In July 1, 2014, the minimum wage in California was increased to $9.00 per hour from $8.00 per hour. The minimum wage is set to increase, again, to $10.00 per hour on January 1, 2016. These increases to the minimum wage also mean that exempt (or salaried) employees are affected. In order to qualify as an exempt employee, the minimum monthly salary can be no less than two (2) times the State minimum wages. For example, in 2015, an employee must be salaried at a minimum of $3,120.00 per month in order to qualify for exemption.
While these increases are beneficial to employees, who are seeing increases in their paychecks during a time when it is difficult to make ends meet, it has created more issues with employers who are not properly compensating their workers. If you believe that your employer is not properly compensating you for the hours you have worked, paying you for your overtime worked, or is meeting the minimum salary exemption threshold, it is important that you speak with an experienced attorney who can assist you in resolving these disputes.
What is Minimum Wage?
There are two laws that govern minimum wage in California: the Federal minimum wage and the State of California minimum wage. Currently, Federal minimum wage is set at $7.25 per hour as of July 24, 2009, under the Fair Labor Standards Act (FLSA). However, California has set its minimum wage at $9.00 per hour (set to increase to $10.00 per hour in 2016). Clearly, these laws contradict each other, so which one governs? Whenever a State law conflicts with a Federal law, the stricter standard is followed. California has imposed a more protective standard for employers by setting a higher minimum wage, which means that employers must follow the State standard and not the Federal standard. Minimum wage is applicable to both adult and minor laborers; employers are prohibited from paying a worker less than the minimum wage regardless of their age.
Minimum wage laws are violated more commonly that we would all like to think. Unfortunately, not all employers are in compliance with the mandatory minimum wage requirements. Some common examples of minimum wage violations include, but are not limited to:
- Forcing an employee to work for tips or sales commission alone;
- Paying a rate below the mandated minimum wage; OR
- Deducting operating expenses from the employee’s wages, such as, the cost of uniforms, spills and breakage, cash register shortages, or equipment.
These violations commonly occur in the service and manufacturing industries. These include restaurants and bars, healthcare and hospitals, agriculture, day cares, hotels, and textile manufacturing.
What is Overtime?
California law requires that non exempt employees be paid one and one-half times their regular rate for any hours worked over eight (8) in one day or 40 hours in a week. Additionally, California law requires that non exempt employees be paid two (2) times their regular rate for hours worked beyond 12 in a day or over eight hours on the seventh day of work.
Sometimes, employers will give their employees bonuses and claim that these payments make up for missed overtime pay. Bonuses can fall into two categories: non-discretionary and discretionary. A non-discretionary bonus is included into the calculation of a worker’s regular rate of pay for overtime purposes. They are determined by the number of hours worked in a period, products produced or sold, and/or efficiency. Discretionary bonuses, however, are not included in the regular rate of pay because they are generally treated as a “thank you” for an employee’s service to the company at the employer’s discretion and not measured by time worked or efficiency of work. Discretionary bonuses are generally given during holiday times or as gifts and do not offset miscalculations in overtime pay.
When employers fail to pay their employees properly for overtime worked under Federal and State employment laws, employees have important labor rights that need to be enforced against their employer in order to hold them accountable and recover lost wages.
What is an “Exempt” Employee?
Employers may be exempt from the overtime requirement. When an employee earns more than $37,400 per year and spends more than half of their time working in administrative, executive, computer and information technologies, agriculture, or outside sales, they are exempt from the overtime requirement. In 2016, this exemption threshold will increase to $41,600.
Under California law, the following professions are exempt from the overtime requirement, but not under Federal law:
- Parents, spouses, children, or legally adopted children of employers;
- Professional actors;
- Members of national service programs;
- Direct employees of the State or county, incorporated city or town, or any other municipal corporation;
- Resident managers of small homes for the elderly
It is important to understand what constitutes an exempt employee under California law. All too often, employers misclassify employees as exempt in order to avoid paying their workers overtime pay and other benefits that are entitled to non exempt employees. Regardless of whether the misclassification was intentional or unintentional, non exempt workers may be owed back wages and other benefits under the law.
If you believe that your employer may have wrongfully misclassified you as an exempt employee, it is important that you consult with an experienced attorney with the knowledge and skill who can evaluate your case.
Am I Allowed to Agree to Work for Less Than Minimum Wage?
No. The minimum wage laws are imposed on the employer, not the employee. Employers must comply with these laws, which means that an employee may not voluntarily or involuntarily waive the minimum wage rate. This includes collective bargaining agreements through unionized labor.
Can My Employer Punish Me for Reporting Them?
No. Employers may not discriminate or retaliate against an employee who reports violations of minimum wage laws, or even if the worker asks why they are not being paid the minimum wage. An employer who does retaliate may be reported to the Labor Commission or may be subject to a civil lawsuit.
How are Minimum Wage and Overtime Disputes Enforced in California?
The process of enforcing a minimum wage dispute is to file a claim with your local office of the Division of Labor Standards Enforcement (DSLE). The case is assigned to a Deputy Labor Commissioner who will evaluate your claim and make a determination on how to proceed, based on all of the factors, circumstances, and information presented. The claim is then either referred to a conference or hearing, or is dismissed.
If a conference is held, both parties will be notified of the time and place. The conference is an initial review to determine the validity of the case and whether a mutual resolution can be achieved without the need for a hearing. However, if resolution is unsuccessful, the case will either be scheduled for a hearing or dismissed due to a lack of information and evidence.
A hearing follows a set of legal formalities; the parties and witnesses are called to testify under oath and an official record is made of the proceedings. The parties will present their cases and evidence, after which, an Order, Decision, or Award (ODA) is made by the Labor Commission. The Commission’s decision may be appealed in court, which will be set for trial, giving the parties a new opportunity to re-present their evidence and testimonies.
The process of bringing a minimum wage or overtime dispute requires a lot of attention to detail and knowledge of the proper procedures to avoid a dismissal. Workers who feel that their minimum wage rights have been violated are encouraged to consult with an attorney who can evaluate their claim and guide them through the complex system of administrative review and potential court appeals. The team of advocates at David Yeremian & Associates, Inc., has the experience and knowledge to enforce your minimum wage and labor rights.
Experienced Advocated for Minimum Wage and Overtime Disputes
At David Yeremian & Associates, Inc., we believe that everyone deserves to be paid fairly for the time they work. That is why we fight beside workers when they are not paid their minimum wage rights or overtime hours they put it, when they are only paid their standard rate for overtime hours, or when their overtime has been miscalculated. Contact our office for a case evaluation today.