4 Tips to Prepare for a Labor Commissioner Hearing

California employees can bring their wage and hour claims before the state's Division of Labor Standards Enforcement (DLSE). And a deputy labor commissioner will hold an administrative hearing to decide whether an employee is owed compensation. Here are some best practices for employers to keep in mind as they prepare for a hearing.

1. Understand the Process

The DLSE enforces California's labor laws and wage orders. Under the state labor code, the labor commissioner (who leads the DLSE) and deputies have "free access to all places of labor." They have the authority to investigate employee complaints and to hold hearings "in any action to recover wages, penalties and other demands for compensation."

In fiscal year 2015–2016, the division's Bureau of Field Enforcement conducted 2,424 inspections and issued citations for 2,072 violations, according to an agency report. The most common employer violations were the failure to carry workers' compensation insurance and to give employees itemized wage statements.

[SHRM members-only how-to guide: How to Calculate Daily and Weekly Overtime in California]

When a worker files a wage claim with the labor commissioner, an employer will get a letter from the DLSE. The claim process generally happens in two rounds, explained Christopher Olmsted, an attorney with Ogletree Deakins in San Diego. First, the employer will receive a notice of conference with instructions to appear at a certain date and time.

This is a preliminary meeting to discuss the basis for the charge, he noted. The employee will have the opportunity to discuss what is written in the claim form and the employer will be able to present its side.

Employers should be sure to show up for the conference, said Jeanine DeBacker, an attorney with McPharlin Sprinkles & Thomas, in San Jose. "If the employer cannot or does not appear, the deputy labor commissioner may discuss the matter with the claimant," she explained at the California State Council of the Society for Human Resource Management's 2018 California State Legislative & HR Conference. If the employee has sufficiently established a case, the matter will proceed to the more formal hearing.

If the employee doesn't show up, the claim will be dismissed unless the employee has a good reason for missing the meeting.

During the conference, the deputy labor commissioner may amend the complaint or dismiss it if there isn't a valid claim—but that rarely happens, Olmsted said. The commissioner usually finds enough evidence to move to a hearing, and then time during the conference is devoted to settlement discussions.

Employers should be prepared to settle and should have the employee sign a settlement agreement with a release of claims.

Next, if the matter isn't settled, a more formal hearing will be scheduled, and the employer will the receive a Notice of Hearing. The hearing will be recorded and any witnesses will testify under oath.

2. Be Prepared

Employers should understand the claim and gather any supporting documents such as payroll records, handbook policies, performance documents and disciplinary actions.

Prior to the conference, the employer should assess whether the business is likely to be found liable, Olmsted said. If so, the employer may want to quickly settle the claim. For example, it's an obvious violation if an employee was fired and didn't receive a final paycheck on the last day of work. "If it's clear that you will lose the claim, you might as well settle up rather then come back and face certain doom," he said.

But the cases aren't always that clear. There may be some uncertainty as to what happened, he said. In most cases, it's a question of how convincing the employer's evidence is.

If the matter does go to a hearing, the employer should consider bringing witnesses that are not the owner or principal of the company, he added. Co-workers are often more compelling witnesses because they likely don't have a vested interest in the case and therefore may have a higher level of credibility.

For the hearing, DeBacker suggests preparing at least four binders with copies of any evidence. Give copies to the employee, the deputy labor commissioner and witnesses, and keep one for reference. The binders should have tabs so everyone can easily flip through them to find the relevant information.

Employers should be prepared to explain what the documents are and how they were maintained in the company's business records, Olmsted noted.

3. Have a Strategy

The parties don't have to bring a lawyer to the hearing, but employers may want to weigh the costs and benefits of having representation. The size of the claim will likely affect the decision.

Either way, employers should have a strategy and should stay on point, Olmsted said.

When calling witnesses, make it obvious why their testimony is relevant. For instance, an employer may note that it's calling a supervisor who had first-hand knowledge of the hours the employee worked. "Set the stage," Olmsted said. "Why is this person talking and what is the relevance?"

The employer will have the opportunity to ask the worker questions. It's best to focus on any documents the employee signed or acknowledged that may refute the employee's claim. For example, if employees claim they didn't know about a policy, it is helpful to show their signed acknowledgment of the policy, Olmsted said.

Employers should also spend time with their own witnesses. "It's not your role to tell them what to say, but make sure they are prepared and understand what will be expected of them," he added.

Though it's optional, employers may want to make a closing statement to summarize the claims, and any evidence that refutes the claims. This should be about a five-minute presentation, he suggested.

4. Be Professional 

A little courtesy can go a long way. Employers should be nice to the worker and everyone at the labor commissioner's office. Importantly, employers should never retaliate against an employee who files a claim, DeBacker said. That could lead to more violations of federal and state employment laws.