California Labor Compliance
7shifts provides tools to help employers maintain compliance with California labor requirements, including automated overtime calculations and labor exception tracking. By enabling California as a jurisdiction, 7shifts automatically sets overtime calculations to the Regular Rate of Pay as required by state regulations.
Things to know
- Access to California labor compliance features may require an upgrade from your current 7shifts plan.
- The Labor Exceptions report is only available if you use 7punches or a POS labor integration.
- Admins, Managers, and Assistant Managers require "Can manage time punches", "Can manage exceptions", and "Can run reports" permissions to view reporting pay.
- Reporting pay hours do not contribute to the calculation of worked hours or overtime.
- Rounding rules enabled for 7punches may affect shifts eligible for reporting pay and associated costs.
Enable California labor compliance
Setting labor rules at the company level applies these settings to all locations by default.
If you need to set or customize these compliance options for specific locations, you can do so by navigating to the Locations settings for the relevant location and modifying the Labor & Compliance section there. Learn how to set Location-Level Settings here: Labor & Compliance Settings
- Log in to the 7shifts web app as an Admin.
- In the left navigation bar, head to Settings > Company Settings.
- Select the Labor & Compliance tab.
- Under Jurisdiction, select California, California - Berkeley or California - Emeryville.
- Review and set your specific overtime, break, and wages settings.
- Under the Advanced Labor section, check the compliance options according to your preferences.
- Click Save to complete the changes.
Important: To restore default California settings, click Re-sync labor & compliance settings.
Regular Rate of Pay
For accounts that select California as their jurisdiction, the overtime calculations in 7shifts are automatically set to Regular Rate of Pay.
⚠️ On July 15, 2021, the California Supreme Court ruled that overtime must be paid at the regular rate of pay—a weighted pay rate versus solely the hours worked.
Click here to learn more about the Regular Rate of Pay option in your Overtime settings.
Regular rate of pay is calculated as a weighted average of all the shifts an employee has worked multiplied by the wage paid for each hour (from all Roles, across all Departments/Locations), divided by the total hours worked in a period. For example: if an employee worked 30 hours at $10, and 30 hours at $20, the regular rate of pay is $15/hour.
Set Compliance Options
- Review and set your overtime, break, custom break, and wages & pay settings.
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Under the Advanced Labor section, California labor compliance settings will automatically populate as per the Jurisdiction set earlier. Checkmark the options according to your preferences:
- Be sure to hit Save to complete these changes!
- To restore default California settings (including Overtime rules), click Re-sync labor & compliance settings.
Types of Exceptions
Meal breaks are breaks of 30 minutes or more. Depending on the length of shift, 1 or 2 meal breaks may be required. An exception occurs when the required number of meal breaks are not taken and/or if Meal Break #1 is not started before the end of the 5th hour (4:59) of the shift.
For each exception, an employee should be rewarded with 1 hour of pay at the regular rate of pay. 7shifts checks the time punch records to determine if the required breaks were taken on each shift. For more details please review the State of California website.
Rest Breaks are breaks of at least 10 consecutive minutes and must be paid breaks. Depending on the length of shift, 1-4 rest breaks may be required. A break that was counted as a Meal Break, CANNOT also be counted as a Rest Break.
An exception occurs when the required number of Rest Breaks are not taken. For each exception, an employee should be rewarded with 1 hour of pay at the regular rate of pay. For more details please review the State of California website.
An exception occurs if an employee has two punches, in the same day, separated by 60 minutes or more. For each exception, an employee is entitled to one hour of premium pay at the rate of the minimum wage. This premium pay can be offset if the employee's wage is higher than the minimum wage. For more details please review the State of California website.
Reporting Pay is a form of wages owed when an employee is required to report for work but is furnished less than the required minimum amount of work.
In California, Reporting Pay applies to both scheduled and unscheduled reporting, including call-in shifts, unscheduled shifts worked at the employer's request, and second reporting in the same workday. It applies when an employee:
- Reports to work as requested by the employer, and
- Is furnished less than half of their usual or scheduled day's work, or
- Works less than 2 hours on a reporting that day
Employees must be paid a minimum of two hours and no more than four hours of Reporting Time Pay, compensated at the employee’s regular rate of pay, which must be no less than the applicable minimum wage.
For example:
An employee is scheduled for 8 hours but works 4 hours or less → owed 4 hours of pay
An employee is scheduled for 3 hours but works 1.5 hours → owed 2 hours of pay
An employee is not scheduled, is called in, and works 1.5 hours → owed 2 hours of pay
⚠️ Reporting pay may require an upgrade from your current plan.
⚠️ Managers/Assistant Managers require the following permissions to have visibility on this feature: ‘Can manage time punches’, ‘Can manage exceptions’, and ‘Can run reports’.
⚠️ Reporting pay hours do not contribute to the calculation of hours worked, such as overtime hours.
⚠️ If rounding rules have been enabled for 7punches, this may affect shifts eligible for Reporting Pay and the costs associated.
If an Employee has a missed Meal Break waiver on file, this will be shown in the punch modal. You can indicate in an Employee's profile whether they have signed a waiver for ' 6hrs & out' and '10hrs & out'.
Dismissing a Rest Break can not be done using a waiver, and must use Employee Attestation each time a break is missed.
1. To enable this feature, go to Company Settings > Labor & Compliance > enable 'Meal Breaks' > enable waivers.
2. Navigate to Team > Employee profile > Employment tab to indicate whether that Employee has signed their waiver:
These indications are then shown in the punch edit modal for that Employee:
Skip to here for more information on dismissing exception warnings for missed breaks.
Jurisdictional Exceptions
By selecting the jurisdictions of California - Berkeley, you would have access to all California Labor Exceptions in addition to these jurisdiction-specific exceptions:
Right to rest
Employees require an 11-hour rest period after a previous day's shift. A warning appears on the schedule if a shift falls within a rest period and a premium is paid equivalent to 1.5 times the employee's base rate for all hours worked within the rest period if the employee punches in.
Predictability pay
Employers must provide at least 14 days' notice for work schedules. If a manager changes a published schedule within that 14-day window, Predictability pay is required.
These penalties only apply to employer-initiated changes.
Predictability pay is not owed if the employee voluntarily requests the change (e.g., shift swaps, sick leave, or voluntary time off).
1 to 14 days’ notice: Any change (adding/subtracting hours or moving a shift) triggers 1 hour of pay.
Less than 24 hours’ notice (Add/Move): Adding hours or moving a shift triggers 1 hour of pay.
Less than 24 hours’ notice (Cancel/Reduce): Canceling or reducing a shift triggers 4 hours of pay (or the number of hours reduced, whichever is less).
Important: Fair Workweek Berkeley is only required for companies with 10 or more employees. Only enable this exception if your company qualifies.
By selecting the jurisdictions of California - Emeryville, you would have access to all California Labor Exceptions in addition to these jurisdiction-specific exceptions:
Right to rest
Employees require an 11-hour rest period after a previous day's shift. A warning appears on the schedule if a shift falls within a rest period and a premium is paid equivalent to 1.5 times the employee's base rate for all hours worked within the rest period if the employee punches in.
Predictability pay
Employers must provide at least 14 days' notice for work schedules. If a manager changes a published schedule within that 14-day window, Predictability pay is required.
These penalties only apply to employer-initiated changes.
Predictability pay is not owed if the employee voluntarily requests the change (e.g., shift swaps, sick leave, or voluntary time off).
1 to 14 days’ notice: Any change (adding/subtracting hours or moving a shift) triggers 1 hour of pay.
Less than 24 hours’ notice (Add/Move): Adding hours or moving a shift triggers 1 hour of pay.
Less than 24 hours’ notice (Cancel/Reduce): Canceling or reducing a shift triggers 4 hours of pay (or the number of hours reduced, whichever is less).
Important: Fair Workweek Emeryville is only required for companies with 56+ employees globally, 20+ locally for fast food and retail. Only enable this exception if your company qualifies.
By selecting the jurisdictions of California - LA County, you would have access to all California Labor Exceptions in addition to these jurisdiction-specific exceptions:
Rest between shifts
Employees require a 10-hour rest period between shifts. A warning appears on the schedule if a shift falls within this rest period. If the employee works during this window, a premium is paid equivalent to 1.5 times the employee’s regular rate of pay for all hours worked within that rest period.
Predictability pay
Employers in Los Angeles County must provide work schedules at least 14 days in advance. Premiums are required if a published schedule is changed within that 14-day window.
- Employers owe one hour of predictability pay at the regular rate for any change to the date, time, or location that does not reduce time, or for any change resulting in more than 15 minutes of additional work time
- Employers owe 50% of the regular rate of pay for the time reduced if a change results in more than 15 minutes of less work time.
Exemptions
- Predictability pay is not owed if the employee voluntarily requests the change (e.g., shift swaps, sick leave, or voluntary time off).
By selecting the jurisdictions of California - San Francisco, you would have access to all California Labor Exceptions in addition to these jurisdiction-specific exceptions:
Predictability pay
Employers in San Francisco must provide work schedules at least 14 days in advance. Premiums are required if a published schedule is changed within that 14-day window.
- Employers owe one hour of predictability pay at the regular rate for changing a shift date or time, or cancelling a shift, with less than 7 days but at least 24 hours of notice.
- Employers owe two hours of predictability pay at the regular rate for changing a shift date or time, or cancelling a shift, if the shift was 4 hours or less with less than 24 hours of notice.
- Employers owe four hours of predictability pay at the regular rate for changing a shift date or time, or cancelling a shift, if the shift was greater than 4 hours with less than 24 hours of notice.
Exemptions
- Predictability pay is not owed if the employee voluntarily requests the change (e.g., shift swaps, sick leave, or voluntary time off).
View Exception Warnings
Exception warning will appear for Admins and Managers/Assistant Managers in the following areas:
To avoid/reduce exceptions, you will be warned about potential exceptions as you make changes to your schedule. Each time you make a change to a shift that causes one or more exceptions, a warning modal will appear indicating the type of exception and the associated cost.
Before publishing a schedule, view a summary of potential exceptions, costs, and details. Once published, each exception appears in the report.
Once published, the exception will be recorded in the report.
You will also see a warning when assigning shifts through the Shift Pool that could cause an exception:
On the Time Clocking page as an exception warning:
On a Punch Overview:
Exceptions for missed breaks and split shifts will show on the left side of the punch.
If an Employee misses a Meal Break or a Rest Break, these exceptions can be dismissed from within the punch modal.
To dismiss the missed break exceptions based on Employee waivers, click on the break and then 'Dismiss Exception'.
⚠️ Dismissing a Rest Break can not be done using a waiver, and must use Employee Attestation each time a break is missed.
The exception warning will then be faded /ignored. You can restore the exception by clicking on it again, then 'Restore Exception'.
Click here to view all 7punches settings.
Admins and Managers/Assistant Managers (with permissions) can click on the warning to further dismiss/restore an exception warning:
The Worked Hours and Wages Report:
Similarly, you can export the report directly from a closed timesheet:
The Labor Exceptions Report:
The Punch Audit Report, when the exception has been dismissed:
More Compliance Tools
Check out this article to manage labor exceptions even further with automatically dismissed meal break waivers, and attestations.