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California Wage and Hour Laws

Dolley Law has represented clients throughout the country, including California. California has a wide and varied network of rules and requirements on wage and hour issues such as overtime, minimum wages, misclassification, and wage payments. The attorneys with our Firm can help you better understand this network so that you are protecting your interests and achieving your goals. Call us today.

California Minimum Wage

The California Industrial Welfare Commission (“Commission”) issues several wage orders that address either specific wage and hour issues (e.g., minimum wage rates, meal breaks, rest breaks) or wage and hour issues in specific industries (e.g., manufacturing, personal services, etc.). See, e.g., Cal. Lab. Code §§ 516, 517, 1182.11, 1182.13, 1185; Order No. 17-2001; Order No. 5-2001; Order No. MW-2019. With respect to minimum wages, the Commission must review their adequacy at least once every two years. See Cal. Lab. Code § 1173.

In setting minimum wage rates, California’s minimum wage law distinguishes primarily between employers with 26 or more employees, and those with less than that number. See Cal. Lab. Code § 1182.12. For the former type of employer, the current minimum wage rate in California (as of January 1, 2020) is $13.00 per hour. Id. For the latter type of employer, the current minimum wage rate (as of January 1, 2020) is $12.00 per hour. Id. Like other state laws, California law provides that these rates are subject to increases each year in relation to increases in the Consumer Price Index, until they reach $15.00 per hour. Id. Payment of wages less than these rates is unlawful and may subject an employer to, among other things, statutory penalties. See Cal. Lab. Code §§ 1197, 1197.1.

Unlike many other states and the FLSA, California does not allow employers to claim a tip credit against the minimum wage of tipped employees. See Cal. Lab. Code § 351. California law provides, “[n]o employer…shall…require an employee to credit the amount, or any part thereof, of a gratuity against and as a part of the wages due the employee from the employer.” Id. In other words, the minimum wage rate for tipped employees is the same as the minimum wage rate for any other employees.

California Overtime

California has an overtime law with more stringent requirements than the overtime rules under the Fair Labor Standards Act (“FLSA”). See Cal. Lab. Code § 510. One of the greatest differences between California overtime law and the FLSA is the time frame by which overtime is determined: under the FLSA, overtime is determined based upon a 40-hour workweek, whereas, under California law, overtime is determined either based upon a 40-hour workweek or based upon the hours worked in a single day. Id.

In this regard, California law states: “[a]ny work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee.” Id.

In addition, unlike the FLSA, California overtime law mandates an even higher premium rate of pay—that is, twice the regular rate of pay—for any hours worked in excess of 12 hours in one day. Id. This higher premium rate of pay also applies to “any work in excess of eight hours on any seventh day of a workweek.” Id. Nonetheless, these special overtime rules do not apply to all employment arrangements, such as those involving “alternative workweek schedules” as that term is defined by California law. See id.; Cal. Lab. Code § 511.

In addition to civil actions by employees, violation(s) of California’s overtime laws may result in citations and the imposition of statutory penalties. See Cal. Lab. Code § 558. Individual liability of owners or other corporate officers for these violations can result, as well. See Cal. Lab. Code § 558.1.

Meal Breaks and Rest Breaks

California has laws and regulations specific to how and when employers must provide employees meal breaks and rest periods during the workday. See Cal. Lab. Code §§ 226.7, 512; Order No. 5-2001. In general, an employer may not employ an employee for a work period of more than 5 hours per day without providing the employee a meal period of 30 minutes or more. See Cal. Lab. Code § 512. However, if a work period is 6 hours or less, the employer and employee may, by mutual consent, waive the meal period. Id.

Further, California generally requires employers to provide employees with a second meal period of 30 minutes or more in any shift of more than 10 hours in a day. Id. However, if a work period is 12 hours or less and the first meal period was not waived, the employer and employee may, by mutual consent, waive the second meal period. Id. These meal break rules are subject to some exceptions as specified in the statute and are often elaborated on in more detail in wage orders specific to certain industries. Id.

California wage orders address the requirements for rest periods. See, e.g., Order No. 5-2001. In general, employers must authorize and permit non-exempt employees “to take rest periods, which insofar as practicable shall be in the middle of each work period.” Id. Rest periods must be paid. Id. The required length of rest periods depends upon the length of the shift or work period in question: “[t]he authorized rest period time shall be based on the total hours worked daily at the rate of ten (10) minutes net rest time per four (4) hours or major fraction thereof.” Id.

If an employer fails to provide an employee his or her meal break or rest break, “the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest or recovery period is not provided.” See Cal. Lab. Code § 226.7.

Misclassification

Under California law, it is unlawful for any person or employer to willfully misclassify an individual as an independent contractor. See Cal. Lab. Code § 226.8. Violations(s) of this law may have several consequences, including but not limited to steep statutory penalties and a requirement that the person or employer post notice of the violation(s). Id.

Potential Liabilities

California’s wage and hour laws on minimum and overtime wages may be enforced by the Commissioner or by employees who bring civil actions to recover such unpaid wages. See Cal. Lab. Code §§ 1193.6, 1194, 1195. If an employee brings a civil action to recover unpaid minimum or overtime wages and prevails, he or she is entitled to recover the unpaid wages, including interest thereon, along with reasonable attorney’s fees and costs. See Cal. Lab. Code § 1194.

The availability of liquidated damages in such an action depends on whether the employee seeks to recover unpaid minimum wages or overtime wages; if the employee recovers unpaid minimum wages, the employee is also entitled to recover liquidated damages in an amount equal to the wages unlawfully paid and interest thereon. See Cal. Lab. Code § 1194.2.

However, if the employer convinces the Court or Commissioner that the act or omission giving rise to the action was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of California wage and hour law, the court or Commissioner has discretion to refuse to award, or to reduce the award of, liquidated damages. Id.

Finally, California law provides that an employee may recover attorney’s fees and costs incurred in enforcing any court judgment for unpaid wages pursuant to California’s Labor Code. See Cal. Lab. Code § 1194.3.

The applicable statutes of limitations in California for wage and hour actions may depend on whether the damages sought constitute “wages” or “penalties.” See Murphy v. Kenneth Cole Prod., Inc., 155 P.3d 284, 289 (Cal. 2007); see also Cal. Civ. Proc. Code §§ 338(a), 340(a).

Wage Payment

Like most states, California has laws mandating the timely payment of wages to employees during their employment. See Cal. Lab. Code § 204. In general, wages are due and payable twice during each calendar month, on days designated in advance by the employer as the regular paydays. Id. However, California law does not prohibit employers from paying employees on more frequent intervals, like on a weekly basis. See Cal. Lab. Code §§ 204b, 219. California has additional wage payment rules specific to certain occupations and industries. See Cal. Lab. Code §§ 204.1 (vehicle dealers), 204.11 (cosmetologists), 205 (agricultural and domestic).

Failure to pay wages in accordance with these laws can result in statutory penalties. See Cal. Lab. Code §§ 210, 211. It can also result in a civil action by the employee; and if the employee prevails in such an action, the court must award the employee his or her reasonable attorney’s fees and costs if requested at the outset of the action, in addition to statutory interest. See Cal. Lab. Code §§ 218, 218.5, 218.6.

With regard to wage payments upon discharge of employment, California law generally provides, “[i]f an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.” See Cal. Lab. Code § 201. California also has other requirements about the payment of wages upon discharge that are specific to certain occupations or industries. See, e.g., Cal. Lab. Code §§ 201.3 (temporary services), 201.5 (motion pictures), 201.6 (print shoots), 201.7 (oil drilling), 201.8 (events); 201.9 (concerts and theater).

California also has wage payment laws specific to employees who do not have employment contracts for specific terms and who quit their employment. See Cal. Lab. Code § 202. Such employees’ wages become due and payable not later than 72 hours, unless advance notice of 72 hours was provided by the employee, in which case the wages are due and payable at the time of quitting. Id.

Any employer who willfully fails to pay, without abatement or reduction, the wages owed upon discharge as required by these rules, may have to pay additional wages for up to 30 days as a penalty. See Cal. Lab. Code § 203; see also Cal. Lab. Code § 1197.2. Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise. Id.

In addition, California law contains stringent rules regarding judgments for unpaid wages that remain unsatisfied after 30 days, rules that require employers to either cease business or obtain and file bonds with the state. See Cal. Lab. Code § 238.

Contact Us

It is easy to get confused or overwhelmed by the many different wage and hour laws and wage orders in California. We have the sophisticated wage and hour knowledge and experience to help you navigate such complex networks of rules and requirements. If you are in or around Los Angeles, San Diego, San Jose, San Francisco, Fresno, Sacramento, Long Beach, Oakland, Bakersfield, or Anaheim, contact an attorney with our Firm today to see if we can provide you the legal guidance and representation that you need. We can be reached by telephone at (314) 645-4100 or by email at kevin@dolleylaw.com.