PRIMER ON CALIFORNIA WAGES, OVERTIME PAY AND EMPLOYEE BENEFIT LAWS
Your easy access guide to labor law as it applies to Employers and Employees is here for easy reference.
*Full and Part Time EmploymentHow many hours does an employee have to work to be full-time?
Part-time status is determined solely by the employer. Generally, most employers consider employees who work more than 32 hours per week to be full time employees. However, some employers consider all employees who work less than 40 hours a week to be part time.
Can an employee be forced to work 7 days a week?
The Fair Labor Standards Act (FLSA) does not limit the number of hours per day, or per week, that an adult employee can be required to work. However, if you initially agreed to work say 5 days a week, and your employer unilaterally decides to increase your work schedule to 7 days a week hoping you will quit, this may be deemed a termination and would entitle the employee to unemployment insurance benefits, and possibly damages for wrongful termination.
Do On Call employees have to be paid for the time spent waiting to work?
Generally, employees who are "On Call" must only be paid for the time when they are called in to work. The Fair Labor Standards Act requires the waiting time to be paid only if the employee must remain on, or so close to, the employer's premises that the employee could not use the time effectively for his or her own personal purposes.
To determine whether an employee must be paid for time spent On Call, the courts typically apply a seven factor test: (1) whether there was an on-premises living requirement; (2) whether there were excessive geographic restrictions on the employee's movements; (3) whether the frequency of calls was unduly restrictive; (4) whether a fixed time limit for response was unduly restrictive; (5) whether the On Call employee could easily trade On Call responsibilities; (6) whether use of a pager could ease restrictions; and (7) whether the employee had actually engaged in personal activities during the On Call time period.
Does an employer have to reimburse his or her employees for their mileage?
Pursuant to California Labor Code 2802, California employers are required to reimburse employees for all expenses incurred by the employee in performing their duties, including expenses for travel, dining, and mileage (other than to and from work/home). The employee cannot agree to waive this right to receive reimbursement.
In addition, the California Labor Commissioner has stated that any employer who reimburses its employees at less than the standard IRS mileage rate presently 56 cents per mile in 2014 (51 cents per mile for 2011, and 55.5 cents for 2012, 56.5 cents per mile for 2013) will have to prove that the employee's actual vehicle expense was in fact less than the standard IRS mileage rate, or be subject to liability for the difference.
*California Minimum Wage LawsAt present, the California Minimum Wage is $8.00. With few exceptions, California employers must pay their employees at least the $8.00 state minimum wage since it is higher than the federal minimum wage ($7.25 as of July 24, 2009), but in some cases a California employer must pay their employees a higher local living wage. A California employer must [ay the higher local living wage, if the city in which they operate, or provide services to, has enacted a local minimum wage ordinance.
Some employees who are exempt from the minimum wage law include: as outside salespersons, individuals who are the parent, spouse, or child of the employer, and apprentices regularly indentured under the State Division of Apprenticeship Standards. Minimum Wage Order (MW-2007). There is also an exception for learners, regardless of age, who may be paid not less than 85% of the minimum wage rounded to the nearest nickel during their first 160 hours of employment in occupations in which they have no previous similar or related experience.
Some California employers are required to pay more than the state minimum wage if they are subject to a "local living wage ordinance." These local living wage laws require California employers to pay a wage higher than the state's minimum wage, and they are spreading rapidly among local governments. For example, San Diego enacted a local living wage ordinance that requires employers providing services to the county to pay their workers at least $11.14 per hour plus $2.23 (July 1, 2011 - June 30, 2012). In San Francisco, the minimum wage ordinance requires employers to pay all employees who work in San Francisco more than two hours per week, including part-time and temporary workers at least $10.24 per hour. In the city of Santa Monica, employers in the city's "tourism zone" must pay their workers at least $13.54 per hour, and employers providing services to the City of Santa Monica must pay their workers $13.54 per hour (unless they fall within one of the exceptions). For more information, see Local Living Wage Ordinances May Apply To ALL Employees, Even If They Work Outside The City.
On September 12, 2013, the California legislature passed AB10 to increase California's minimum wage to not less than $10 an hour by January 1, 2016. Effective July 1, 2014, AB10 amends Labor Code Section 1182.12 to provide that California's minimum wage shall not be less than $9 per hour and effective January 1, 2016, the minimum wage shall not be less than $10 an hour.
Can an employee agree to work for less than the minimum wage?
In California, all employers are required to pay at least the state's required minimum wage and this cannot be waived by any agreement unless the employee falls into one of the four exceptions: (1) outside salespersons paid on commission; (2) apprentices regularly indentured under the State Division of Apprenticeship Standards; (3) learners, regardless of age (but only for up to 160 hours), and (4) individuals who are the parent, spouse, or child of the employer. Learners in occupations in which they have no previous similar or related experience must be paid at least $6.80 per hour.for the first 160 hours worked.
*California Overtime LawsFirst it must be stated that California's overtime pay laws apply not only to California employers, but also to out of state employers who send an employee into California, even on a temporary basis.
California's overtime pay laws require the payment of time and one half to non-exempt employees for: (1) each hour worked over eight in a single workday, (2) each hour worked over forty in a single workweek, and (3) the first eight hours worked on the seventh day of work in a particular workweek. California's overtime pay laws also require employers to pay employees double time for: (1) each hour worked over twelve in a single day and (2) each hour worked over eight on the seventh consecutive day of work in any given workweek.
Whether an employee is exempt from overtime pay, or non-exempt from overtime pay, often gets employers who either intentionally, or accidentally, misclassify their employees into serious trouble.
*California Law on Meal and Rest PeriodsIn California, the Labor Code provides that an employer must provide each employee with a 30 minute (minimum)uninterrupted off-duty meal period for every work period that exceeds 5 hours, but permits the employer and employee to agree to waive the meal period in writing if the workday is not more than six hours. Employers must also provide a second 30 minute (minimum) uninterrupted off-duty meal period if the workday will exceed ten hours, but again permits the employer and employee to agree to waive this second meal period if: (a) the total workday is not more than twelve hours and (b) the first meal period was not waived.
In addition to the required meal period(s), a California employer must also provide each employee with a 10-minute rest period ("break") for every 4 hours worked, or major fraction thereof which the California Supreme Court has defined as more than two (2) hours. California employers must therefore provide a 10-minute rest break to all nonexempt employees who work more than three and one -half (3 1/2 ) hours but less than six (6) hours in a day. Two 10-minute rest breaks are required for nonexempt employees who work more than six hours, but less than 10 hours in a day. Three 10-minute rest breaks are required for nonexempt employees who work 10 to 14 hours in a day. Employees who work less than 3 1/2 hours in a work day are not entitled to a rest break.
*California Laws on Pay Days and Pay PeriodsIn California, all non-exempt employees must be paid their wages at least twice a month on days designated in advance by the employer as "regular paydays". California Labor Code 207 requires the employer to establish a regular pay day and to post a notice that shows the day, time and location of payment. Pursuant to California Labor Code 204, wages earned between the 1st and 15th of any calendar month must be paid on or before the 26th day of the month; wages earned between the 16th and last day of the month must be paid on or before the 10th day of the following month
An employer may also opt to pay its non-exempt employees weekly, bi-weekly or semi-monthly so long as payment is made within seven days of the end of each pay period. If an employer is closed on a payday due to a recognized holiday, payment may be made on the next business day.
Employers may pay exempt employees (e.g. executive, administrative and professional employees) once a month on or before the 26th day of the month.
*Payday Upon Termination/*Payment of Final WagesCalifornia law requires employers to remit the payment of final wages, including all accrued vacation, within specific time periods and in a specific manner.
If the employee is fired, the employer must pay the employee's final wages and all accrued vacation time immediately at the time and place of termination. (See, Labor Code 201 and 227.3). However, if the employee is engaged in the production of motion pictures and the employee's employment was irregular and thus requires special computations to ascertain the amount due, the employer must remit payment of the final wage by the next regular payday. (See, Labor Code 201.5).
If the employee gives at least 72 hours' notice of his or her intention to quit, and quits on the day given in the notice, the employer must pay the employee's final wages and accrued vacation time at the time of quitting. (See, Labor Code 202). If the employee quits without giving 72 hours' notice, the employer must pay the employee's final wages within 72 hours of quitting. Payment should be made available at the place of employment, unless the employee requests that the final pay be mailed to a designated address. In such a case, the date of mailing will be considered the date of payment. (See, Labor Code 202 and 208).
If during employment, the employee authorized direct deposit of his or her wages to the employee's account, that authorization is immediately terminated when the employee is fired or quits. Employers must follow the rules above, unless the employee voluntarily authorizes that final deposit and then only if the employer makes the deposit within the required timeframe.
An employer who willfully fails to pay wages due within the required timeframe may be assessed a waiting time penalty of up to 30 days' pay for each calendar day the employee's wages remain unpaid. (See, Labor Code 203). The waiting time penalty is calculated by multiplying the daily wage rate by the number of calendar days up to 30. (See, Mamica v. Barca (1998) 68 Cal.App.4th 487.) An employee will not be awarded waiting time penalties if the employee avoids, or refuses, to receive payment of the wages due OR IF a good faith dispute exists concerning the amount of the wages due. Even if there is a dispute, the employer must pay, without requiring a release, whatever wages are due and not in dispute. If the employer fails to pay what is undisputed, the "good faith" defense will be defeated whatever the outcome of the disputed wages. (See, Labor Code Section 206).
*Payroll and Allowable Deductions in CaliforniaIn California, every employer must provide its employees with an itemized statement of wages. This itemized statement, which should appear on the pay stub, must state the following:
1. Employee's name and last four digits of the employee's social security number;
2. Employer's name and address;
3. Dates for which the employee is being paid;
4. Gross wages earned;
5. Net wages earned;
6. If the employee is non-exempt with hourly pay, then total hours worked;
7. Applicable hourly rate(s) and the number of hours worked by the employee at each rate (standard, time and a half, or double time); and
8. All deductions taken.
If an employer fails to provide the appropriate itemized wage statement, the employer may be fined $250.00 per employee for the first violation and $1,000 per employee for subsequent violations. However, the penalty for the first violation may be waived if the employer can show that the error occurred due to a clerical error, or inadvertent mistake.
California Labor Code Sections 221, 224 and 300 prohibit a California employer from deducting from an employee's wages any debts owed by the employee unless: (1) the law requires it (e.g. taxes, wage garnishment ordered by a court); or (2) the deduction was pre-authorized by the employee in writing and then only if the deduction relates to insurance premiums (e.g. health, life, etc.), hospital or medical dues, benefit plan contributions (e.g. 401K), or the deduction was a charge back on advanced unearned commissions.
*California Holiday and Vacation Pay LawsWhile this may come as a surprise to some, California law does NOT require the payment of Holiday Pay or Vacation Pay. However, if your employer does offer either they must comply with various state laws.
Hours worked on holidays, Saturdays, and Sundays are treated like hours worked on any other day of the week. In California, there is no law that requires an employer pay an employee a special premium for work performed on a holiday, Saturday, or Sunday. California employers are merely required to pay the overtime premium required for work performed in excess of eight hours in a day or 40 hours in a week.
Similarly, there is no California law that mandates a California employer to offer their employees either paid or unpaid vacation time. However, if an employer does have an established vacation policy, or provides an employee offer letter, or agreement, providing for a paid vacation, then California law does dictate how that employee may take or use the vacation time. California law treats earned vacation time as wages, and as such provides that vacation time is earned, or vests, as labor is performed. For example, if an employee is entitled to two weeks of vacation (10 work days) per year, after six months of work the employee will have earned five vacation days which cannot be forfeited, even upon termination of employment. Pursuant to California Labor Code Section 227.3, all earned and unused vacation must be paid to the employee on the employee's final day. Although earned vacation time cannot be forfeited, an employer can place a reasonable cap on the amount of vacation benefits that may accrue.
*Collecting Unpaid Wages, Overtime, and PenaltiesEmployees in California have several choices when considering how to collect unpaid wages, overtime compensation, penalties for missed meal periods and rest breaks, and a host of other Labor Code violations.
Option No. 1. Negotiation and Settlement
One of the most effective approaches is to negotiate directly with the employer. Informal negotiation is often the fastest way to settle an unpaid wage claim. Many employers, when properly advised of the law, the potential penalties they face, and the costs of defending a wage claim, will settle a wage claim.
Option No. 2. File a wage claim with the Labor Commissioner - Division of Labor Standards Enforcement
A wage complaint can be filed against a former employer for any unpaid wages or overtime due for work performed in the last three (3) years. If the employee's unpaid work goes back more than three (3) years, the employee cannot collect on that part of the claim. Cases that are filed with the Labor Commissioner are much less formal than a traditional lawsuit, and are often heard within 90 days.
Although we do not recommend employees do this on their own, you can file a wage claim with the Labor Commissioner by completing a wage claim form (.pdf) and filing it with the Division of Labor Standards Enforcement (DLSE) at the office nearest the employee's place of employment. A list of the local offices is located here. After your claim is completed and filed with the DLSE, it will be assigned to a Deputy Labor Commissioner who will determine, based upon the information presented in your claim, if your case should proceed or be dismissed. If the Labor Commissioner decides to proceed, the parties will be notified by mail of the date, time and place of the conference hearing. The purpose of the conference is to determine the validity of the claim, and to see if the claim can be resolved (settled) without a hearing. If the claim is not resolved at the conference, the matter will either be set for a hearing. At the hearing the parties will present their evidence and witnesses, just as they would in a regular court. After the hearing, the Labor Commissioner will issue an Order, Decision, or Award (ODA) which it will serve on all parties. Either party may appeal the decision to a civil court, but the decision is binding if not appealed. If the employer appeals the Labor Commissioner's decision, the DLSE will represent any employee who is financially unable to afford counsel in a civil court proceeding.
Option No. 3. Filing a claim in Superior Court
An employee can file a lawsuit for back owed wages, penalties, and other Labor Code violations in Superior Court. In some cases, filing a lawsuit in Superior Court may be the better course of action as there are certain penalties that are available in a regular court that cannot be recovered in a case heard by the Labor Commissioner.
Option No. 4. Filing A Class Action Lawsuit On Behalf of All Employees
When an employer has a large number of employees and has committed multiple wage and hour violations, a class action lawsuit may result in significant damages.