|Scope—This article discusses key aspects of complying with California overtime payment laws. California’s overtime law is similar to federal law, but in some areas provides for greater benefits to employees and greater burdens to employers. This article does not cover wage-and-hour matters, including minimum wage or child and youth employment, or issues that arise in the context of paid and unpaid leave. Nor does it address wage-and-hour or leave laws established by California municipalities. |
This article provides an overview of the major ways in which California overtime laws are more generous to employees than the federal law, thereby imposing greater compliance obligations on employers. It assumes a basic understanding of the federal Fair Labor Standards Act (FLSA) and refers readers to relevant resources for additional information and comparison.
These matters are covered in the following sections:
- Comparison of California and federal overtime law.
- California overtime exemptions.
- California law on alternative workweeks.
- California overtime payment obligations.
In addition, the article covers employer obligations with respect to communications and record keeping, as well as enforcement of overtime payment laws.
California is known as being a leader in pro-employee labor laws.
Many large organizations and international corporations have hundreds, or thousands, of employees in California. Any business located in California must comply with California overtime payment laws. Organizations located in other states or countries—but with even one employee residing in California—must also be cognizant of California wage-and-hour laws regarding the payment of overtime. See, Attorney Counts Down Top 10 Ways to Violate California’s Wage-Hour Laws.
The role of HR with regard to California’s overtime payment laws is to meet the following broad objectives:
- To be cognizant of jurisdictional issues that will determine whether California law, federal law or the law of some other state will control on a particular issue.
- To thoroughly understand federal overtime law requirements.
- For California HR professionals to understand California law well enough to make decisions and take responsibility for them.
- For all HR professionals to understand the law well enough to know when to seek advice from California wage-and-hour experts.
- To effectively communicate California overtime pay requirements to management and employees.
HR’s role in California overtime pay compliance also involves six distinct functions:
- Correctly classifying workers as exempt, nonexempt, independent contractor, intern, full time or part time in accordance with California’s numerous wage orders.
- Understanding what “work” means and paying workers appropriately as salary, hourly, piece rate or flat rate.
- Correctly calculating the amount earned as regular rate, overtime and other compensation such as tips and commissions.
- Paying employees the proper amount of overtime due is, when it is due and in the manner it is due.
- Keeping complete and accurate timekeeping records as required by California law.
Overview of FLSA Overtime
Succinctly stated, the federal Fair Labor Standards Act (FLSA) requires payment of overtime to employees who work more than 40 hours in a single workweek, unless exempt. The FLSA also requires payment of a minimum wage. The precise legal and regulatory definitions of these words are key to compliance.
For foundational information about the FLSA, see:
A basic principle of the FLSA is that it does not override more generous state laws. When state employment protections are greater than what the FLSA provides, the state laws supersede federal law. In other words, employers should comply with the law (federal or state) that is the most generous to the employee on any particular wage-and-hour issue.
Comparison of California Law and Federal Overtime Law
Against the framework of the FLSA overtime law, HR professionals with employees in California must compare the California framework. Employers must then abide by the California law so long as it does not thwart the FLSA. Almost always, this means being more generous to the employees in California than is required under federal law. See, California Labor Code.
Multiplicity of laws and wage orders
Typically, a state has a single wage-and-hour overtime payment statute and a single wage-and-hour order or regulation implementing that statute. California has numerous laws and regulations and, currently, 17 wage orders applicable to different industries or occupations. A good starting point for understanding California overtime payment laws is the website of the state’s Industrial Welfare Commission (IWC).
The IWC divides its wage orders according to industries and occupations. The wage orders are:
- Manufacturing (PDF).
- Personal services (PDF).
- Canning, freezing and preserving (PDF).
- Professional, technical, clerical, mechanical and similar occupations (PDF).
- Public housekeeping (PDF).
- Laundry, linen supply, dry cleaning and dyeing (PDF).
- Mercantile (PDF).
- Handling products after harvest (PDF).
- Transportation (PDF).
- Amusement and recreation (PDF).
- Broadcasting (PDF).
- Motion picture (PDF).
- Preparing agricultural products for market on the farm (PDF).
- Agricultural occupations (PDF).
- Household occupations (PDF).
- Certain on-site occupations in construction, drilling, logging and mining industries (PDF).
- Miscellaneous employees (PDF).
The “industry” orders are numbers 1 through 3 and 5 through 13. The “occupation” orders are numbers 4, 14 through 17. Employers in California must determine where a particular employee falls within the regulatory scheme at the outset of any wage-and-hour analysis. If an employer is covered by an industry order, then the industry order takes precedence over an occupation order. See, Industrial Welfare Commission (IWC) and Which IWC Order? (PDF).
Key areas of difference
Several important terms come up in wage-and-hour issues. The significance of statutes and regulations is usually driven by the definitions of the words used, so understanding the definitions under all applicable laws is essential. Do not assume that words used in the statutes, regulations and wage orders mean the same as in common usage. Typically, definitions are set out near the beginning of the statute or regulation and apply consistently throughout.
California law regarding wages and the payment of overtime is found generally at California Labor Code §200-243 and §1171-1206. California administrative regulations can be found at 8 California Code Reg. §11000 et. seq. as well as in the wage orders listed above. The IWC occasionally releases interpretative bulletins that address specific fact situations. The wage orders are presumed by the California courts to be reasonable and lawful until a party demonstrates otherwise. The interpretative bulletins constitute mere opinions rather than substantive law. Nevertheless, they will be given serious weight by the California courts. See, Harris Feeding Co. v. Department of Industrial Relations, 224 Cal. App. 3d 464, 273 Cal. Rptr. 598 (5th Dist. 1990).
There is a hierarchy of issues to address whenever considering a wage-and-hour issue in California:
- Does federal law preempt California law on the point?
- Is the position exempt under both federal and California law?
- Do any federal or state exemptions apply to the particular industry or occupation?
- Were hours worked authorized and recorded (keeping in mind that merely suffering the employee working can constitute authorization)?
- Was the failure to pay overtime willful or a good faith mistake?
Employer. The foundational concept of “employer” is defined differently under California law than under federal law—at least under one of the IWC Orders. There is no single definition of employer as of this writing that can be reliably applied under all IWC Orders. As stated in the California Supreme Court case Martinez v. Combs, 49 Cal. 4th 35 (2010): “An examination of the wage orders’ language, history and place in the context of California wage law, moreover, makes clear that those orders do not incorporate the federal definition of employment.”1
The California concept of employer differs from FLSA law because the California concept preceded the FLSA. The California Supreme Court stated in this case:
As we have explained, the IWC has used the phrase “suffer or permit” in wage orders to define the employment relation since 1916, borrowing the phrase from the common, well-understood wording of contemporary child labor laws. . . . Not until 1938 did Congress enact the FLSA, defining the term “employ” with similar language . . . and not until 1961 did the United States Supreme Court engraft onto the language of the FLSA the nonstatutory “economic reality” test for employment.2
As is customary with judicial opinions, the California Supreme Court did not go on to delineate all differences in the definitions that may exist but confined itself to the facts of the case before it under Wage Order 14 (PDF). In 16 other wage orders in California, the definition of such a basic concept as employer could depend on the particular industry or occupation at issue.
Accordingly, California employers must take note that even something as basic as the definition of employer is probably broader under California law as it compares to the FLSA. California employers should pay particular attention to the wage order(s) that cover their industry and the occupation(s) at issue. California employers should retain qualified California employment law attorneys to address many issues that may seem simple under the FLSA.
Employers who try to circumvent California’s complex wageovertime payment laws by merely designating workers as independent contractors take a significant risk. Identifying the No.1 way to violate California wage-and-hour law, Jennifer Shaw, an attorney in Sacramento, said, “Very few people are actually considered to be independent contractors.”3 See, Attorney Counts Down Top 10 Ways to Violate California’s Wage-Hour Laws.
Exempt and nonexempt. These are key terms under California law, just as they are under the FLSA.
Under federal law, several categories of workers are generally exempt from the wage-and-hour laws:
- Certain professionals.
- Outside salespersons.
- Employees of amusement or recreational establishments.
- Farmers and fishers.
- Newspaper workers.
- News announcers.
- Delivery drivers and taxi drivers.
- Motion picture theater employees.
- Persons performing services in foreign countries.
All other workers are therefore protected both by federal law and by state law such as California’s multiplicity of wage orders.
Exempt workers are paid to get the job done, not to work a set number of hours. Employers should not treat exempt workers like hourly employees—intensively monitoring and recording their comings and goings and checking whether they are working. Salaried positions are supposed to relieve employers from this hassle. Salaried positions are not supposed to provide a mechanism to evade overtime laws while still treating salaried employees as though they are nonexempt in terms of closely monitored working conditions. See, FLSA: Exemption Test Questionnaire.
California covers the same general areas of exemption as does the FLSA, but divides the areas somewhat differently and places additional requirements on some of the exemptions. See, Exceptions To The General Overtime Law.
In California, white-collar exemptions (executive, administrative and professional) have both salary and duty criteria that are different from those under the FLSA. The salary component is tied to California’s minimum wage, so whenever the minimum wage goes up, employers must verify that employees classified as exempt are still exempt. California exemptions are discussed in greater detail in “California Overtime Exemptions” below.
Workweek and workday. Key to the FLSA is the definition of a workweek. However, California overtime law also depends on the definition of a workday. A workday is a consecutive 24-hour period that is consistent throughout the year. If the employer fails to define its own workweek, the California Labor Commissioner will use the default of Sunday through Saturday, with the workday lasting from 12:01 a.m. to midnight. Under certain circumstances, California allows employers to establish a workweek different from the typical workweek of five eight-hour days of work. See, DLSE—Glossary and Summary of Interim Wage Order—2000.
Work. The definition of work is another area where California law diverges from law under the FLSA and the law of most states. What constitutes work is a very fact-specific determination. It is not always clear under the FLSA what is and is not work. This determination becomes even more complicated when one must consider whether a California definition of work trumps the federal definition of work in a particular context.
California law on working hours is contained in Labor Code §500-558 and §1171-1206, as well as in the many wage orders described above. The definitions of work and working hours interact with the provisions regarding payment of minimum wages and overtime wages. California regulations regarding working hours can be found at 8 Cal. Code Reg. §11000 et. seq.
Unless otherwise expressly agreed to by parties to a contract, eight hours of labor constitutes a day of work. In California it is the level of the employer’s control over employees that is critical, rather than the mere fact that the employer requires the employee to perform certain activities. See, Morillion v. Royal Packing Co., 22 Cal. 4th 575, 94 Cal. Rptr. 2d 3, 995 P.2d 139 (2000).
As just one example of the Byzantine nature of the law in this area, the rules of donning, doffing, commuting, showing up and being on-call are very complex under FLSA law.
The rules become even more complex under California law.
Consider for example the narrow question of whether, under the FLSA, putting on a uniform or protective clothing or washing hands to be prepared to do work constitutes work. Section 3(o) of the FLSA provides that time spent “changing clothes or washing at the beginning or end of each workday” is excluded from compensable time under the FLSA if the time is excluded from compensable time pursuant to “the express terms or by custom or practice” under a collective bargaining agreement.4 In 2010 the Wage and Hour Division (WHD) of the U.S. Department of Labor issued a multipage interpretation of this single definition in the FLSA. See, Administrator’s Interpretation No. 2010-2.
The WHD’s interpretation included the following: “Since 2002, courts have aptly noted the vastly divergent definitions of ‘clothes’ that appear in a single dictionary, in different editions of a dictionary, and in different publishers’ dictionaries.”5 The WHD Administrator concluded that “clothes changing covered by § 203(o) may be a principal activity” for which compensation is owed as “work.”6 Thus, compliance with the FLSA is a very fact-specific process that involves applying words in ways that are not apparent from reading whatever dictionary is on the shelf, but requires an understanding of legislative history and judicial precedent in the particular jurisdiction.
Definitions of work become even more complex under California law, where the definition is dependent in part on California’s many fact-specific wage orders. In 1994 the California Division of Labor Standards Enforcement (DLSE) issued an opinion letter (PDF) addressing two narrow questions of what constitutes work under California wage-and-hour law. The opinion letter compared and contrasted the definition of hours worked between the FLSA and California. (Keep in mind that “hours worked” is just one of many operative terms in the federal and California wage-and-hour laws.) The letter pointed out that the FLSA contains no definition of hours worked and that the Department of Labor relies on definitions first set out in a Supreme Court opinion of 1944 that was expanded in a 1946 Supreme Court opinion. Later the U.S. Department of Labor attempted to clarify the FLSA definition by saying in 29 C.F.R. §778.223 that “[a]s a general rule the term ‘hours worked’ will include: (a) All time during which an employee is required to be on duty or to be on the employer’s premises or at a prescribed workplace and (b) all time during which an employee is suffered or permitted to work whether or not he is required to do so.”7
The DLSE opinion stated the definition used by the California Industrial Welfare Commission: “‘Hours worked’ means the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”8 The DLSE then concluded, “There is a substantial difference between the definition of hours worked adopted by the IWC and that used by the Department of Labor for enforcement of the FLSA. Under California law it is only necessary that the worker be subject to the ‘control of the employer’ in order to be entitled to compensation.”9
For example, if a California employer provides the employee with a company car, travel time is not compensable, nor is time spent performing small tasks like refueling the car. On the other hand, travel time is compensable if the employee is subject to the control of the organization during the travel. But nonexempt employees may be paid at a rate lower than their regular rate of pay, down to the minimum wage. See, Attorney Counts Down Top 10 Ways to Violate California’s Wage-Hour Laws.
Comp time and makeup time. California allows for comp time or makeup time in situations in which the FLSA does not. See, for example, Labor Code §513.
Compare that law to U.S. DOL regulations on time off under the FLSA. See, “FLSA compensatory time” and “FLSA compensatory time off”.
For a brief discussion of these circumstances, see, Managing Workplace Flexibility in California. [Supply hyperlink when available.]
Interns. California also has Opinion Letter dated April 7, 2010, on the conditions under which the DLSE deems an intern not entitled to wages and therefore, ultimately exempt from the states overtime pay requirements. California’s position is very similar to the U.S. DOL’s position under the FLSA, despite having fewer discrete points to consider. See, Fact Sheet #71: Internship Programs Under The Fair Labor Standards Act.
Salary. Salary is a key concept under both the FLSA and California law. To be deemed a salaried employee, the worker must receive two times the California minimum wage, and this amount may not be reduced for poor performance or lack of productivity. See, Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions Under the Fair Labor Standards Act (FLSA).
Minimum wage. There is also the definition of minimum wage to consider. Although there are some exceptions, almost all employees in California must be paid the higher minimum wage as required by state law. Effective January 1, 2008, the minimum wage in California is $8.00 per hour. There is an exception for learners, regardless of age, who may be paid not less than 85 percent 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. There is also an exception for sheepherders. These two exceptions illustrate the importance of placing each individual employee in California in the right category at the outset of any wage-and-hour analysis. For federal resources on this topic, see, Minimum Wage, as well as the other SHRM toolkits referenced at the beginning of this article.
Tips. In California, tips left on the table or on a credit card charge are deemed property of the employee; the employer is obligated to turn that money over to the employee. An employer can impose a mandatory tip pool among restaurant employees, but a supervisor who acts as the agent of the employer cannot share in those tips. Employers may not use an employee’s tips as a credit toward the employer’s obligations to pay minimum wage. See, Tips and gratuities and Court Orders $105 Million Tip Be Paid to Starbucks Baristas.
For federal resources on this topic, see, Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (PDF) as well as other toolkits referenced at the beginning of this article.
California Overtime Exemptions
As with the FLSA, California recognizes several exemptions from overtime requirements. The exemptions are similar to, but not identical with, their federal counterparts. See, IWC Wage Order 4-2001.
A California employee qualifies for the executive exemption if the employee:
- Primarily manages the business.
- Regularly exercises discretion and independent judgment.
- Regularly directs the work of two or more employees.
- Has the authority to hire/fire and advance/promote employees.
- Earns a monthly salary equal to at least two times the state minimum wage for full time-employment (i.e., 40 hours/week).
The job description of project manager is one that an employer may be tempted to deem exempt, but it may not be under this test.
The administrative exemption is the one that most often snags employers both under the FLSA and California law. Employees claimed exempt under the administrative exemption are usually female employees—a reason to be especially cautious about deeming a particular position eligible for the administrative exemption. Case law is replete with employers unsuccessfully claiming the administrative exemption for secretaries, file clerks, bookkeepers, paralegals and project managers. A California employee qualifies for the administrative exemption if the employee:
- Primarily performs nonmanual work directly related to the general business operations of the organization.
- Regularly exercises discretion and independent judgment.
- Has obtained special training, experience or knowledge.
- Earns a monthly salary equal to two times the California minimum wage for full-time employment.
A California employee qualifies for the professional exemption if the employee:
- Has a license or certification by the state of California.
- Works primarily in the practice of law, medicine, dentistry, optometry, architecture, engineering, teaching or accounting.
- Has advanced knowledge typically acquired by a course of specialized study/apprenticeship.
- Regularly exercises discretion and independent judgment.
- Earns a monthly salary equal to at least two times the state minimum wage for full-time employment.
Computer software occupations exemption
Federal law handles the overtime exemption for computer workers through regulations as a subset of the professional exemption. A California employee qualifies for the computer software exemption if the employee primarily applies systems analysis or designs, develops, documents, analyzes, creates, tests or modifies computer systems or programs.
Note that this exemption leans toward computer software as opposed to computer hardware, although software can be hard-wired into hardware. Note also that this exemption may not apply to project managers, and the federal exemption may actually be narrower than the California exemption in some respects. The California Division of Labor Statistics and Research is required to adjust both the hourly pay rate and the salary level described in this paragraph on October 1 of each year to be effective on January 1 of the following year by an amount equal to the percentage increase in the California Consumer Price Index for Urban Wage Earners and Clerical Workers (PDF).
Outside sales exemption
Federal law has an overtime exemption for outside sales (PDF). The key term here is “outside,” which may not include an established home office because the home office may be deemed part of the employer’s place of business. The gist of the exemption is the employee making sales “on the road.” A California employee qualifies for the outside sales exemption if the employee is:
- Primarily engaged in sales.
- Spends more than 50 percent of working time away from the employer’s place of business.
- Sells tangible or intangible products.
This exemption correlates to the “hunter” model of sales, in which extensive time may be expended traveling and bringing back a few “big kills.” See, Designing Compensation Systems for Sales Professionals.
Commissioned salespersons exemption
Federal law has an exemption for commissioned sales persons, as does California. A California employee qualifies for the commissioned salesperson exemption if the employee:
- Is primarily engaged in sales.
- Has earnings exceeding 1.5 times the California minimum wage.
- Has more than 50 percent of his or her earnings representing commissions.
- Is covered by wage orders 4 or 7.
- Spends more than 50% of working time away from the employer’s place of business.
This exemption correlates to the “farmer” model of sales, in which sales are achieved by staying on the “farm” and tending to the “crops.” See, Designing Compensation Systems for Sales Professionals and Recruiter Qualified Under Calif. Commissioned Salesperson Exemption, Not Entitled to Overtime.
California Law on Alternative Workweeks
A fundamental principle of FLSA overtime law is that each workweek must stand on its own. (Exceptions exist for police, firefighters, hospital and nursing home employees.) Under the FLSA a workweek is generally defined as seven consecutive 24-hour days. Typically, employers require their employees to work five consecutive days of eight hours each (with meal breaks). See, Workweek.
However, some industries require 24/7 manufacturing or customer service. Also, some employees desire greater flexibility than provided by this model. Again, California has been a leader in developing laws to address both sets of needs.
To satisfy the needs of recruits and employees while still keeping labor costs at a reasonable and predictable level—and thereby remain competitive—California employers have availed themselves of California Labor Code §511, which allows them to define alternative workweeks and workdays under certain conditions. An employer is allowed to change its defined workweek or workday if the change is intended (at the time) to be permanent. It is not necessary for all classes of employees to have the same workweek or workday. However, employees on public works and those in agricultural occupations subject to IWC Order 14 (PDF) are not eligible for alternative workweeks. Certain employers with collective bargaining agreements are not subject to the California regulations concerning alternative workweeks.
Alternative workweeks and workdays provide an opportunity for employers to fine-tune their defined work schedules. Alternative work schedules should be grounded primarily in the needs of the job being done and in the desires of the workers; the opportunity to avoid paying overtime should not be the goal, but rather a possible ancillary benefit to the employer.
Generally, overtime is based on an employee working more than eight hours in a 24-hour period (or in excess of an established alternative workweek). It is possible under a properly established alternative workweek for an employee to work more than eight hours a day and still be compensated—without overtime—at the regular rate of pay for the extra hours.
Several rules apply to a legitimate alternative workweek program under California law:
- The alternative workweek may not require more than 10 hours of work per day.
- The alternative workweek may not require more than 40 hours of work in a workweek.
- Overtime between 10 and 12 hours worked above the alternative workweek must be paid at 1.5 times the regular rate of pay.
- Overtime beyond 12 hours above the alternative workweek must be paid at 2 times the regular rate of pay.
- Certain health care workers are subject to different rules for alternative workweeks.
- An employer cannot reduce an employee’s regular rate of pay as the result of employees’ establishing or rejecting an alternative workweek program.
- Before implementing an alternative workweek, an employer must meet specific requirements of proposing it to the employee group, explaining the effects of the alternative workweek schedule and conducting a secret vote. If the implementation is not handled correctly, the employer may be drawn into complex and unanticipated legal proceedings and ultimately held liable for overtime under a completely different workweek calculation.
Employers should proceed with caution in implementing alternative workweeks. For a detailed discussion of how to accomplish this process in a legally compliant manner, see, Managing Workplace Flexibility in California. [Insert hyperlink when available.]
Wage Payment Obligations
Overtime wages must be paid no later than the payday for the next regular payroll period following the payroll period in which the overtime wages were earned. An employer is in compliance with Labor Code §226(a) relating to total hours worked by the employee if the overtime hours are recorded as a correction on the itemized statement for the next regular pay period and the statement includes the dates of the pay period for which the correction is being made. See, Labor Code §204(b)(2).
An employee who is discharged must be paid all wages, including overtime, immediately at the time of termination. See, Labor Code §201 and §227.3 and Paydays, pay periods, and final wages.
California law also mandates a pay stub with payment of wages that contains certain information. See, Pay stub for an employee paid on an hourly wage (PDF).
California Record Keeping Requirements
California law requires employers to keep accurate wage-and-hour records as follows:
- Detailing when nonexempt employees begin and end each work period, meal period and split-shift intervals, with total hours worked each day. Relying on work schedules posted in advance is not sufficient; actual hours worked must be recorded. See, Calif. Decision Limits ‘Reporting-Time’ Pay and Clarifies ‘Split-Shift’ Premium.
- Recording names, addresses, occupation/job titles and Social Security numbers of all employees, plus the date of birth of employees who are minors.
- Recording applicable rate of pay, total hours worked in a pay period and total wages paid in each pay period.
- Maintaining required records at a central location within California or at the locations where employees work.
- Maintaining records as required by the federal Family and Medical Leave Act.
- Making records available for inspection by employees upon reasonable request.
See, Calif. Labor Code §1174.
Enforcement of California Overtime Laws
California’s counterpart to the U.S. Department of Labor is the Industrial Welfare Commission (IWC). California’s Industrial Welfare Commission wage orders (IWC Orders) are the counterpart to U.S. Department of Labor regulations. California has a powerful enforcement division, the Division of Labor Standards Enforcement (DLSE). Surprisingly, judicial opinions in this area are relatively scarce because most wage-and-hour disputes in California are resolved directly between the parties or through administrative proceedings before the California Labor Commissioner. As seen repeatedly above, California gives employees a lot of clout.
California has a multilayered scheme to enforce its wage and hour laws. The Private Attorneys General Act of 2004 empowers employees to act as private attorneys general on their own behalf and on behalf of other current and former employees to seek civil penalties for California Labor Code violations. A successful employee acting as a private attorney general receives 25 percent of the civil penalty awarded and collected, plus reasonable attorney fees and court costs. See, Labor Code §2698-2699.5, Private Attorneys General Act.
The DLSE has seven units charged with different aspects of enforcement:
- Wage Claim Adjudication. This unit holds informal conferences to resolve wage disputes and conducts administrative hearings if voluntary agreements cannot be reached.
- Bureau of Field Enforcement (BOFE). BOFE’s jurisdiction covers workers’ compensation insurance, child labor, cash pay, unlicensed contractors, IWC wage orders and group wage claims.
- Retaliation Complaint Unit. The unit investigates complaints of discriminatory retaliation on the basis of wage-and-hour and other Labor Code violations.
- Public Works Unit. The unit investigates and enforces application of prevailing wage rates for public works construction projects.
- Labor Enforcement Task Force (LETF). The LETF is a partnership of state and federal agencies that collaborate to target businesses engaging in the underground economy, historically abusing workers in garment manufacturing, janitorial, agriculture, car wash, construction, race track and restaurant industries.
- Licensing and Registration Unit. This unit issues licenses, registrations and/or certifications applicable to:
- Farm labor contractors.
- Talent agents.
- Organizations involved in door-to-door sales.
- Industrial homeworkers.
- Garment manufacturers.
- Studio teachers.
- Employees with a disability and sheltered workshop.
- Labor contractor licensees.
- Legal Unit. This area presents civil cases alleging violation of the California labor laws at both the trial and appellate levels.
Federal law and California law require employers to communicate legal rights to employees by means of posters and, in some instances, text in employee handbooks. Employers must post both federal and California current minimum wage requirements, the applicable California wage orders, in an area commonly frequented by employees to ensure that employees can easily read the postings during the workday. Copies of the required postings are available from the California Department of Industrial Relations (see, Industrial Welfare Commission wage orders). Posters and notices must be updated on a yearly basis. See, Workplace Postings and Attorney Counts Down Top 10 Ways to Violate California’s Wage-Hour Laws.
California Labor Code §2810.5 requires employers to give new employees, and in certain circumstances current employees, a particularized notice about their wages and other employment-related information. The wage notice requirement affects most of the more than 8 million California employees who are entitled to receive overtime. California’s Wage Theft Prevention Act (WTPA) (PDF) took effect January 1, 2012. The WTPA and accompanying regulations provide for, among other things:
- Which employees must receive a wage notice.
- What information the wage notice must contain.
- Timing of the notice.
- The level of detail required in the notice.
- A template that is approved for giving the notice in English (the California Labor Commissioner will provide template wage notices in Spanish, Chinese, Korean, Vietnamese and Tagalog as they are completed by the agency).
According to the California Labor Commissioner’s FAQs, the wage notice may be given electronically. To do so, there must be “a system where the worker can acknowledge the receipt of the notice and print out a copy of the notice.”10 The Labor Commissioner’s FAQs provide practical advice about how to address an employee who refuses to sign the wage notice. In such a case, the employer should note the employee’s refusal on the employer’s notice and provide a copy of that notice to the employee. The Labor Commissioner’s form notice states that “the employee’s signature on this notice merely constitutes acknowledgment of receipt.”11 This statement helps avoid creating a contractual obligation on the part of the employer. An employer that wishes to obtain an employee’s assent to a credit against the minimum wage must do so through a separate agreement with the employee. See, California’s New Wage Disclosure Notice and Wage Theft Prevention Act of 2011.
Templates and Tools
Agencies and organizations
Laws and regulations
1 Martinez v. Combs, 49 Cal.4th 35 (2010). Retrieved from http://caselaw.lp.findlaw.com/data2/californiastatecases/s121552.pdf
2 Martinez v. Combs, 49 Cal.4th 35 (2010). Retrieved from http://caselaw.lp.findlaw.com/data2/californiastatecases/s121552.pdf
3 Deschenaux, J. (2009). Attorney counts down top 10 ways to violate California’s wage-hour laws. Retrieved from http://www.shrm.org/LegalIssues/StateandLocalResources/Pages/CalWageHour.aspx
4 U.S. Department of Labor, Wage and Hour Division. (2010). Administrator’s interpretation No. 2010-2. Retrieved from http://www.dol.gov/WHD/opinion/adminIntrprtn/FLSA/2010/FLSAAI2010_2.htm
5 U.S. Department of Labor, Wage and Hour Division. (2010). Administrator’s interpretation No. 2010-2. Retrieved from http://www.dol.gov/WHD/opinion/adminIntrprtn/FLSA/2010/FLSAAI2010_2.htm
6 U.S. Department of Labor, Wage and Hour Division. (2010). Administrator’s interpretation No. 2010-2. Retrieved from http://www.dol.gov/WHD/opinion/adminIntrprtn/FLSA/2010/FLSAAI2010_2.htm
7 State of California, Department of Industrial Relations, Division of Labor Standards Enforcement. (1994, February 3). Letter regarding compensable time. Retrieved from http://www.dir.ca.gov/dlse/opinions/1994-02-03-3.pdf
8 State of California, Department of Industrial Relations, Division of Labor Standards Enforcement. (1994, February 3). Letter regarding compensable time. Retrieved from http://www.dir.ca.gov/dlse/opinions/1994-02-03-3.pdf
9 State of California, Department of Industrial Relations, Division of Labor Standards Enforcement. (1994, February 3). Letter regarding compensable time. Retrieved from http://www.dir.ca.gov/dlse/opinions/1994-02-03-3.pdf
10 California Department of Industrial Relations, Division of Labor Standards Enforcement. (2012). Frequently asked questions (FAQ): Wage Theft Protection Act of 2011—notice to employees. Retrieved from http://www.dir.ca.gov/dlse/FAQs-NoticeToEmployee.html
11 California Department of Industrial Relations, Division of Labor Standards Enforcement. Notice to employee: Labor code section 2810.5. (2012).Retrieved from http://www.dir.ca.gov/dlse/LC_2810.5_Notice.pdf
Acknowledgement— This article was prepared for SHRM Online by Gene R. Thornton, J.D., PHR. Mr. Thornton is a practicing employment law attorney and freelance writer based in Colorado Springs, Colo., and a regular contributor to SHRM Online content. He is the co-author of Employment Termination Source Book: A Collection of Practical Samples (SHRM). In addition to relying on his own professional expertise and research, the author has incorporated existing SHRM Online content in developing this treatment.
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