The federal Fair Labor Standards Act (FLSA) and its associated regulations set minimum standards regarding wages, hours, and other labor practices for employers throughout the United States. In addition, the California Labor Code imposes many additional requirements on employers that are more protective than federal law. Indeed, California’s wage and hour laws are among the most employee-friendly in the nation, and the obligations California employers owe to their employees are detailed and complex. California’s wage and break laws govern all aspects of an employee’s time at work, from overtime and minimum wages, to vacation and reporting time pay, to meal and rest breaks.
If you are reading this, you may be asking yourself one or more of the following questions: Does my employer owe me unpaid regular or overtime wages or unreimbursed business expenses? Am I being denied overtime pay and other employment benefits because my employer tells me that I am exempt from overtime? Have I been misclassified as an independent contractor when I am being treated as an employee?
We welcome your questions. The plaintiffs’ employment lawyers at Rukin Hyland have recovered tens of millions of dollars in unpaid wages on behalf of employees in California and nationwide in class action litigation. We have also successfully resolved many wage and hour claims for individual employees — both by filing claims with the California Division of Labor Standards Enforcement and by bringing lawsuits in California state and federal courts. Although we provide some basic information about wage and break claims below, if you believe that your employer’s pay practices do not comply with the law, contact an attorney at Rukin Hyland for a free consultation to discuss your potential wage and hour claim.
- Minimum wages
Employees in California must be paid the applicable minimum wage as required by state or local law. The minimum wage in California is currently $10.00 per hour, and Governor Jerry Brown recently signed a bill to raise the minimum wage gradually, until it reaches $15.00 per hour in 2022. Some localities also impose a higher minimum wage obligation on employers. In San Francisco, for example, the minimum wage became $13.00 per hour on July 1, 2016 and increases annually.
Further, in California, employees must be paid the minimum wage for each hour they work. Unlike federal law, the California Labor Code does not permit the averaging of total compensation over total hours worked in a given pay period to satisfy minimum wage obligations.
- Unpaid wages
It is a violation of California’s labor laws for an employer to fail to pay wages in a timely manner, including commissions and bonuses owed to workers. An employee who is owed regular wages (whether commission pay, bonus or incentive pay, piece rate pay, or hourly pay) can bring an action to recover those wages, plus attorneys’ fees and costs, under California Labor Code § 218.5.
- Overtime pay
Federal law requires the payment of overtime (at a rate of one-and-one-half times an employee’s normal pay rate or “time and a half”) after forty hours of work in a week. California’s overtime laws are generally more favorable for employees than federal laws or the laws of other states. In addition to being entitled to overtime pay after working forty hours per week, employers must generally pay workers at an overtime rate for any hours worked over 8 hours per day. California workers are also entitled to double-time pay (i.e. twice their regular rate of pay) after twelve hours per day or after eight hours on the seventh work day in a week.
- Meal and rest breaks
Generally, if an employee works more than 5 hours per day, the employer must provide an uninterrupted 30 minute meal break relieved of all duty—that is, the employee is not permitted to perform any work duties while on break. The employer must also permit a ten minute rest breaks for every 4 hours of work (or major fraction thereof). Although it is not an employer’s duty to police its employees to ensure they are performing no work during their breaks, if your employer does not permit you to take a daily meal break in your first five hours of work or does not authorize two ten-minute rest breaks in a normal eight hour shift, you may have a claim for meal and rest break violations. Further, California employees who are not provided with lawful meal or rest breaks are entitled to “premium payments” – one hour of pay for each break missed. If you are a California employee who lacks a mechanism for reporting missed breaks or has reported missed breaks but has not been paid premium payments, you may have a meal or rest break claim under the California Labor Code.
Some employers also impose so-called on-duty meal period agreements on their employees, by which employees agree to take their meal periods on duty. Such agreements may be unenforceable, particularly where the nature of the work does not require an on-duty meal period. The security guard industry, for example, has faced numerous lawsuits involving unlawful on-duty meal period agreements. See, e.g., Abdullah v. U.S. Security Associates, Inc., 731 F.3d 952 (9th Cir. 2013).
- Working off the clock
Employees must be paid for all overtime or other hours that they are suffered or permitted to work, even if the employer does not formally authorize the work. Sometimes, an employer may unlawfully direct or permit its workers to work unreported overtime “off-the-clock.” For example, in a highly publicized case involving a “big box” retailer, hourly employees had been assigned a certain number of duties that had to be completed within their 8-hour shift. If the duties could not be completed in that period, employees were told that they had to finish on their own time—a practice constituting unlawful “off-the-clock” work.
Moreover, time spent donning or doffing protective equipment, or waiting in security lines before or after a work shift, may be compensable under California law, even when that time may not be compensable under federal law.
- Reporting time pay
If an employer requires an employee to report for work for less than half of his regularly scheduled hours, the employer must pay the employee for one half of his normally scheduled workday (at least 2 hours but not more than 4 hours).
- Prevailing wages
An employer with a public works contract with a California governing body must pay its workers the prevailing wage, which is a minimum wage set by the Department of Industrial Relations. In addition, some cities and counties have living wage ordinances that require county vendors to pay higher than minimum wages to their employees. For example, in December 2014, Santa Clara County passed a living wage ordinance that requires every employer who does business with the county to pay a minimum hourly wage of $19.06 per hour.
- Unauthorized deductions from paychecks
Except in limited circumstances, an employer may not deduct from an employee’s wages any monies the employee owes to the employer. Instead, the employer is required to seek payment using the same procedures as any other creditor of the employee.
- Misclassified Employees
California and federal hourly employees are entitled to the wage and break protections described above, as are salaried employees, unless they qualify as exempt from overtime under a few narrow exemptions for “white collar” employees and commissioned salespersons. The so-called “white collar” exemptions apply only to certain managerial, administrative, and professional employees who exercise substantial discretion and independent judgment in the performance of their jobs.
Employers often mistakenly or intentionally treat certain categories of employees as exempt from overtime pay — when in fact they should be classified as non-exempt employees entitled to overtime pay. For example, a major drugstore chain recently settled claims that it had misclassified its northern California “managers” and “assistant sales managers” as exempt from overtime. In fact these managers spent most of their time performing the same work as the hourly employees they supervised and were entitled to overtime pay. Other employees who are sometimes misclassified as exempt include:
- Independent Contractors
- For more information on whether you may be misclassified as an independent contractor, read our blog post.
- Information technology workers
- Computer programmers, software engineers, and other computer-related positions
- Transportation workers, such as shuttle bus drivers, ground carriers, delivery services, couriers, messengers, and newspaper delivery drivers
- Managers of fast-food restaurants and retail stores who do not perform primarily managerial work
- On-call workers such as firefighters, nurses, emergency medical technicians, ambulance drivers, and other first responders
Regardless of whether you are an hourly or salaried worker, however, certain wage and hour protections apply to all California employees’ employment, including the following:
Employers must reimburse workers for expenses they incur as part of their jobs, such as travel expenses (but not commuting costs), the purchase of uniforms and certain tools, and cell phone usage costs. Increasingly, we find that certain employers are attempting to shift these and other costs onto employees, sometimes in connection with an independent contractor misclassification scheme. Rather than being paid for the work they perform, employees wind up paying for the opportunity to work and bearing the employer’s costs of doing business.
An employer may not have a “use it or lose it” plan whereby employees lose vacation days they have already earned if those days are not used within a particular year.
Employers must pay employees for all hours worked and any unused and unpaid vacation hours upon termination of employment. An employer’s failure to do so may subject it to significant “waiting time penalties” that dwarf the amount of unpaid wages. For example, because the assessment of waiting time penalties is tied to the employee’s regular rate of pay, and not the amount of unpaid wages, the failure to pay a highly compensated employee just a few dollars in owed wages at the conclusion of employment could result in significant waiting time penalties pursuant to Labor Code § 203. This is also where severance pay would come into discussion, if applicable.