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ALL YOU NEED TO KNOW ABOUT WAGES IN CALIFORNIA |
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| The law related to wages is voluminous: | |||
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The laws are
"voluminous" because of the sheer number of
Federal and
State statutes, regulations, case law, administrative rules, and
wage orders regulating all matters related to anything that might be
considered a wage. "Wage law" not only deals with payment of wages, but also receipt of other benefits and payments. The "Labor Code" or wage law deals with: |
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| Hourly pay | Lunches | ||
| Salary | Pay periods | ||
| Overtime | Uniforms | ||
| Minimum wage | Expense reimbursements | ||
| Vacation | Travel | ||
| Commissions | Gifts | ||
| Bonuses | Waiting-time penalties | ||
| Breaks | Attorneys' fees and costs reimbursement | ||
| Exempt status | Administrative hearings versus filing a lawsuit | ||
| Of the various employment laws, wage claims are the least complex! | |||
| Despite the number of wage type issues that exist and how complex things must appear to the layperson, wage claims are fairly simple in many respects. This is because the concept of wages for work is something everyone deals with [assuming one has a job] and how things are supposed to be done can be understood by every worker, whether a senior manager or someone on the line. | |||
| As soon as someone is old enough to get a job, he or she is introduced to the concept of earning wages. At a job interview people typically ask how much the job pays, how many hours is one required to work per week, how long is the lunch period, when are paydays, is there vacation, what are the raise possibilities, any bonuses or commissions, and so on. | |||
| And at some point, assuming one has had more than a few employers, one learns of all the ways an employer can cut corners when paying wages, so to save labor costs. The employee learns what "working off the clock" means. He or she may experience what it is like to constantly be asked to work through lunch or breaks. On earning a big commission or bonus, many find out the different ways an employer will try to avoid paying the commission or bonus. | |||
| In California, the law favors employees and is quite draconian for employers. | |||
| California employers have paid BILLIONS in settlements to employees because of wage violations. [Note: most wage claim cases settle in favor of employees, whether before or during litigation.] Why does this happen? Are employers simply making innocent mistakes? Read on. | |||
| It's three things, not two, that are certain in life .... death, taxes and the fact that each day thousands of California employers negligently or intentionally do NOT pay all lawfully earned wages to employees. Violations range from something as insignificant as incorrect paycheck stubs to employer's almost criminal conduct of intentionally shortchanging or cheating employees on matters related to vacation, overtime, breaks, lunches, bonuses, or commission payments. | |||
| Why cheat employees out of earned wages? | |||
| In business the highest cost in running a company is "labor" or wage payments to employees. Greed, concentrating on the bottom line, and/or desperation motivate many employers to slash or save labor costs by cheating employees or "cutting corners" on wage payments, final pay, vacation, benefits, or time off [breaks, lunches]. | |||
| If the employer can make more money by gambling it will not get caught, or simply delay payment by cheating the employee out of wages in the short term, the employer will intentionally engage in illegal schemes to avoid paying lawfully earned wages. | |||
| If the dollar risks, including litigation, "pencil out" in terms of ultimate cost to the employer, many employer have no problem taking the risks associated with cheating employees out of wages. In other words, the employer does a cost/benefit analysis that includes calculating the dollar benefit of NOT paying wages against the ultimate cost in paying out monies via wage claims or lawsuits. If the employer does get caught, human nature or greed being what it is, many employers simply factor in the cost of lawsuits or ultimate liability when deciding whether or not to cheat employees out of earned wages. | |||
| For those of you who think this too pessimistic a view of the corporate mind, consider recent frauds like Enron and MCI WorldCom. Read about Ford Motor Company's calculated decision that it was more profitable to let people in a Ford product to die and pay lawsuit settlements rather than spend $11 to fix a dangerous and fatal condition in the Ford Pinto. Sound like we are making this up? See here, here and here. | |||
| The point of all this: If American businesses have calculated they make more money by letting people die, how difficult is it to cheat employees out of wages. | |||
| Let's look at commission or bonus payments as an example of all this. | |||
| Often times employers will trumpet great sounding bonus or commission plans that are in reality designed to make it difficult or impossible to earn the incentive. Many employers change the commission or bonus plan "midstream" and illegally apply the new terms retroactively. | |||
| Some employers engage in schemes that may look legitimate on the surface, but the employer's real motive is to avoid payment of the earned wage [e.g., fire an employee just before the date the commission is to be paid or improperly debit the employee's account for losses the employer suffered]. | |||
| Some employers even go so far as to cavalierly refuse to pay monies owed. Some simply withhold payment and tell the ex-employee and his lawyer to "go ahead and sue me." In this situation, the employer figures it can pay its lawyers to delay for years the full payment of wages owed. | |||
| Often times, there is no defense in the litigation, employers simply retain counsel to protest innocence for a few years and then everyone quietly settles on the courthouse steps or when "the marshal comes to collect on the judgment." Employers who engage in these tactics typically cheat everyone they do business with and even the IRS. A look at court records usually shows the employer having a long list of lawsuits against it. | |||
| An employer's perception of your standing in society may influence decisions on how much money the employer thinks you should make. If you unexpectedly earn a very large commission or bonus that is in excess of what the employer thinks "a person like you" should make, some employers will engage in schemes to avoid paying you what it now perceives is an excessive bonus or commission. | |||
| Some employers present bonus or commission plans where the max you might earn under the plan. If you unexpectedly earn two to three times what the employer calculated, it will think of ways to avoid making the payment. The employer's solution may range from a "renegotiation" to getting rid of the problem by firing the employee. | |||
| You have heard of "buyer's remorse?" Well, we call the above "employer's remorse." | |||
| Contact a lawyer to discuss: | |||
| Breaks, lunch, or rest periods - How you can recover monies because of an employer's failure to provide breaks or lunches. | |||
| Overtime - In California how to recover up to four years of unpaid overtime wages when an employer unlawfully has failed to pay overtime wages. That's an EXTRA YEAR compared to pursuing a plain old overtime wage claim. | |||
| Overtime - Recover unpaid overtime wages, WITHOUT proof of hours worked. | |||
| Off-the-clock work - How to recover monies when an employer unlawfully requires employees to work for free, commonly called "off the clock." Recover such wages WITHOUT proof of hours worked. | |||
| Exempt Classification - Recover up to four years of wages when an employer uses unlawful means to avoid overtime wage payments by misclassifying one's status.. | |||
| Temp or independent contractor classification or designation - Recover up to four year's wages because an employer illegally used labels or classifications to avoid paying proper and fair wages and to circumvent payment of benefits, including stock options or health insurance. | |||
| Bonuses - Recover unpaid bonuses or other performance incentive payments. All of these are wages under California law and most of the time must be paid by employers. | |||
| Vacation - Recovering unlawfully withheld or miscalculated vacation wages [in California earned vacation is a wage and must be paid to an employee when he or she leaves the company.]. | |||
| Vacation - Recovering vacation wages owed because of unlawful "use it or lose it" vacation policies. | |||
| Commissions - Find out ways an attorney can recover unpaid or wrongfully withheld commission wages. This is one of the most common ways that employers cheat employees out of wages, by failing to pay commissions earned and payable. | |||
| Penalties - Ways to obtain substantial waiting time penalties because of an employer's Labor Code violations. Penalties can be substantial. Claimants have received penalties in the thousands of dollars [$3000 to $25,000]. | |||
| DANGERS - Learn the perils of pursuing a wage claim if you are still working for the Company. Find out the best time to file a wage claim. Bonus Tip: the best time to bring a claims is NOT while you are still employed by the Company that owes you wages. | |||
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LABOR COMMISSIONER | ||
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DLSE Manual w/ Opinion Letters (40MB ZIP file. This is for lawyers visiting employlaw.com.) Revisions - click here. | ||
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California Labor Code (not light reading, this link is more for lawyers visiting employlaw.com.) | ||
