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Wage and Hour Law

Wage and Hour
Family & Medical Leave
Unemployment Insurance
State Disability Insurance
Workplace Health & Safety
Workers Compensation
Employment Discrimination
Wrongful Termination
At the federal level, wages and work hours are governed by the Department of Labor and the Federal Labor Standards Act. The Department of Industrial Relations - Division of Labor Standards Enforcement administers California wage and hour laws. The California Labor Code and California Code of Regulations, Title 8 are the major governing laws.

Minimum Wage and Overtime
Almost all workers, regardless of their immigration status, have a legal right to be paid the statutory minimum wage or any higher wage they may have been promised, and to make a claim against an employer who violates this right. An agreement to work for less than minimum wage is void as violating public policy, with very few exceptions.

As of September 2005, the California minimum wage is $6.75 per hour; the federal minimum wage $5.15. As between the federal and state minimum wage, the higher minimum wage prevails. Generally, a worker is entitled to one and one-half times their hourly wage for all hours worked in excess of 40 hours/week.

Fair Labor Standards Act of 1938
29 U.S.C. §201 et seq.29 CFR 510 794;

The Fair Labor Standards Act establishes standards for minimum wages, overtime pay, record keeping and child labor. These standards affect more than 100 million workers, both full time and part time, in the private and public sectors.

The Act applies to enterprises with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell or work on goods or materials that have been moved in or produced for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies, i.e., the Act does not cover enterprises with less than this amount of business.

However, the Act does cover the following regardless of their dollar volume of business: hospitals; institutions primarily engaged in the care of the sick, aged, mentally ill or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools and institutions of higher education; and federal, state and local government agencies.

Employees of firms that do not meet the $500,000 annual dollar volume test may be covered in any workweek when they are individually engaged in interstate commerce, the production of goods for interstate commerce, or an activity that is closely related and directly essential to the production of such goods.

The Act covers domestic service workers, such as day workers, housekeepers, chauffeurs, cooks, or full time babysitters, if they receive at least $1,300 (2001) in cash wages from one employer in a calendar year, or if they work a total of more than eight hours a week for one or more employers.

The Act exempts some employees from its overtime pay and minimum wage provisions, and it also exempts certain employees from the overtime pay provisions alone. Because the exemptions are narrowly defined, exact terms and conditions need to be researched.

The following are examples of employees exempt from both the minimum wage and overtime pay requirements:

• Executive, administrative and professional employees — including teachers and academic administrative personnel in elementary and secondary schools, outside sales employees, and certain skilled computer professionals — as defined in the Department of Labor's regulations;

• Farm workers employed on small farms i.e., those that used less than 500 "man days" of farm labor in any calendar quarter of the preceding calendar year); and

• Casual babysitters and persons employed as companions to elders or infirm.

Certain employees are exempt or partially exempt from the overtime pay requirements.

Basic Provisions/Requirements
The Act requires employers to pay employees a minimum wage of not less than $5.15 an hour as of September 1, 1997. Youths under 20 years of age may be paid a minimum wage of not less than $4.25 an hour during the first 90 consecutive calendar days of employment with an employer. Employers may not displace any employee to hire someone at the youth minimum wage.

Employers may pay employees on a piece rate basis, as long as employees receive at least the equivalent of the required minimum hourly wage rate. Employers of tipped employees. i.e., those who customarily and regularly receive more than $30 a month in tips, may consider such tips as part of wages, but employers must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also meet certain other conditions.

The Act also permits the employment of certain individuals at wage rates below the statutory minimum wage under certificates issued by the Department of Labor:

• Student learners (vocational education students);

• Full time students in retail or service establishments, agriculture, or institutions of higher education; and

• Individuals whose earning or productive capacities for the work to be performed are impaired by physical or mental disabilities, including those related to age or injury.

Employers must keep records on wages, hours and other information as set forth in the Department of Labor's regulations. Most of this data is the type that employers generally maintain in ordinary business practice.

Employee Rights
Employees may find out how to file a complaint from local Wage and Hour Division offices.

In addition, an employee may file a private suit, for two or three years of back pay and an equal amount as liquidated damages, plus attorney's fees and court costs.

Compliance Assistance Available
More detailed information about the FLSA, including copies of explanatory brochures and regulatory and interpretative materials, is available from local Wage and Hour Division offices.

State Laws — California
Access every state labor agency via DOL at
In California, the Employment Development Department’s Division of Labor Standards Enforcement adjudicates wage claims, investigates discrimination and public work complaints, and enforces Labor Code statutes and Industrial Welfare Commission (IWC) orders.

Statutes of Limitations
The California statue of limitations for minimum wage and overtime claims is 3 years. Oral contracts for higher wages have a 2-year statue of limitations.

Live-in Employment
An employer must still pay minimum wage for live-in employment. According to IWC Wage Orders, reasonable deductions for room and board may be made when a written, voluntary agreement to deduct exists and accommodations are suitable. Live-in employment is governed by different overtime rules.

Most employees who are terminated are entitled to be paid at the time of termination. Most employees who quit and give 72 hours notice must be paid at the time they leave employment; without such notice, the employer has up to 72 hours to pay. Employers who fail to pay when required or provide an employee with itemized statements of wages, hours, and deductions, are potentially liable for statutory penalties that accrue to the employee. In addition, if the employee has been paid with a bad check, the employer may be liable for treble damages in addition to the amount of the check.

Filing a Wage Claim
First, the employee should always demand that the employer pay the unpaid wages, preferably in writing. If an employer fails to respond to a demand letter with payment or offer to negotiate, a claim may be filed in one of these forums:
• Small Claims Court,
• State Labor Commissioner,
• California Superior court, or
• U.S. Department of Labor.

Small Claims Court This forum probably provides the quickest resolution. While people must appear on their own behalf, an experienced advocate may help clients prepare their claim. This forum's disadvantages are that: the maximum amount recoverable is $5,000; plaintiffs have no right to appeal unfavorable judgments, and many claimants may have trouble collecting on a favorable judgment given the technicalities of collection procedures.

State Labor Commission has no monetary limit on claims, allows advocate representation and investigates and attempts to resolve claims. A hearing is scheduled if the hearing officer finds enough evidence to proceed. Claimants can be prepared to present their own cases and given written briefs that persuasively argue the claimant's position. If the client wins and the employer appeals, the Labor Commissioner represents the client. This forum's disadvantages are that: it can take several months for a hearing to be scheduled and commissioners tend dismiss for lack of evidence after the settlement conference, even when the employee has a meritorious claim.

State Court Claims may also be brought in superior court. The downside is that it can take several months to get the matter decided and the claimant needs attorney representation.

Burden of Proof
The employee is not obligated to maintain written records; their burden is to state their claim with reasonable precision. Oral testimony alone has been held sufficient to meet this burden. The burden then shifts to the employer to refute employee testimony with written records of hours and wage payments, which the employer is legally obligated to maintain.

Employees - Written Records
Keeping records enables people to accurately calculate their claim and used as evidence in a hearing or trial. Employee records should contain biographical information about the employer, the job, dates and hours worked, wages paid, copies of checks received, co-worker or other witness names and phone numbers. This is especially important for day labor where employers are on the move, and jobs change on an almost daily basis.

Other Wage and Hour Information
• If an employer requires a uniform, the employer is responsible for purchasing and laundering the uniform.

• An employer cannot withhold wages because an employee is in possession of employer property, e.g., uniform, tools, unless the employee authorizes the withholding for the value of property only.

• If the employee has accidentally damaged employer's property, the employer cannot deduct replacement or repair value from the employee's wages.

• Vacations and holidays are a benefit, not a right under the law.

• Claimants who work for employers against whom they may have a claim need to consider the risk of getting fired in retaliation for making a claim. Although in most situations workers have a cause of action for illegal retaliation, such cases are hard to prove and time-consuming. In the meantime, the client may be without a job. This is particularly problematic for undocumented clients who have great difficulty in obtaining employment, and who may not be entitled to the same legal remedies as their documented counterparts.

Clients should be apprised of such risks and come to their own decision on what action, if any, they will take. If clients don’t want to risk losing their job, they can wait for up to three years to file a claim. Clients also should be advised that detailed and accurate good record-keeping will increase their chances of prevailing.