What You Need to Know About Wage & Hour Laws in California
Knowing how much an employer should pay an employee can get comfortable. Similarly, employers may need to follow strict labor requirements when starting a company. Here’s everything to know about California wage and hour laws.
Wage and hour laws set standards for pay and the time an employee is working, including minimum wage, tips, overtime, and other laws relating to money and labor.
Minimum Wage Laws in California
Effective January 1, 2022, California’s minimum wage for employees at a 26 or more person business is $15 per hour and $14 per hour for smaller businesses with 25 or fewer employees.
However, some employees are exempt from minimum wages, such as:
- Outside salespersons
- Parent, spouse, or child of the employer
- Indentured apprentices
Under the Minimum Wage Order (MW-2022), during the first 160 hours of employment, trainees cannot be paid any less than 85% of the minimum wage. The Division of Labor Standards
Enforcement in California (DLSI) may allow employees to earn less than the legal minimum wage if the employee:
Has a mental or physical disability
Nonprofit organizations (ex. Rehabilitation facilities)
Employees in California who get tips should receive the full minimum wage. However, this law does not apply for all tipped employees across the nation. Under the Fair Labor Standards Act, tipped employees may be allowed to earn less than minimum wage and expected to make up the rest of the money through tips. Employees in California who get tips should receive the full minimum wage. However, this law does not apply to all tipped employees across the nation.
Overtime Laws in California
The following employees may not work more than eight hours during a workday or more than 40 hours in a workweek unless they receive overtime pay:
Nonexempt employee 18 years or older
Minor employee 16 or 17 years (not attending school)
If an employee is working beyond eight hours or for more than six days in a week, the employee should receive compensation:
One and one-half times the regular rate of pay for all excess hours worked (more than eight hours and up to 12 hours)
Double the employee’s regular rate of pay for more than 12 hours of extra work.
Related: California Furlough Laws: Explained
Exemptions to Overtime Law in California
For some employees in certain professions, overtime pay does not apply. The general overtime law may also be different for different employees. The exemptions may differ based on the order and affected employees. One can find a full list here.
Lunch and Rest Breaks in California
Under Labor Code Section 512, California employees may receive a 30-minute unpaid break after five hours. However, if one can complete the workday within six hours, the employer and employee can consent to remove the meal break. An employee must receive another break if they work more than 10 hours.
For every four hours, employees receive a paid ten-minute rest period. However, for employees who work less than three and a half hours, employers are not required to offer rest.
Under Industrial Welfare Commission (IWC) Orders, unless employees do not have to work during the meal period, the meal is considered “on duty,” and calculated into the paid work hours. Employers and employees must consent to “on duty” meal periods if the work prevents the employee from being fully relieved. For instance, one worker at a coffee shop is a relevant example.
The 30-minute lunch period must be uninterrupted, and employers should not impede or discourage employees from eating or taking a break.
Filing Wage Claims in California
For employees who do not receive the correct wages or benefits, one may file wage claims with the Labor Commissioner’s Office.
One may file their wage claims here, including instructions found here. One may also file a claim may also be filed by email, mail, or in person.
File the wage claim promptly and by the following deadlines:
- One year for penalties of a bounced check or failing to provide personnel records
- Two years for a verbal promise to pay more than minimum wage
- Three years for violations of minimum wage, overtime, unpaid breaks, sick leave, illegal deductions
- Four years for written contract violations
Steps to Filing a Wage Claim in California
1. File the Claim
Fill out the form either online, in-person, by email, or by mail. One may file a wage claim for numerous reasons, including unpaid wages and benefits, basic labor rights, or misclassification of an employee as an independent contractor.
Along with the initial form (DLSE Form 1 – Initial Report or Claim), the plaintiff should fill out the following documents if the circumstance applies:
- DLSE Form 55 (work hours are irregular, unpaid wages, rest period violations)
- DLSE Form 155 (commission pay violation)
- DLSE “Vacation Pay Schedule” (vacation wages)
Further, copies of the following information may support the claim:
- Time records
- Paychecks and pay stubs
- Dishonored paychecks
- Notice of employment
2. Labor Commissioner investigation
After one files the claim, the Labor Commissioner’s Office (LCO) will investigate and talk with the employee and employer to attempt to resolve the issues. If the parties do not resolve their issues, a judge will decide for them in a trial.
However, independent contractors are not under protection from the LCO. Misclassification of a worker as an independent contractor may also warrant a wage claim.
Within 30 days of the complaint, a deputy with notify the employer and employee to either:
- Attend a conference
- Attend a hearing
- Dismiss the claim
The goal of a conference is to informally resolve any issues without a hearing. Supporting documents for either party should be brought and those already submitted. If the employer fails to show up, the claim will proceed to a hearing. Without good cause, the absence of the plaintiff will result in the dismissal of the case.
A hearing is a formal proceeding where each party may be represented by an attorney, present evidence, testify, and proceed in steps similar to a normal court proceeding.
Related: California Employment Discrimination FAQs
Hour Laws in California
California defines hours worked in California as an hour an employee performing work for the organization or an employer’s knowledge of performed work.
Work time is computed by rounding to the nearest five minutes or a quarter of an hour.
Reporting-time pay, where a non-exempt employee receives pay for some hours of unworked but scheduled times and the actual working hours. For reporting-time pay, the following applies:
- Each day an employee should go to work but is not given work should be paid half the usual rate of pay
- An employee required to report to work for the second time in one workday should be paid for two hours at the regular rate
Non-exempt employees do not necessarily get paid by an employer for being on-call. However, determining whether such time is compensable includes factors such as:
- A fixed time limit for response is restrictive
- Whether the on-call employee can trade responsibilities with another employee
- To what extent does the employee engage in personal activities
Travel time is considered work time and compensable if an employee cannot use their own transportation for non-commuting purposes. Business trips and time spent involved in each travel step are considered compensable.
California Wage & Hour FAQs
What is the difference between local, state, and federal minimum wage?
Almost all employers in California are required to follow federal and state minimum wage laws, and many local cities have also created higher rates for employees within their jurisdiction. In areas where minimum wage laws conflict, a higher minimum wage is adopted.
Are tips included in minimum wages?
No, employee tips cannot be added to minimum wage requirements.
Does age matter in the minimum wage?
No, adults and minors should all be paid the minimum wage.
Can employees volunteer to work for less than minimum wage?
Employers cannot waive minimum wages.
What is a wage claim?
A wage claim is a formal complaint lodged against the employer about unpaid wages, overtime, or other issues involving the employer and the employee.
What is a nonexempt worker?
If the Industrial Welfare Commission Order covers an employee, the employee is considered nonexempt.
What are the resources to understand employees’ rights?
One may find hard copies at any Office of the Labor Commissioner in California, but here is a list of resources for knowing your rights as a worker (in multiple languages) – including guides on recovering unpaid wages and labor violations.
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