What California Workers Need to Know About Wage and Hour Laws
California has complex wage and hour laws that are governed by the California Labor Code and Wage Orders issued by the now-defunct Industrial Welfare Commission.
These laws often contradict or are broader than federal law, so employers may have trouble knowing what is required of them.
However, employers cannot simply claim ignorance. If they fail to abide by state laws, they can face fines and lawsuits. Here we’ve addressed the basics of California wage and hour laws.
Which Employers Are Covered by California Law?
Some companies are headquartered in other states or have remote employees only. Therefore, determining if they are covered by California law can be tricky. The rule of thumb is that a California employer is defined as a business registered in California with at least one employee working in the State. This applies even if the company has no physical locations in California but has an employee working in the State.
What if a California employer has employees who work remotely in other states? Those employees, for the most part, would not be covered under California wage and hour laws. However, if these employees temporarily visit California for work assignments, they may be subject to the California Labor Code in some situations.
California Minimum Wage Laws
Now that we’re in the new year, the State minimum wage has increased. As of January 1, 2018, California employers with 25 or fewer employees must pay employees at least $10.50 an hour. For employers with more than 25 employees, the hourly minimum wage is $11 an hour. The federal minimum wage, however, has been at $7.25 an hour since 2009.
So which wage must employers abide by? In situations where the wages differ, the employee is entitled to the higher amount. Therefore, regardless of the federal minimum wage, employers must pay employees in California at least $10.50 or $11 an hour, depending on how many workers they employ. The State minimum wage law is an obligation that all California employers must abide by. No agreement can waive this requirement.
However, some workers are not covered under the minimum wage law. These include apprentices and salespeople. Student employees, camp counselors and some disabled workers may also be paid below minimum wage. Family members are not covered by wage and hour laws. Parents, spouses and children of employers are not considered employees, so the laws do not apply to them.
California Overtime Laws
Under California law, nonexempt employees that are age 18 or older, or minors age 16 or 17 who are not required to attend school, are required to receive overtime pay (or a “premium rate”) for working more than eight hours in one day or 40 hours in one seven-day week. Overtime pay is defined as 1.5 times the regular pay rate for every hour worked in excess of eight per day or 40 per week. This means that a worker paid $12 an hour would receive $18 an hour in overtime pay.
Double time also applies in two circumstances: when an employee works more than 12 hours in one workday or works more than eight hours on the seventh consecutive workday. Double time is twice the hourly pay, or $24 an hour for someone who typically makes $12 an hour.
Some classifications of workers are exempt from overtime. This often applies to salaried positions, as well as administrative, executive and professional employees. However, sometimes employers incorrectly classify employees as “exempt” from overtime laws in order to deny these employees overtime pay and other advantages of being “non-exempt.” In these situations, employees can sue to recover overtime that they were not paid.
Employee vs. Independent Contractor
California wage and hour laws apply to employees, but not every person who performs work duties for a company is considered an employee. Many people work as freelancers and therefore are classified as independent contractors. Independent contractors do not have set schedules and are typically paid by the job, meaning that they are not subject to wage and hour laws. They can be paid below minimum wage and are not eligible for overtime pay.
Because of this, many companies purposely classify employees as independent contractors to avoid paying taxes and having to comply with wage and hour laws. There is no concrete definition of the term “independent contractor.” Therefore, in cases involving wages and hours, enforcement agencies will look at several factors to determine if a person is an employee or independent contractor, such as:
- Does the employer control the worker’s hours and how the work is performed?
- Who supplies the office supplies and other tools needed to perform the work?
- Is the work the regular business of the employer?
- Are the worker’s duties a crucial part of the company?
- How long is the working relationship expected to last?
- How is the worker paid?
Payment Types and Timing
Under California law, employers are legally allowed to pay employees in cash or via check. With the employee’s consent, the employer may use direct deposit as well.
If you think you should be paid by a certain time of the month, you’re not alone. Employers must pay employees in a timely manner under California law. If you earned money between the 1st and 15th of the month, you must be paid by the 26th. Money earned between the 16th and last day of the month must be paid by the 10th of the following month. If you are paid on a different schedule—such as weekly or monthly—your employer must pay you wages owed within seven days following the end of the payroll period.
Are You a Victim of Wage and Hours Violations? Seek Legal Help
Wage laws are in place so that employees are paid fairly. However, not all companies follow these laws. While some employers are ignorant of the laws affecting them, others purposely pay employees low wages in order to save money.
Don’t let this happen to you. Whether you are paid below minimum wage or not being paid overtime, make sure you understand your legal rights. The Los Angeles employment law attorneys at Workplace Rights Law Group LLP can help. Contact us today to schedule a free case review by calling (818) 844-5200.