California has some of the strongest worker protection laws in the United States. Nonetheless, wage theft often happens in California.
Any time you work, and your employer doesn’t pay you according to the terms of your employment, your employer is engaging in wage theft. Fortunately, there are ways to protect yourself.
We’ve put together this guide to help you understand the state of wage theft in California based on our experience practicing employment law.
We’ll also explain what to do if your employer refuses to pay the wages they owe you.
What Is Wage Theft?
Wage theft occurs any time your employer intentionally withholds wages you have rightfully earned. California law specifies how and when employers should pay their employees and the penalties for non-compliance.
Examples of wage theft include:
- Being paid less than minimum wage per hour;
- Not being allowed to take meal breaks, rest breaks, or preventative cool-down breaks;
- Owners or managers taking tips;
- Bounced paychecks;
- Not being paid promised vacations or bonuses; and
- Not receiving final wages on time.
In 2012, the California legislature passed the Wage Theft Prevention Act. The Act amended the Labor Code to ensure employers pay judgments for wage theft.
Further, the Act requires employers to provide new employees with a wage theft prevention notice. The employer must give the notice in a language the employee can understand, and it must contain:
- The employee’s rate or rates of pay,
- The employee’s designated payday,
- The employer’s intent to claim allowances (meal or lodging allowances) as part of the minimum wage, and
- The basis of wage payment (whether paying by the hour, shift, day, week, piece, etc.), including any applicable overtime rates.
In addition, the notice must contain any “doing business as” names used by the employer.
Employers who change the information given in the notice have seven days to provide an updated notice or include the information in the employee’s pay stub.
How Does Wage Theft Differ from Overtime and Other Wage Violations?
The wage theft prevention notice required by the Wage Theft Prevention Act offers additional protection for employees. The employer must notify employees of their wage terms in writing in a language they can understand.
Once you understand your wage rate, you can track your hours worked and compare them to the hours on your paycheck.
Your notice should include all your wage rates, including multiple hourly or piece rates and overtime. If your records do not match the amount you receive, you may be a victim of wage theft.
Wage Theft Statistics in the U.S. and California
In 2019 alone, the U.S. Department of Labor cited nearly 8,500 employers for taking about $287 million from workers. But the Department issued citations to only one in four repeat offenders.
And only 14% of those were required to pay penalties in addition to the wages owed. Economists estimate that employer theft costs U.S. employees $15 billion a year (more than physical robberies).
Despite the high cost of wage theft, employees find it challenging to report and recover if their employer isn’t paying them properly.
Historically, low-income workers (those paid less than $14.00 per hour in 2020) are most at risk for wage theft. As of 2019, 27,531,138 total private-sector non-union workers in the United States earned less than $13 per hour.
The National Employment Law Project estimates that 26% of underpaid workers (over 4.6 million individuals) have experienced wage theft in the last year.
One study estimates that 372,000 minimum wage violations occur every week in California.
Minimum wage workers—for example, child care workers, gas station clerks, restaurant servers, and security guards—often lack bargaining power against their employers.
Further, from 2009 to 2019, a study based on Census Bureau data showed that immigrants and Latino workers were twice as likely to earn less than the minimum wage compared with white Americans.
And black workers were nearly 50% more likely to earn less than minimum wage. These workers fear retaliation, lack information about wage laws, and cannot take time away from work to attend hearings.
Out of an estimated 40,000 minimum wage violations in San Diego and Imperial counties in 2016, only 82 workers reported the theft.
How Can I Report Wage Theft?
The U.S. Department of Labor’s Wage and Hour Division enforces federal pay rules in California. The California Labor Commissioner’s Office enforces state labor requirements.
The Commissioner’s Office uses a hearing process to determine whether an employer owes wages and at what amount. Filing a wage claim online starts the process.
Next, the Office will host a settlement conference for you and your employer to attempt to reach an agreement. If you cannot agree, the office schedules a hearing, where a hearing officer will review the evidence and hear from witnesses.
The officer has 15 days from the hearing to make a decision, called an Order, Decision, or Award (ODA). Once you have an ODA, you can collect payment from your employer by writing a demand letter or placing a lien or a levy on company property.
How Can a Lawyer Help Recover Lost Wages?
If you have experienced wage theft in California, you don’t need to be afraid to report it. The law protects employees from retaliation, such as being fired or disciplined.
Unfortunately, even if reported, employers rarely pay for wage theft. Of the judgments made by the California Labor Commission between 2008 and 2011, 83% remain unpaid.
If you think you have a case, the experienced employment law attorneys at the Workplace Rights Law Group can help you secure the wages your employer rightfully owes.
Not only will we be here to support you, but we also have experience negotiating with large employers like Halliburton, G4S Wackenhut, and Circle-K stores (companies that have collectively stolen $22 million from their employees since 2005).
We won’t let your employer bully you. Instead, we will fight to secure your compensation and ensure that the company pays you what they owe.
Call us today for a free consultation and learn more about your options for enforcing your employment rights.