Are you an employee or employer in the Golden State? If so, listen up; updated minimum wage requirements went into effect this year, and more changes are coming.
California employees are entitled to and should always receive fair wages. Unfortunately, some employers are guilty of underpaying their employees intentionally or due to oversite or neglect. Regardless, underpaying is illegal and often starts with below-required wages. While the federal minimum wage is $7.25 per hour, California employers should be aware a $15 minimum wage was implemented on January 1, 2022. Subsequently, the increase was a $14 minim hourly wage for businesses with fewer than 25 employees.
Inflation; CA Minimum Wage Increases
Employers were required to pay a statewide minimum of $15.00 per hour until our current economic landscape triggered an impactful change. Due to inflation rates exceeding 7%, a statutory increase was automatically mandated, resulting in a statewide expansion of a $15.50 minimum projected wage by Gov Newsom on January 1, 2023. If your employer is not honoring the current minimum wage, they are violating the law.
Additionally, California has municipal minimum wage requirements, which differ depending on the municipality. Taking inflation into consideration, many localities raised their minimum wages on July 1, 2022. You can check if your city has increased its minimum wage by visiting the locality website for your workplace. An employer paying below minimum wage necessitates a “California wage claim.” Consider contacting a knowledgeable California Employment Law Attorney if this is happening.
Below are different ways employers underpay.
Unpaid Training Practices
An employer who mandates unpaid training is likely disregarding California’s labor codes.
Unpaid Training: before official employee “start dates,” an employer may require a week or two of training. Some employers claim trainees are not working at full capacity and are underserving of wages.
Costs quickly mount during unpaid training. Work attire requirements during unpaid training translate to employees spending money on new clothing, and any additional expenses can be a strain without income. Trainees may spend money on public transportation, Uber, or gas, food during breaks, and bills to pay, like rent, resources dwindle, and the individual suffers. Taking people through “training” without pay is unfair and illegal in California.
Conclusion: In unpaid training, employers rationalize that individuals aren’t yet interacting with customers, are not contributing to workplace duties, and thus do not deserve pay; however, this is untrue. A training’s primary goal is to teach skills for performing work duties and, therefore, is a benefit to the employer, an asset to the business, and should be paid.
To avoid providing a wage, employers may refer to training as “recreational,” asking you to work overtime, or schedule training hours off the clock. Even current employees can fall victim to lost wages due to mandatory training. Some employers will try to scam free money or labor off new hires, violating employee rights. The Federal Fair Labor Standards (FLSA) and California Labor Laws make it very difficult for an employer to justify non-paid training, and in most cases, it is unlawful.
Unpaid Overtime Hours
Under section 510 of the California Labor Code, overtime compensation is required when you work over eight hours a day or forty per week. As a non-exempt employee, you’re entitled to receive one and half times your regular pay rate. Non-exempt employees who work more than twelve hours in a workday or more than eight hours for seven consecutive days in a workweek should receive double-time pay.
Example: Lucy makes $19 an hour at a marketing firm but is assigned to cover extra hours for a client deal. Lucy works eight hours a day plus six additional hours aside from lunch and breaks. She worked 98 hours in seven days as a dedicated employee.
Conclusion: One and a half times Lucy’s regular rate ($28.50 per hour) is payable during hours nine through twelve and double-time ($38 per hour) for the final two hours of each of the first six shifts. Lucy should also be paid double-time on the last day (day seven). Many employers won’t let their employees know if they should receive time and half. Many employers fail to adjust time sheets or input inaccurate information, which is illegal.
Can anything be done if your employer is paying late or fails to pay you?
California employers must pay employees on time regularly. Under Section 210 of The California Labor Code, employees in California have the right to prompt payment. Employers may face a penalty if they fail to pay employees on time. First-time late payments are subject to a $100 penalty. The employer must pay a $200 fine plus 25% of the unlawfully withheld wages if the lateness was intentional.
Wage Theft: Governor Newsom enacted AB 1003 in 2021, increasing penalization for employers who violate wage and hour laws (like failing to pay employees). AB 1003 asserts wage theft as a severe violation and potentially a criminal charge. Previously, employers could face misdemeanor charges for wage theft; however, under AB 1003, employers could be guilty of grand theft and potentially face a felony charge. AB 1003 specifies any employer who intentionally misappropriates wages, including gratuities, over $950 from a single employee, or $2,350 from 2 or more employees, in any 12-month consecutive period would be charged with grand theft.
What may constitute wage theft: Paying below minimum wage, failing to pay overtime hours, working off the clock, violating meal and rest breaks, failing to pay complete wages, and, one could argue, failing to pay on time.
Note: Delaying or withholding final payments when individuals quit or are fired also falls under these laws.
Underpaid or Your Employee Rights are Violated
Underpayment and wage and hour violations can happen in a variety of ways. You should consult an experienced employment litigation attorney immediately if you suspect your employer is violating any of the wage and hour laws discussed here or in any other way violating your rights as an employee.