For the purpose of calculating overtime is this correct:
Holiday and Paid Time Off are not considered worked hours therefore they do not get counted towards overtime.

Example:
SUN - worked 6 hrs
MON - worked 8 hrs
TUE - 8 hrs PTO
WED - worked 8 hrs
THU - worked 8 hrs
FRI - worked 8 hrs

Paid for: 8 PTO hrs and 38 Regular hrs.

Would this example be correct? And would this apply for Holiday also?

Thank you,
masha

Yes and yes.

Only time WORKED counts toward overtime. Holiday pay, PTO, vacation, sick, personal, or other paid leave does not. The employer may if they choose to, but they are not compelled to.

Thank you cbg.

Would you please tell me if you know where I can find a written proof of such. I need to go to my employee and explain this to him, he is not going to like it. I feel more confident when I can provide a proof so it does not seem like my decision.

Thank you!
masha

That would depend on exactly what you are trying to prove, but the following federal DOL webpage spells out the federal overtime rules pretty clearly.

http://www.dol.gov/esa/regs/compliance/whd/whdfs23.htm

Thank you DAW.

What I am trying to prove is that Holiday and PTO hrs are considered not working hours.
Furthermore, those non working hours are not calculated towards overtime.

Thank you,
masha

Thank you DAW.

What I am trying to prove is that Holiday and PTO hrs are considered not working hours.
Furthermore, those non working hours are not calculated towards overtime.

Thank you,
masha

Then you did not read the link provided by DAW.

In part, it said:

Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such.

Emphasis added.

Payments which are not part of the regular rate include pay for expenses incurred on the employer's behalf, premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays, discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays, or illness.

Emphasis added.

Good emphasis, Scott. :D

You are wonderful. Thank you!

This is federal rule, are they any different in California?

masha

In this particular situation, no, California does not have any regulations providing additional requirements, nor does any other state.

Thank you!

Just as an FYI:

An employer is not required to include holidays, vacation or sick time in the calculation of overtime and cannot be compelled to in the absence of a contract that says otherwise. But an employer may choose to do so; it does not violate any laws to do more than the law requires.

In that case it should state so in the Company Policy Book, right!? If it does not than we should not pay overtime.

Thank you.

There is no "law" that company policies must be formalized into a written policy to be valid, although arguably it is a good idea to do so. You do not want your employees to claim that the policy is something other then what the company thinks it is. Worse, you do not want to have a confused policy that is not consistently followed. A well written formal policy can help to avoid these problems. But this is not a legal requirement, just common sense and good business practice.

OK. I agree with you, written policy is a good business practice.
I like to show a written proof of a law or Company Policy when there is an issue. Employees like to see the written statement of the practice or the action taken.

Thank you.