid a “daily rate” or “day rate,” there is a strong possibility that you are not being paid correctly for your labor. If you’d like us to help you evaluate your circumstances for free, please give us a call at (424) 235-4385. We provide same day consultations!