Wage and Hour FAQ
The Nuddleman Law Firm, P.C. represents employees and employers in a wide variety of wage and hour issues, including unpaid wage claims, minimum wage and overtime violations, unpaid bonuses and commissions, missed meal and rest break claims and representative actions under the Labor Code Private Attorney General Act (PAGA).
Where can I file a wage and hour claim?
California employees who believe they are owed unpaid wages have a variety of ways to recover the unpaid wages. If the amount owed is less than $10,000, the employee may decide to file a small claims action. A small claims action is a fairly simple process, is inexpensive and can be quicker than other options, but the employee can only recover up to $10,000.
Employees can also file a claim with the local Labor Commissioner(Division of Labor Standards Enforcement). There is no jurisdictional limit on Labor Commissioner claims, and the process does not require an attorney. Labor Commissioner claims typically take longer than small claims court actions, but are quicker than superior court actions. There is no “discovery” phase in Labor Commissioner proceedings, so if the other side has witnesses or documents you need to prove your claims or defense, you may have a difficult time obtaining the documents prior to the hearing. The Labor Commissioner does not have to exercise jurisdiction in every case, and may decide not to proceed with some claims. Attorneys’ fees are usually not available, and a dissatisfied party may appeal the Labor Commissioner’s Order, Decision or Award.
Employees can also file a lawsuit in state or federal court. Although individuals may represent themselves, filing or defending a lawsuit in court can be difficult if an experienced attorney does not assist you. The types of claims and amount owed will determine which court has jurisdiction over the claims. A court action allows both parties to conduct discovery (such as depositions, requests for documents, written interrogatories, etc.), in order to prepare the case for trial. Court actions can take a year or more depending on the complexity of the case and the court’s calendar. Prevailing employees are oftentimes entitled to recover their attorneys’ fees in wage and hour claims. Employers, even if they are successful, usually cannot recover their attorneys’ fees. A court action can be tried in front of a jury or a judge.
Is it better to be in federal court or state court?
Depending on the types of claims alleged, an employee can file in state or federal court. In some circumstances, the employer can remove the case to federal court. Which court is right for your wage and hour case depends on a number of factors. The nature of your claims and the parties may require filing in one forum or the other. Federal courts have jurisdiction if the case involves a federal question, or when the amount in controversy exceeds a specific amount and both parties are from different states.
Although the processes are similar, there are some differences in how the cases proceed in state versus federal court. Depending on your case, it may be important to hire an attorney familiar with state and federal procedures. Many attorneys prefer to be in one forum or the other, and good attorneys will help the client decide which offers you the best chance of prevailing in your wage and hour.
What kinds of claims does the Labor Commissioner handle?
The Labor Commissioner has jurisdiction over claims involving unpaid minimum wage and overtime, missed rest or meal breaks, and unpaid expenses. The Labor Commissioner also handles other types of unpaid wage and hour claims, such as unpaid commissions, unpaid bonuses, unpaid vacation or paid time off, and failure to timely pay all wages owed.
Recent legislative changes allow the Labor Commissioner to award liquidated damages for the failure to pay overtime, but there are still some claims that the Labor Commissioner does not handle. For example, employees suffering an injury as a result of receiving incomplete pay stubs must file such claims in court. The Labor Commissioner does not adjudicate cases seeking to recover penalties under the Labor Code Private Attorney General Act (PAGA).
How far back can an employee claim for unpaid wages?
Every lawsuit or administrative claim must be filed within a particular statute of limitations. The statute of limitations determines how far back an employee can assert a claim for unpaid wages.
Claims for a breach of an oral agreement must be filed within 2 years of the breach of contract. Claims for a breach of a written agreement must be filed within 4 years of the breach of contract. Statutory claims, such as a claim for unpaid minimum wage or overtime, must be filed within 3 years. Many plaintiff’s lawyers will include an unfair business practices claim under Business & Professions Code 17200 to expand the statute of limitations on an unpaid wage claim to 4 years, but that is only if the case is filed in court. Most claims seeking penalties must be filed within 1 year of the violation.
Different actions may toll, or stop, the statute of limitations. Filing a court or administrative action may stop the statute of limitations. The parties may be agree in writing to waive the statute of limitations defense for a particular period of time. Failing to file a lawsuit or a Labor Commissioner claim within the required statute of limitations may bar some or all of the employee’s claims.
Do I need an attorney in a wage and hour claim?
It depends on the type of claim and where the claim is brought. If the claim proceeds before the Labor Commissioner, either party may have an attorney but an attorney is not required. Parties in small claims actions are not allowed to have attorneys represent them (although corporations may appoint an attorney as their representative). Individual parties may represent themselves in superior or federal court, but are at a distinct disadvantage, particularly when an attorney represents the other side. Failing to understand the intricacies of litigation can cause an otherwise viable claim or defense to fail.
Even if you want to proceed without an attorney, a smart litigant will talk with an attorney prior to filing or defending a wage claim to determine the best course of action. An experienced wage and hour attorney can advise you regarding your options and suggest ways to increase your chances of success.
Does an employee have to make a demand for payment prior to proceeding with a wage claim?
An employee is not required to make a demand for payment, but it if the employee contacts the employer prior to filing suit, the parties may be able to settle their differences without the delay and expense of litigation. Although most settlement negotiations are confidential, it is important to consult with an experienced wage and hour attorney prior to making or responding to a demand to determine the strength of your case and to ensure you don’t say or do something that could hurt your case.
In a recent case, the plaintiff tried to convince a former employer to pay the employee money under threat of reporting the employer to the government for various violations. A court later determined the employee engaged in extortion, which carried significant consequences for the plaintiff.
What kind of records do I need in a wage and hour claim?
Employers are required to maintain accurate records of the hours worked and wages paid to its employees. If an employer fails to maintain accurate records, the employee’s testimony alone may be sufficient to establish the hours and days worked. A court and the Labor Commissioner will not penalize the employee because the employer failed to keep accurate records.
The best evidence of the hours worked and the wages paid are the actual time and payroll records. If those are not available, the parties may need to rely on the employee’s memory and the memory of those that worked with the plaintiff. There may also be indirect evidence of the hours worked, such as emails, texts, security or parking lot logs. While an employee has a right to request time and payroll records, obtaining the indirect evidence may be significantly more difficult.
Written offer letters and policy manuals may help the trier of fact determine some essential facts, such as the terms of the employment, whether the employee was entitled to certain benefits (e.g., vacation pay, bonuses, commissions, etc.), and whether the employee was expected to perform exempt or non-exempt work.
If an employee is paid a salary, does the employer still have to pay overtime?
That depends on the amount of the salary and whether the employee is performing non-exempt work. Most employees are entitled to minimum wage and overtime unless they fall into one or more specified exemptions. The most common exemptions—administrative, professional and executive exemptions—require the employee to receive a salary of at least two times the state minimum wage, but also require the employee to be “primarily engaged” in exempt duties. Primarily engaged means the employee must spend more than 50% of his/her time performing exempt duties. Although a manager may receive a salary and may be responsible for important aspects of the job, if the manager spends most of his/her time performing the same work as non-exempt employees then there is a good chance the manager is still entitled to overtime payments. A job title alone is insufficient to determine whether the employee is or is not entitled to overtime.
The California Labor Code says a salary only compensates a non-exempt employee for the regular hours worked. This means if an employer misclassifies an employer pays an employee a salary when the employee is required to receive overtime, and if the employee works overtime hours, the employee is still owed overtime pay. The Labor Code directs that the employee’s regular rate of pay, for the purposes of determining the overtime rate of pay, is the employee’s weekly salary divided by 40. Even if the employer and employee agree that the salary will compensate the employee for all hours worked, the law says the salary does not cover overtime hours.
What happens if an employee is not allowed to take a lunch break?
Most employees are entitled to an unpaid 30-minute meal period whenever the employee works more than 5 hours in a day. An employee working less than 6 hours may voluntarily waive the meal period, and some employees may agree to work an “on-duty meal period” if there is a valid on-duty meal period agreement. Employers are not required to force employees to take meal breaks.
Employers that do not maintain accurate records of the meal breaks taken may be accused of failing to provide the required meal break, and may be subject to a penalty equal to one hour’s pay at the employee’s regular rate of pay for every missed meal break. Employees may bring unpaid meal breaks claims in court or before the Labor Commissioner.