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Whenever clocks go by an hour or two, the first thing that comes to the mind of most individuals is whether they will lose or gain one hour of sleep. Nevertheless, Daylight Saving Time (DST) would mean that California employers would have to compute wages, overtime, and payroll systems (especially among employees working the night shift) once again.
Such a one-hour change may create a lot of confusion for the workers who are on an overnight shift. Seven or eight hours are they paid? Nine instead of eight?
The labor enforcement agencies of California are focusing on proper timekeeping and minimum wage enforcement in terms of the overtime workers of midnight and late shift workers in 2025. If someone doesn't adapt to these changes, this can result in big fines, disputes, as well as audits by companies.
This blog will deconstruct the information that every California employer must understand about the DST payroll compliance and what is the optimal approach to remunerating the employees of the night shift.
California and most states of the United States, i.e., the clock changes twice a year:
In the case of day workers, it’s just normal business. However, to night-shift workers, the one-hour shift difference is a concern that will impact payroll and time worked.
This is where compliance is complicated and accuracy is important.
1. When Clocks “Spring Forward” Fewer Hours are Worked
Suppose that an employee is on a regular shift from 10:00 PM to 6:00 AM. Normally, that’s 8 hours.
However, the clock leaps forward by one hour in March, and the hour hand once more starts at 2:00 AM instead of 3:00 AM. Physically, the worker works not 8 hours but 7 hours.
So what should you pay?
In legal terms, you have to pay only for the hours that you work in reality, 7 hours in this case.
Nevertheless, most of the employers in California opt to compensate the entire length of the shift (8 hours) as a way of being just and also to retain their workers.
The key is consistency. Whichever strategy you take, implement it throughout your company and make it a part of your written policy.
2. When Clocks “Fall Back”; Extra Hours Worked
By the end of DST in November, the same overnight shift now has an additional hour since 2:00 AM will appear twice.
The employee will then work 9 hours rather than 8 in that case, and he or she must be paid for the 9 hours.
When that additional hour has the total exceeding 8 hours on a daily basis or 40 hours on a weekly basis, California overtime regulations become effective. The extra hour has to be remunerated at 1.5x the regular price of the employee.
Labor Code and Wage Orders of California require employers to provide compensation to the employees over an hour and keep the time records of all the shifts, including those that are affected by the DST.
The following are what the 2025 employers should remember:
1. Pay for Actual Hours Worked
California Labor Code 510 regulates that all nonexempt employees have to be paid their actual working hours, as well as any extra hours due to the fallback transition.
2. Overtime Compliance
In case the DST hour exceeds the daily or weekly time, overtime should be paid at 1.5 (or 2 times, in case of double overtime).
3. Accurate Recordkeeping
According to Wage Order No. 4-2001, employers have to keep accurate and verifiable time records. As a part of DST, any manipulation of manuals should be well-recorded.
4. Meal and Rest Breaks
Whether it is a clock change or not, employers should still offer the necessary meal and rest breaks according to the real hours worked.
Let’s look at two practical payroll scenarios:
Scenario 1: DST Begins – “Spring Forward” (March 9, 2025)
Employer Options:
Whatever your approach, document it in your employee handbook and payroll records.
Scenario 2: DST Ends – “Fall Back” (November 2, 2025)
Employer Obligations:
Even seasoned HR teams may fail during time changes. The following are some of the pitfalls to avoid.
1. Not Updating Time Clocks
Failure to sync physical or electronic clocks will cause loss or repetition of hours. It is necessary to update time systems at all times before starting a shift..
2. Overlooking Overtime
The one additional DST hour can be used to precipitate overtime compensation. Failure to consider it may be a breach of California wage laws.
3. Inconsistent Policies
The fact that some employees are paid for the hour that is lost and the other employees are not can create discrimination.
4. Manual Payroll Adjustments
Errors in calculations usually arise when manually edited. Softwares can help in payroll system automation and they can automatically change according to the DST changes.
5. Missing Audit Trails
In the absence of proper documents, it is hard to prove compliance when conducting audits. There should be detailed records that should always be kept.
You have to be prepared before the next time change.
1. Audit Your Payroll Software
Ensure your system automatically adjusts for DST transitions and recalculates overtime correctly.
2. Communicate with Night-Shift Teams
Educate the workers regarding changes in DST and its impact on their shifts and wages.
3. Train Payroll and HR Staff
Provide annual training on how DST affects payroll and California wage laws.
4. Document Every Change
Keep records of all DST updates in digital format and a paper file regarding payroll updates.
5. Review Overtime Reports
Verify overtime triggers following each time change to prevent unpaid wage claims.
The DST fall back period may subject the employees working on night shifts to overtime or even double time, depending on their time schedules.
For instance:
Moreover, hourly based benefits such as shift differentials or attendance bonuses can also require revision.
The payroll teams have to make these calculations transparent, accurate, and in accordance with the California Wage Theft Protection Act requirements.
Dealing with handling daylight saving time payroll is not necessarily a stressful experience in California.
Using the PayProNext state-of-the-art payroll software, employers can:
Payrolls should be accurate, fair, and compliant, and with automation and in-built compliance (tools), you can focus on business running, and PayProNext takes care of the compliance.
The following are the strategies that are proven to keep up with the payroll challenges when changing clocks:
These are the proactive measures that will save your business in terms of compliance issues - and create a sense of trust among your night-shift crew.
The Department of Industrial Relations (DIR) and California’s Labour Commissioner are responsible for actively looking for payroll errors, which include those as well which involve DST.
The consequences of non-payment of employees based on hours worked may include:
It is important to know that accuracy should never be considered only as an option, but it should be given a top priority as well.
Daylight Saving Time only occurs twice in a year, whereas payroll errors can surround you all year long. With the time changes of California employers coming in 2025, accuracy, automation, and compliance are the keys to success.
PayProNext makes it easy. Our payroll software automatically adapts to DST, it compensates overtime, and it ensures that your business is in every respect compliant with California wage and hour regulations no hand-editing or misunderstandings needed.
Simplify your payroll today.
Select PayProNext, the reliable payroll solution for night-shift workers, overtime compliance, and every minute that counts in California.
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