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
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
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
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
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
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
• Casual babysitters and persons employed as companions to elders or
Certain employees are exempt or partially exempt from the overtime pay
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
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
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
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
• 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
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
• 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.