Table of contents:
- What Are California’s Minimum Wage Rules?
- What Are California’s Overtime Rules?
- Specific Exemptions To California’s Overtime Rules
- Misclassification of Independent Contractors In California
- Meal Breaks For California Workers
- Rest Periods For California Workers
- Expense Reimbursements For California Employees
- Commission Requirements For California Employees
- Holidays And Vacations For California Workers
- California Rules For Reporting Time Pay
- Required Pay Periods In California
- Pay Stub/Statement Requirements
- How Does California Define “Work”?
- Statute of Limitations For California Wage And Hour Complaints
- Penalties And Remedies For Wage And Hour Violations
- Class Actions For Wage And Hour Complaints
California provides workers with some of the most protective wage and hour laws in the country. Within the state, certain cities offer even more generous benefits. Despite these advantages, however, not all workers receive the treatment to which the law entitles them. You may be one of these individuals, or perhaps you’re not sure what exactly your rights are. The Lore Law Firm is ready to assist you.
What Are California’s Minimum Wage Rules?
As of January 1, 2022, the minimum wage in California for employers with 25 or fewer employees is $14.00 per hour. Meanwhile, for employers with 26 or more employees, the rate is $15.00 per hour. Starting on January 1, 2023, the hourly rate increases to $15.50 regardless of how many employees the employer has.
Numerous municipalities in California have set their own minimum wage rates. For example, the City of Los Angeles has set the minimum wage at $16.04/hour as of July 1, 2022. In unincorporated areas of Los Angeles County, the rate is $15.96/hour as of July 1, 2022.
The following cities in CA have their own minimum wage rates. If you work in one of these locations, you should check the specific minimum wage rate for that city:
- Alameda, Belmont, Berkeley, Burlingame, Cupertino, Daly City, East Palo Alto, El Cerrito, Emeryville, Foster City, Fremont, Half Moon Bay, Hayward, Los Altos, Malibu, Menlo Park, Milpitas, Mountain View, Novato, Oakland, Palo Alto, Pasadena, Petaluma, Redwood City, Richmond, San Carlos, San Diego, San Francisco, San Jose, San Leandro, San Mateo, Santa Clara, Santa Monica, Santa Rosa, Sonoma, South San Francisco, Sunnyvale, and West Hollywood.
Lastly, in some cases, the industry in which you work may have its own minimum wage rate. For instance, healthcare workers were (until recently) guaranteed a minimum wage of $25.00/hour. On August 11, 2022, the ordinance setting this rate was suspended, pending a petition organized to oppose it. The issue will be decided by voters in 2024.
What Are California’s Overtime Rules?
Overtime rules in California are among the most pro-worker in the country. As an example, California overtime laws require daily overtime pay if eligible employees work more than 8 hours per day. Most states do not mandate this.
The following rates apply to non-exempt employees:
- Any hours worked over 8 per day at 1.5 times the regular pay rate
- Any hours worked over 40 per week at 1.5 times the regular pay rate
- The first 8 hours on the 7th consecutive day worked at 1.5 times the regular pay rate
- Any work in excess of 12 hours per day at 2 times the regular rate
- Any work in excess of 8 hours on the 7th consecutive day at 2 times the regular rate
Generally, employers are free to schedule employees for as many hours as they want. However, under California law, there are some restrictions on mandatory overtime. The following fields cannot be required to work more than 72 hours a week:
- Harvest product handlers
- Agricultural positions
- On-site construction, drilling, logging, and mining
Specific Exemptions To California’s Overtime Rules
Some jobs are considered exempt from California’s overtime and labor law requirements. If the job falls within an exempt classification, the employee can lose rights to the following:
- Overtime premium
- Minimum wage
- Reporting time pay
- Rest period requirement
- Meal and lodging credit limits
- Uniform and equipment provisions
California has more rigorous exemption requirements than federal law. For example, the most common salaried overtime exemptions require that the employee spend at least 50% or more time on exempt duties. This is not a requirement under federal law. In addition, bonuses, commissions, and incentives cannot be used to meet the minimum salary requirement.
Some specific exemptions from the California overtime and labor law requirements are:
- Administrative workers
- Professional employees
- Computer professionals
- Outside salespersons
- Truck drivers
- National Service Program (e.g. AmeriCorps) participants
- Commissioned employees
- Movie picture projectionists
- Radio and television employees
Each of these categories has its own unique definitions and criteria, so check with an experienced California wage and hour attorney for more information about exemptions.
Misclassification of Independent Contractors In California
Independent contractors (aka 1099 workers) are generally not entitled to overtime pay and other benefits that employees enjoy. California is home to many individual workers who are legitimately running their own businesses and who may properly be treated as independent contractors. But because independent contractors have fewer rights than employees, including the right to overtime pay and benefits, employers have a strong incentive to mischaracterize their workers – treating them as independent contractors when they are really employees.
Merely labeling an employee as an independent contractor is not enough to avoid overtime pay and other labor law requirements. Nor does entering into a written agreement turn an employee into an independent contractor.
California has adopted what’s known as the ABC test to determine whether a worker is an independent contractor or an employee. Under this test, businesses that treat workers as independent contractors must show that the worker:
- Is free from the control and direction of the hiring company, both under the contract for the performance of the work and in fact;
- Performs work that is outside the usual course of the hiring entity’s business; and
- Is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed
All three criteria must be met for an employer to pass the ABC test.
Meal Breaks For California Workers
Employers are required to give employees the following meal breaks:
- Unpaid 30-minute meal break if the employee works more than 5 hours per day. However, this can be waived by mutual consent if the total hours worked is no more than 6 per day.
- A second unpaid 30-minute meal break if the employee works more than 10 hours per day. This can be waived by mutual consent if (a) the total hours worked is no more than 12 per day, and (b) if the first meal period was not waived.
If the employee is not relieved of all work duties or is required to remain on call during the meal period, it counts as hours worked and the employee must be paid.
Rest Periods For California Workers
In addition to meal breaks, employers are required to provide their employees with a 10-minute rest period for any 4-hour work period or a major fraction thereof. This is not required if the total time worked is less than 3.5 hours.
The break must be taken as close to the middle of the work period as possible. Rest breaks are counted as time worked and the employee must be paid for them. Also, the employer can require that the employee remains on the premises during the rest break.
If an employer fails to allow an employee to take their allotted meal or rest breaks, the employer must pay the employee one additional hour of pay (at the regular rate of pay) for each break that was denied to them. Workers are also protected from retaliation for bringing claims related to meal and rest periods.
Expense Reimbursements For California Employees
California state law requires employers to reimburse employees for all necessary expenditures or losses incurred through the discharge of their duties or in obedience to the employer’s directions. Expense reimbursements may include payment for the use of personal cell phones, vehicles, and more. The purpose of this rule is to prevent employers from passing the cost of doing business on to their employees.
Employees cannot waive this right and cannot be fired for asserting it. If an employer fails to properly reimburse employees for business expenses, the employee can recover their unreimbursed expenses, interest, and penalties.
Commission Requirements For California Employees
Under California state law, if an employee’s compensation is based on commissions, the commission compensation agreement must be in writing and must specify the way in which commissions are computed and paid. Employees who are paid on a commission basis are entitled to be paid once commissions are earned, which should be defined by the commission agreement.
In general, commissions must be paid at least twice a month. Workers are also entitled to unpaid commissions upon the termination of their employment. The commission pay arrangement is only available for sales employees, and there are some circumstances in which a commissioned employee can earn a commission and still be entitled to minimum wage, overtime pay, and meal and rest breaks.
Holidays And Vacations For California Workers
Hours that are worked during holidays (as well as weekends) are treated as regular workdays. With respect to holidays, California does not require:
- That an employer provides its employees with paid holidays
- That an employer must close its business on any holiday
- That employees be given the day off for any particular holiday
- Additional pay for work done on holidays
Regarding vacations, California state law does not require that employers provide either paid or unpaid vacation time. However, if paid vacation time is provided, employers must follow certain rules. Earned vacation time, for instance, is considered as wages. Also, vacation time is earned (or “vests”) as work is performed and cannot be forfeited even upon termination of employment, regardless of the reason for the termination.
An employer may place a reasonable limit on how many hours of vacation an employee may earn. Upon termination of employment, and unless otherwise provided in a collective bargaining agreement, all earned and unused vacation pay must be paid at the employee’s final rate of pay.
California Rules For Reporting Time Pay
There are instances in which employees are scheduled to report to work but, once they arrive, are either not put to work or are permitted only to work less than half of their usual or scheduled day’s work. This often occurs due to inadequate employer scheduling or lack of notice given to the worker. In cases like these, employees are entitled to compensation known as reporting time pay. The requirements are as follows:
- If an employee is required to report to work, but is either not put to work or is permitted only to work less than half of the usual or scheduled amount of work for the day, the employee must be paid for half the usual or scheduled amount of work for the day. In no event can the worker be paid for less than two hours, nor is the employer required to pay more than four hours. The employee’s reporting time pay rate is simply his or her regular pay rate.
- If an employee is required to report to work a second time in any one workday but is furnished with less than two hours of work on the second reporting, he or she must be paid for two hours at the regular rate of pay.
Reporting time pay is not counted toward hours worked in computing overtime pay.
Required Pay Periods In California
In general, California workers are entitled to be paid wages at least twice a month on a payday that is designated by the employer. Overtime wages must be paid by the next regular payroll period following the payroll period in which the overtime wages were earned. In other words, overtime wages that have been earned in one payroll period must be paid no later than the payday for the next payroll period. Only the payment of overtime wages may be delayed until the next payday.
Pay Stub/Statement Requirements
California is one of the few states that have pay stub/statement requirements. Every time you are paid, whether it is by check, cash, or otherwise, you must be given a detachable part of the check or a separate statement that shows certain information, such as gross wages earned, net wages earned, and all deductions.
How Does California Define “Work”?
Compared to federal law, California law is more favorable to workers when it comes to defining what constitutes work. If you are paid hourly, piece-rate, or day-rate, but you are not paid for every minute you are at work or doing work, you may be owed back wages.
Hours worked includes all time:
- During which you are required to be at a designated work location
- During which you are required to be on duty or to be at a designated work site
- Spent traveling as part of your job during normal working hours
- During which you are permitted to do work
Unpaid work may include:
- Waiting to undergo, and actually undergoing, security screenings or bag checks
- Waiting to undergo, and actually undergoing, Covid-19 screenings (e.g. tests and temperature checks)
- Computer boot-up, sign-in, and download time spent prior to being “clocked in” at work
- “Clocking out” before spending time shutting down programs and logging out
- Waiting on assignments or being told when to begin, while on work premises
- Receiving or sharing work-related information (pre- or post-shift “relief time”)
- Walking, riding, and traveling to and from the actual place of work (e.g. when the employee is required to park in a remote lot and take a bus)
- Changing in and out of required work clothes
Statute of Limitations For California Wage And Hour Complaints
As with most civil actions, those involving wage and hour issues must be filed within a certain time period. This time period is known as the statute of limitations, and failure to file by the deadline could irreversibly bar you from pursuing legal action.
The statute of limitation for claims that allege the non-payment of wages is two (2), three (3), or four (4) years from the date of the alleged non-payment, depending on the underlying employment agreement or the type of claim:
- If the claim is based on an oral agreement, it must be filed within 2 years from the date the claim arose
- If the claim is based on a written agreement, it must be filed within 4 years from the date the claim arose
- If the claim is for minimum wage, unpaid overtime, or other statutory claims, the claim must be filed within 3 years from the date the claim arose (however, in many instances employees will be able to go back a total of 4 years under California’s unfair competition statutes)
Penalties And Remedies For Wage And Hour Violations
Employees can recover overtime wages, meal and rest period penalties, and waiting time penalties under California’s labor laws. Liquidated damages of double the unpaid overtime wages are provided by federal law, but not by California law.
The Private Attorneys General Act (PAGA) allows employees to pursue fines for violations of the state labor law that normally only the State of California could enforce. Any fines recovered by the employee are split, with 75% going to the state and 25% going to the employee. The employee can recover these fines in addition to any other recovery to which they may be entitled. Some of the most common violations covered by PAGA include:
- Overtime payment violations
- Minimum wage payment violations
- Failure to give required meal breaks
- Failure to pay tips and gratuities
- Failure to reimburse for business expenses
- Failure to include proper payroll information on paychecks
Class Actions For Wage And Hour Complaints
A class action lawsuit is one in which a large number of aggrieved employees with the same or similar complaints against an employer file a lawsuit collectively as a group. Overtime and wage claims may be brought as a class action under California state law. The employees who file the class action lawsuit as class representatives are usually awarded extra compensation (a “service award”), in addition to their individual recovery, as a form of incentive pay.
Contact Our California Wage And Hour Attorney
California has complex rules and regulations that protect workers, and the above items only scratch the surface. While the state is undoubtedly pro-employee, many employers refuse to follow the law and cheat their workers in the process. If you have questions about whether your wage and hour rights have been violated, let The Lore Law Firm take a look at your case. Reach out to us today.