In California, both state and federal laws protect the rights of employees to be paid a fair wage. Wage laws protect a worker’s right to fair compensation for hours worked, overtime, and proper breaks. When employers violate those laws, their employees have a few different options for claiming and recovering unpaid wages, such as:
- Through the federal Department of Labor
- Through the California Division of Labor Standards Enforcement
- Through a wage and hour lawsuit
Wage claims should be filed as soon as possible due to the applicable statute of limitations. There may also be other issues connected to the claim such as discrimination, harassment, or retaliation. If you are experiencing any kind of violation of your legal rights at work, it may be in your best interests to speak with an employment attorney.
What Are Wages?
According to the state of California, wages are the payment an employee receives for performing work or service for their employer. This includes but is not necessarily limited to:
- Hourly rates
- Piece rates
- Salaries
- Task based rates
- Room and board
- Paid time off
Wages as a Right
California law specifies that all employees in the state have a right to their earned wages regardless of factors like immigration status. The employment relationship is considered a binding contract where labor is performed in exchange for payment. The California Labor Code protects an employee’s right to a minimum wage and any applicable overtime rates. Employers cannot create employment contracts circumventing these laws or making employees waive these rights. However, these laws only apply to workers who are defined as employees and do not protect independent contractors. Because of this, some employers will try to classify workers as independent contractors when they should be classified as employees. In these situations, the worker is still entitled to the rights and protections of an employee.
When Are Wages Due?
While there is some flexibility allowed for employers to design pay schedules, state law imposes several regulations. Generally, employees must be informed of their pay schedule at the beginning of their employment and must have no less than two pay days a month. There must be information detailing the pay schedule posted in the workplace.
There are specific regulations for semimonthly payments for pay periods that are the first two and last two weeks of each month. The wages for the first two weeks must be paid between the 16th and the 26th of that month. The wages for the second two weeks must be paid between the 1st and 10th of the next month.
Most other schedules are required to have a pay day within seven days of the end of the pay period. This generally covers weekly and biweekly paydays. Overtime wages must be paid by or on the payday for the following pay period.
Some employees may be exempt from these laws. This is generally those in professional, administrative, or executive types of positions. Employers are permitted to pay exempt employees only once a month so long as the pay date is no later than the 26th of the month and covers the entire month, including those after the pay date. Vehicle sales commissions may also be paid only once a month on a scheduled pay date. Some employees who receive room and board from their employer may also be paid once a month on a scheduled pay date. Each month’s wages must cover all hours worked that day and every day since the previous pay day. These pay periods cannot be longer than 31 days.
Employees engaged in agricultural work who are paid twice a month and do not receive room and board must be paid for the first two weeks of the month by the 22nd and for the last two weeks by the 7th of the following month.
There may be other extenuating circumstances for specific employees in specific industries. It is always important to know exactly what your rights are under the law.
When Are Final Wage Due?
California also has specific regulations for an employee’s final payment.
- If an employee is terminated, all unpaid wages earned including unused paid time off must be paid on the day of termination. There are some exceptions to this with modified limits.
- If an employee resigns with at least 72 hours of advance notice given to the employer, they must be given all unpaid earned wages including unused paid time off on their last day.
- If an employee resigns without providing at least 72 hours of advance notice to the employer, they must be given all unpaid earned wages including unused paid time off within 72 hours of their last day.
Although California law does not require employers to provide their employees with vacation pay, it does consider any vacation pay given to be earned wages. Therefore, any unused vacation pay that the employee has accrued must be paid with the rest of their final wages.
Common Wage Violations in California
While the Fair Labor Standards Act lays out the basic requirements for employment law in the country, the individual states have their own laws and regulations that they implement. California is particularly known for having strong wage laws in favor of employees. Common wage violations in California include:
- Failure to pay at least the minimum wage
- Failure to pay for all hours worked
- Failure to pay correct overtime rates
- Failure to provide correct paid breaks
- Failure to compensate for late or missed meal breaks
Determining If Wages Are Owed by an Employer
There are specific guidelines for the minimum wage, overtime rates, and meal break violations for non-exempt employees. California law mandates that if an employer does not adhere to those guidelines, they can be liable for unpaid wages to the employee.
Minimum Wages
The federal minimum wage in the country is $7.25 per hour. Individual states can set their own minimum wage so long as it is above that amount. As of 2023, the minimum wage for California is $15.50 per hour. Counties and cities can also set their own minimum higher than the state amount. Los Angeles county has a minimum wage of $16.78 per hour, and the city of Santa Monica has a minimum wage of $16.90 per hour. Some states allow employers to pay less than the minimum wage to employees who earn tips, but California employers must pay their employees no less than the minimum wage regardless of tips.
Overtime Wages
California employers must pay non-exempt employees one and a half times their normal pay rate for every hour worked over:
- 8 hours in a workday
- 40 hours in a workweek
- 6 days in a workweek
They must pay two times the normal rate of pay for every hour worked over:
- 12 hours in a workday
- 8 hours on the 7th consecutive day worked
However, there are employees who are exempt from earning overtime pay, such as salaried employees, executives, and outside salespeople.
Meal and Rest Break Wages
California employers must provide non-exempt employees with one 30-minute break for every 5 hours worked. If a shift is exactly 5 hours, they do not need to be provided with a lunch break so long as they clock out before or exactly at the fifth hour. It is also up to the employer if the break is paid or unpaid. However, if the employee is made to work through their break, it must be paid. California employers must also provide non-exempt employees with one 10-minute break for every 4 hours worked. This must be a paid break. Employers who deny their employees the proper breaks may have to pay a meal violation penalty of one hour’s worth of wage for each missed or late break.
Paid Sick Leave
California employers must provide their employees with paid sick leave. All employees regardless of part-time or full-time status are entitled to no less than 24 hours of paid sick leave per 12-month period. The hours can be provided as a lump sum at the beginning of the year or accrued at a rate of at least 1 hour for every 30 hours worked. These hours cannot be lost at the end of the year, but employers are permitted to cap the accrual at 48 hours. California does not require employers to provide paid vacation days, but some employers may allow employees to use their sick time as paid time off for any reason.
Off the Clock Wages
California employers are not permitted to require or allow employees to work off the clock for free. This includes:
- Work done before a shift
- Work done after a shift
- Working through lunch
- Working from home
- Being on call
All labor performed by the employee for the employer must be compensated at no less than the employee’s normal rate of pay including any applicable overtime rates. Being on standby or on-call has its own requirements and guidelines under wage and hour laws.
Which California Employees are Protected by Wage and Hour Laws?
Generally speaking, the average employee paid an hourly rate in California is considered non-exempt and is protected by the state wage and hour laws. Exempt employees are generally those who are:
- Executives / Administrators / Professionals
- A parent, spouse, or child of the employer
- Under specific collective bargaining agreements
- Paid by commission
- Paid by piece rate
- Paid by salary
White Collar Workers
Employees who are considered white collar workers are those in executive, managerial, administrative, or professional positions. They may be considered exempt from California wage and hour laws if they:
- Are paid a monthly salary that is no less than twice the minimum wage at a full-time rate
- Are engaged in managerial, intellectual, or creative work at least 50% of the time
- Perform their job duties using independent judgement and personal discretion
Independent Contractors
Independent contractors are not considered employees under California state labor laws and are not granted the same legal protections as workers classified as employees. However, it is not uncommon for employers to misclassify a worker as an independent contractor when they should be classified as an employee. In those situations, the worker may be able to make a claim against their employer for misclassification and may be able to recover for wage and hour violations.
What Can You Do If Your Employer Doesn’t Pay You in California?
Employees have the right to file claims for wage and hour violations, whether through the court or a government agency. If the violations have been committed against many employees, they may be able to bring a class action suit against their employer. Violations that may result in a wage claim include but are not limited to:
- Unpaid wages
- Unpaid overtime
- Unpaid earned PTO
- Late wages
- Missed breaks
- Unpaid meal penalties
- Misclassification
- Paying less than minimum wage
- Not paying agreed upon rates
- Unlawful deductions
- Unpaid reimbursements
The DLSE has resources available on their website for employees to file claims including the Initial Report or Claim form, also known as Form 1. Employees should be certain that they document all issues and grievances against their employer so that they can be sure to take the appropriate action.
Wage Claim Violation Options
It is generally encouraged for employees to attempt to give their employer the opportunity to resolve issues internally by making a detailed written complaint emailed to human resources or the equivalent person or department. If this is unsuccessful, claims can be filed:
- As a civil lawsuit
- With the federal Department of Labor
- With the California Division of Labor Standards Enforcement
Civil Lawsuits
When dealing with a single wage claim, a lawsuit might be overkill. Lawsuits are a formal process that can cost more time and money than a small wage claim might be worth. Wage claims that are part of multi-issue employment claims such as discrimination, harassment, and retaliation cases or as class action suits are more common.
Private Attorney General Act (PAGA) Claims
In addition to the owed wages, employers who violate wage and hour laws may be subject to additional fines and penalties. First violations can carry a $100 fine for each employee affected. Anything after that and any willful or deliberate violations can carry a $200 fine for each affected employee as well as 25% of the unpaid wages. Payment for the penalties is given to the state of California. However, affected employees are permitted to file a civil lawsuit against their employer under the Private Attorney General Act in order to recover as much as 25% of the penalty as well as any fees and costs they incurred.
Federal Wage Claim
If an employer’s actions are in violation of federal law, the employee may be able to file a claim with the Department of Labor’s Wage and Hour Division. However, employees in California may have better luck with the California Division of Labor Standards Enforcement. This is due to the fact that the state laws afford many more protections for employees than the federal law including a higher minimum wage and better overtime requirements.
Wage Claim with DLSE
State laws like the California Labor Code are designed to protect the rights and interests of employees in regard to things such as:
- Minimum wage
- Overtime pay
- When wages are paid
- How wages are paid
When employers violate these laws, their employees may file a claim with the DLSE who can investigate those violations and pursue a solution.
Which Wage Claim Option is Best?
There are pros and cons to any option depending on the details of each specific situation. It is advisable to speak with an attorney to get a better understanding of what those are for you. Generally speaking, for wage and hour claims with no other charges, it is often recommended that employees in California contact the DLSE for several reasons such as:
- Less expensive than a lawsuit
- Less time consuming than a lawsuit
- Better chance of a positive outcome
- DLSE holds their own hearings
- The employee can have an attorney represent them
- DLSE can subpoena witnesses
- DLSE can demand documents from employer
- DLSE can pass judgement and issue citations
California Wage Claim Process
Follow the steps below to file a wage claim in California:
Collect Evidence
In addition to Form 1, the Initial Report or Claim, the DLSE has several documents for employees to calculate and report various types of wage and hour violations.
- Form 55 – Meal and rest break violations and violations within irregular schedules
- Form 155 – Unpaid or improperly paid commissions
- Form RCI 1 – Retaliation for engaging in a protected activity
- Vacation Pay Schedule – Documenting and calculating earned, used, and owed PTO
Employees should also compile copies of whatever personal documentation they have such as pay stubs, checks, employment and compensation agreements, and timecards. The DLSE does not require employees to provide these documents, but they can be helpful if available.
Primary Steps
Information, instructions, and forms for filing an unpaid wage claim can be found under “How to File a Wage Claim” on the DLSE website. Once the claim is filed, a Deputy Labor Commissioner decides what happens next out of three options:
- Dismissal
- Conference
- Hearing
The employee will be notified of the Commissioner’s decision no more than 30 days after they file the claim. One of the reasons a claim might be dismissed is if it falls outside of the jurisdiction of the DLSE, so it is important to be sure you are taking claims to the proper authority.
Settlement Conference
A conference is a way for the parties to try and settle the matter informally. Even if the commissioner decides that a hearing is necessary, they may also choose to hold a conference first. The employee and the employer will receive a Notice of Claim Filed and Conference from the DLSE that outlines the claim and details for the conference. Conferences are generally held within 30 days of sending the notice when possible. A Deputy Labor Commissioner will meet with both sides, often together and separately, to go through all of the details of the situation. If the parties are able to come to a settlement, it is wise to speak to an attorney before signing the agreement in order to protect your interests and future options. If the employee does not show up to the conference, or if the Commissioner determines that the claim does not have merit, the claim may be dismissed. If the parties cannot come to an agreement or if the employer does not show up, the claim may be referred to a hearing.
Evidentiary Hearing
An evidentiary hearing is a less formal version of a court trial. The parties will meet at the DLSE offices, generally in a conference room or labor commissioner’s office, to present their side of the situation. The labor commissioner may make an opening statement before allowing the employee to present their evidence and witnesses. The labor commissioner and the employer should be provided with copies of any documentation evidence. The employee should also be prepared to answer any questions the commissioner has for them. The employer will then be given a chance to argue their defense. They may also present evidence and witnesses and the employee may question those witnesses. Afterwards, the Labor Commissioner will decide if anything is owed to the employee and send written notice of their decision to both parties. If payment is due, the notice will explain how much is owed and how long the employer has to make payment.
Appeals
If either party is unhappy with the outcome of the hearing, they have 10 days in which to file an appeal. The instructions for how to do so will be included in the notice of the Labor Commissioner’s decision. It is advisable to have an attorney assist with the new hearing. If the party filing the appeal does not win, they might be liable for the other party’s attorney’s fees.
What is the Statute of Limitations for Filing a Wage Claim in California?
A statute of limitations is the time period in which it is possible to file a claim. There are sometimes extenuating circumstances that can extend the limit or exempt someone from it depending on the type of claim, but these are rare and specific. Outside of these limited exceptions, you cannot file a claim after the statute of limitations has expired. Generally speaking, employees in the state of California have three years to file a wage and hour claim starting from the date of the last violation.
What Damages Can I Receive from a California Wage Claim?
Different wage and hour violations carry different penalties. Meal and rest break violations can carry a penalty of one hour of pay for each day of violation. Minimum wage violations are generally compensated in liquidated damages in the amount of the unpaid wages. Paystub violations can carry a penalty of $50 for the first violation and $100 for every violation afterwards up to $4000. Late final payments may result in waiting time penalties in the value of a day’s pay for each day of violation up to 30 days. The penalty for failure to provide sick leave is three times the value of the hours denied with a minimum of $250 and a maximum of $4000.
Can My Employer Retaliate for Filing a Wage Claim?
Exercising your right to protections granted under wage and hour laws is a protected activity. It is illegal for employers to retaliate against employees who:
- Complain about wage and hour violations
- Filing a claim for wage and hour violations
- Participate in an investigation into wage and hour violations
- Testify at a hearing regarding wage and hour violations
If an employer takes adverse employment action against an employee as punishment for engaging in such protected activities, it is illegal retaliation. An employee who was fired for engaging in protected activities may have a case for wrongful termination.
Contact Mesriani Law Group if You Are Owed Unpaid Wages
When facing any legal issue, it is usually beneficial to at least have an attorney review your situation. For basic wage and hour claims, it may be best to go through a government agency which does not require but does permit the assistance of a lawyer. However, oftentimes there are multiple layers to employment issues. The wage and hour violations may be motivated by some type of discrimination or retaliation, or the employee may have been terminated for making complaints. In these cases, it may be best to file a lawsuit against the employer with multiple claims. An employment attorney can sort through the details, ask questions, and help you make the best-informed decision for your specific situation. If your employer is committing wage and hour violations, call Mesriani Law Group today for a free consultation.
Wage Claim FAQs
Can I sue for unpaid wages in California?
If an employer violates wage and hour laws, the affected employees have a right to file a claim against them. These violations often include:
• Paying below the minimum wage
• Not paying for all hours worked
• Not paying agreed upon rates
• Not paying overtime rates
• Not providing rest or meal breaks
• Not paying for missed or late meal breaks
• Not paying wages on time
What can you do if your employer doesn't pay you in California?
When an employer commits wage and hour violations, the affected employees can file a claim in a few different ways:
• As a lawsuit
• With the DOL
• With the DLSE
The best option depends on the details and circumstances of each specific case. Going over the situation with an employment attorney can help determine the best path to take. The applicable government agencies also have information and resources on their respective websites.
Is there a time limit on claiming unpaid wages?
The statute of limitations for filing a wage claim regarding minimum wage, overtime, reimbursement, and deductions is three years from the date of the last violation. If an employer breaks an agreement where they promised to pay an amount more than the minimum wage, the employee has two years to file a claim if the agreement was oral and four years if it was a written contract.
