Fixed Salaries That Include Overtime Outlawed in California

Author: Michael Cardman, XpertHR Legal Editor

California employers are now prohibited from using explicit mutual wage agreements, in which nonexempt employees agree to a fixed salary that covers all hours worked, including overtime.

The agreements, similar to "Belo" plans in the federal arena, were intended to simplify payment to employees with irregular hours.

California Governor Edmund "Jerry" Brown has announced that he signed into law a bill, +2011 Bill Text CA A.B. 2103, which amends +Cal. Lab. Code § 515 to forbid such plans.