California Wage & Hour Law 2021

California offers workers a robust net of wage and hour protections, including a healthy minimum wage, meal, rest, and recovery breaks, overtime pay, seventh-day pay, and wage statement law.  An employer that fails to pay minimum wage is guilty of wage theft.  Wage theft is a crime.  California employees may recover money damages for an employer’s failure to provide rest, meal, or recovery breaks, minimum wage, overtime pay, and other protections guaranteed under the California Labor Code.

Contact Astanehe Law today if you have any questions about wage & hour law or require legal representation to resolve a dispute regarding your pay or scheduling.

1. Minimum Wage

Although Congress mandates a federal minimum wage, California imposes a higher statewide minimum wage throughout the state. Effective January 1, 2021, California’s minimum wage for employers with 25 or fewer employees is $13.00 per hour.  Employers employing 26 or more employees must pay $14.00 per hour.  By 2023, California’s minimum wage will reach $15.00 per hour for all workers.

Locally, employees fare better as cities and counties mandate higher local minimum wage laws.  Under California law, employers must comply with the highest applicable minimum wage, which, if in existence, typical is the local government’s minimum wage.

Please note that the minimum monthly salary for sheepherders is set under IWC Wage Order 14-2001.  Therefore, the above minimum wage rates do not apply to individuals employed as sheepherders.  The Division of Labor Standards Enforcement (“DLSE”) defines sheepherders as, “[a]ny individual who tends flocks of sheep grazing on range or pasture; who moves sheep to and about an area assigned for grazing; who prevents sheep from wandering or becoming lost, or uses trained dogs to round up strays and protect sheep against predators and the eating of poisonous plants; who assists in the lambing, docking and shearing of sheep; who provides water or feeds sheep supplementary rations; and who performs such duties pursuant to an approved order filed under the federal “H2A” program or any successor program.”  Effective January 1, 2021, the minimum monthly salary for sheepherders is $2,488.97 per month for employers with 26 or more employees, and $2,311.24 per month for employers with 25 or fewer employees.

2. Coronavirus/COVID-19 Pandemic Hazard/Hero Pay

In response to the Coronavirus/COVID-19 pandemic, cities across California are enacting hazard or hero pay to ensure frontline essential workers receive fair compensation for the hazards faced at work.  To adjust for the Coronavirus/COVID-19’s increased risk, local hazard/hero pay ordinances increase the minimum wage for certain workers, typically working in large grocery and retail pharmacy establishments.  All of the local hazard pay ordinances are temporary.  And, barring extension, they will sunset by Summer 2021.

3. California Wage & Hour Laws

Both federal and state governments regulate employee shifts, scheduling, wage pay, and other employment relationship elements, collectively known as wage and hour law.  Several local governments may also regulate wage and hour rules, including San Francisco.  This article primarily covers the California Labor Code and Wage Orders from the Industrial Welfare Commission, which set forth the law governing wage and hours throughout the state.  Employers must comply with these laws and orders.  Further, employers must post wage orders where employees may easily read them while at work.  Typically, employers post a standardized poster printed by the Division of Labor Standards Enforcement in break rooms or online.

i. Employment Records

Employers must maintain records of the names and addresses of all employees, the ages of employed minors, and all employees’ daily hours worked and wages paid.  California Labor Code §§ 226, 1174 – 1175.  Employers are required to maintain these records for at least two years.  Id. at 226(a).  Employers must keep records detailing wage deductions for at least three years.  Id. at 1174(d).  If you suspect your employer is not keeping adequate records, or need the records for a lawsuit or administrative hearing, you can request record inspection at any time.  The inspection may occur at the worksite, or the employer may send copies of your records.

ii. Overtime Pay

Federal and state statutes and wage orders set the standards governing overtime compensation payment. 29 U.S.C. § 207; 29 C.F.R. § 541.0 et seq.; California Labor Code § 510 et seq.; 8 C.C.R. § 11010 et seq.  Under California law, the most employee-favorable overtime pay law is applicable.

Overtime compensation is based on a multiple of an employee’s regular rate.  In California, employers must pay at least one and a half times the employee’s regular rate for hours worked over forty hours per week or more than eight hours per day.  California Labor Code § 510(a).  Additionally, employers must pay employees double their regular hourly rate for work over twelve hours per day.  Id.

Although employers are free to designate any day as the start of the work week for scheduling and compensation purposes, they are not permitted to do so to avoid the obligation to pay overtime.  Seymore v. Metson marine, Inc., 194 Cal. App. 4th 361, 371 (2011).

Contact Astanehe Law if you believe that your employer has failed to pay you overtime pay under the law, or has manipulated scheduling to avoid their obligation to pay overtime.

iii. Paystubs

California regulates your paystubs, also referred to as wage statements.  Employers must provide paystubs under the California law.  California law requires employers to produce pay stubs containing the following information:

•             The employer’s name and address;
•             The employee’s name and the last four digits of their social security number;
•             The inclusive dates for which the employee is being paid;
•             The employee’s gross wages earned;
•             The applicable hourly rate and total hours worked for hourly employees;
•             All withheld deductions;
•             The employee’s net wages earned; and,
•             If the employer is a temporary agency, the pay stub must include the rate of pay and total hours worked for each temporary job the employee held during the pay period.

Where an employer pays an employee additional money to cover business expenses, the employer is obligated to reimburse the employee promptly under California Labor Code section 2802.  The employer should separately identify the amounts for business expense reimbursement and labor performed.  California Labor Code § 226(a); Gattuso v. Hale-Hanks Shoppers, Inc., 42 Cal. 4th 554, 573 (2007).

Not surprisingly, employers do not always comply with California pay stub laws.  If your employer has violated these laws, you may be entitled to injunctive relief, as well as money damages.  When your employer commits knowing and intentional violations of California wage statement law, they may be required to pay you the greater of either actual damages or $50.00 for the initial pay period in which a violation occurs.  If the violation spans multiple pay periods, your employer may be required to pay $100 for each subsequent violation.  Total damages shall not exceed $4,000.  The law also awards a successful employee their reasonable attorney fees and court costs.  California Labor Code § 226(e), (g).

iv. Tips

Under California law, tips are the sole property of employees, and not employers.  Employees earning tips must be aware that employers, including managers, may not take any portion of tip money given to employees by customers.  California Labor Code § 351.  However, employers can institute a tip pool to include all employees.  Leighton v. Old Heidelberg, Ltd., 219 Cal. App. 3d 1062, 1068 (1990).

Where a customer pays by credit card, the employer must give one hundred percent of the tip to the employee. California Labor Code § 351.  The employer may not deduct for credit card processing fees, or any credit card-related costs.  Id.  Further, California employees must receive their tips paid via credit card by the next payday following the day the employee earned the tip money.  Id.

If your employer has misappropriated your tips, consider filing a claim at the IWC or initiating a lawsuit in court.  Contact Astanehe Law today to learn more.

v. Shifts

The California Labor Code requires employers to pay employees who work a split shit an additional hour’s pay at minimum wage.  8 C.C.R §§ 11010 – 11150.  A split shift occurs when an employee’s schedule is interrupted by nonpaid work periods established by the employer.  This requirement applies to employees who earn more than minimum wage. However, these employees are only entitled to the difference between what they earn and would have earned had they been paid minimum wage for their entire shift plus an extra hour.  Aleman v. AirTouch Cellular, 209 Cal. App. 4th 556, 575 (2012).

The requirement to pay an enhanced minimum wage does not apply to an employee residing on the employer property.

vi. Standby or On Call Time

Standby and on-call time are compensable if spent, “primarily for the benefit of the employer and [their] business.”  Armour & Co. v. Wantock, 323 U.S. 126, 132 (1944).  The prototypical example of compensable on-call time is firemen on call at the fire station.  Courts utilize several factors in determining whether such time is compensable, including the nature of the parties’ agreement, and the degree to which the employee is free to engage in personal activities while on call or standby.

Certain local governments have passed laws regulating standby and on-call time.  San Francisco, for example, has detailed requirements regarding many aspects of on-call pay for full and part-time workers at “Formula Retail” employers.  Formula Retail employers are San Francisco businesses that have at least forty stores worldwide.  Most critical is the requirement that Formula Retail employers pay their employees for two hours’ wages where the on-call shift lasted four or fewer hours.  If the on-call shift exceeded four hours, employers must pay four hours’ wages.  San Francisco Police Code, Article 33F, 33G.

vii. Commuting

Although California employees spend record amounts of time commuting to and from work, travel time between home and work is generally not compensable.  29 U.S.C. §§ 251 – 262.  Nevertheless, travel time may be compensable if the travel involves a special one-day assignment in another city, or at another job site, or for specialized training.  29 C.F.R. § 785.37.

viii. Job Set Up and Prep Time

Preparation activities that are an integral part of the employee’s principal activity are compensable as time worked.

ix. Seven Day Workweeks

Every employee is entitled to one day’s rest in seven.  To ensure employees receive their day off, the Labor Code prohibits employers from requiring employees to work more than six days in seven.  California Labor Code §§ 551 – 552.  Employers must inform California employees of their right to a day of rest, and to maintain neutrality should an employee exercise that right.  Mendoza v. Nordstrom, Inc., 2 Cal. 5th 1074, 1091 (2017).  Civil penalties are recoverable for violations of the right to rest. California Labor Code § 558.

x. 72 Hour Cap

Employers cannot terminate employees who refuse to work more than 72 hours in a single week.  8 C.C.R. § 11040.  However, an employer can require an employee to work more than 72 hours during periods of emergency.

4. Meal, Rest, and Recovery Breaks

Under California law, every employee is entitled to meal, rest, and recovery break periods.  8 C.C.R. §§ 11010 – 11150.  Employers must provide paid rest periods lasting at least ten minutes of rest for every four hours worked.  Where an employee’s shift is fewer than four hours, the employer must provide a ten-minute rest period after three and a half hours.  Id.  To the greatest extent possible, employers must provide rest periods in the middle of an employee’s shift.  Id.

Employees who work outdoors are afforded a recovery break to cool down and prevent heat illness.  California Labor Code § 226.7(a). Employers must allow and encourage recovery breaks.  Id.  These breaks must be at least five minutes long.  Id.  Relatedly, California employees are entitled to free and conveniently accessible drinking water. California Labor Code § 2441(a).

Employers cannot require employees to be on-call during rest and recovery breaks.  California Labor Code § 226.7(b), (c).

Where an employer fails to provide a rest or recovery period, the employee is owed one additional hour of pay at their regular hourly rate for each day that an employer failed to provide a rest period.  California Labor Code § 226.7(c).

Employees have three years to bring a claim against their employer for failure to provide mandated rest and recovery breaks.  California Code of Civil Procedure § 338(a).  However, the statute of limitations increases to four years in certain situations.  Business & Professions Code § 17200 et seq.

If an employee works more than five hours in one day, they are entitled to a meal break of at least thirty minutes in length.  If the employee works more than ten hours in a day, they are entitled to a meal break of at least one hour in duration.  California Labor Code § 512(a).  Unlike rest and recovery breaks, meal breaks are unpaid.  8 C.C.R. § 11010 et seq.

Employers who fail to provide legally required meal breaks must pay one additional hour of pay at the aggrieved employee’s regular rate of pay for each day a meal break was not provided. California Labor Code § 226.7(c). 

If your employer fails to provide legally required meal, rest, and recovery breaks, you may have a legal claim against your employer.  You have rights, and your employer may be liable for money damages.  Contact Astanehe Law to learn about your rights and your potential remedies.

5. Enforcement & Remedies

Aggrieved employees may obtain judicial relief by filing a civil action in court based on breach of contract or a statutory violation.  For wage and hour violations, the court does not require employees to exhaust their remedies, which would require the filing of a wage claim at the Labor Commissioner.  However, employees retain discretion to obtain such administrative redress.

Remedies for wage and hour claims include wages due and owed, other forms of compensation (commissions, bonuses, benefits, and vacation pay), statutory penalties, injunctive relief, interest, court costs, and attorney fees.  California Labor Code §§ 218.5(a), 1194(a).  However, attorney fees are not recoverable in an administrative proceeding to recover overtime compensation.  California Labor Code § 87.2(c).  Here, attorney fees are awarded only for a successful appeal of a Labor Commissioner’s order.  Punitive damages are not available for wage and hour claims.  Brewer v. Premier Golf Properties, LP, 168 Cal. App. 4th 1243 (2008).

Employees considering legal action against their employers should consider that a successful employer can get a fee award against the employee-plaintiff if the court finds that the employee brought the action in bad faith.  California Labor Code § 218.5(a).

Astanehe Law Knows Employee Rights

Astanehe Law has experience handling California Wage & Hour claims.  Michael Astanehe has recovered millions on behalf of Californians.  If your employer routinely flouts California Wage & Hour laws – including by failing to provide rest, recovery, and meal breaks, or pay minimum wage – contact Astanehe Law to discuss your options with an experienced California employment law attorney.