Both the Federal government and California have enacted comprehensive wage and hour laws establishing minimum wages, overtime compensation requirements, standards for working conditions, and restrictions on child labor to protect employees from oppressive working conditions.
The principal Federal law dealing with wages and hours is the Fair Labor Standards Act. The United States Department of Labor issues detailed regulations interpreting this law. In California, laws dealing with wages and hours are found in the Labor Code. Also, State agencies have issued what are called Wage Orders, which contain very specific requirements for employers.
Employers covered by Federal and State wage and hour laws must comply with both Federal and California laws. However, if the State law gives employees greater protection than Federal law, then the State law controls. This is especially true in California, where many requirements go well beyond Federal law.
The California Wage Orders are administrative regulations that set forth requirements for minimum wages, overtime compensation, and working conditions in various industries and occupations in California.
The following are twelve specific industries covered by Wage Orders:
The following are three Wage Orders which deal with specific occupations:
Finally, there is a minimum Wage Order requiring that every employer pay to each employee, excluding public employees and outside salespersons, no less than the current minimum wage for all hours worked. The general minimum Wage Order applies to employees not specifically covered by an industry or occupation Wage Order. However, the general minimum wage order does not apply to employees who are expressly exempt from all provisions, or from the minimum wage provisions, of a Wage Order otherwise covering those employees.
Some of the more important provisions of the Wage Orders are summarized here.
Various categories of employees are exempt from certain provisions of the Wage Orders, especially the overtime payment requirements of the Wage Order. For example, The Wage Orders do not apply to persons employed in administrative, executive, or professional capacities.
To qualify for the Executive Exemption, a person must
A person employed in an administrative capacity means any employee,
Finally, to qualify for the exemption, the employee must also earn a monthly salary equivalent to no less than two times the State minimum wage for full-time employment.
To qualify for the professional exemption, a person must be,
Further, to qualify for the exemption the person must customarily and regularly exercise discretion and independent judgment in the performance of the duties described above, and must earn a monthly salary equivalent to no less than two times the State minimum wage for full-time employment. However, the professional exemption does not apply to pharmacists, registered nurses, and other nurses engaged in certain specialized types of care.
An employee in the computer software field who is paid on an hourly basis is exempt, if all of the following apply:
Also, the exemption is not available for the following if,
The Wage Orders also do not apply to outside salespersons. An outside salesperson means any person, eighteen years of age or over, who customarily and regularly works more than half their working time away from the employer's place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.
The parent, spouse, child, or legally adopted child of the employer is also exempt from certain provisions of Wage Orders.
Employees cannot be employed more than eight hours in any workday or more than forty hours in a workweek unless the employee receives one and one half times such employee's regular rate of pay for all hours worked over forty hours in the workweek.
Eight hours of labor constitutes a day's work. Employment beyond eight hours in any workday or more than six days in any workweek is permissible provided the employee is compensated for such overtime at not less than,
The overtime rate of compensation required to be paid to a nonexempt full-time salaried employee is computed by using the employee's regular hourly salary as one-fortieth of the employee's weekly salary.
An employer can institute an alternative workweek (usually forty hours of work in four days) if the employer complies with very detailed provisions of the Wage Orders. These procedures include a requirement that two-thirds of the affected employees approve the arrangement through a secret ballot vote.
Employers must pay to each employee wages not less than seven dollars and fifty cents per hour for all hours worked.
The only exceptions to this requirement are learners. Employees during their first one hundred sixty hours of employment, in occupations in which they have no previous similar or related experience, may be paid not less than eighty-five percent of the minimum wage, rounded to the nearest nickel.
Employers must pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.
When an employee works a split shift, one hour's pay at the minimum wage must be paid in addition to the minimum wage for that workday, except when the employee resides at the place of employment.
Each workday an employee is required to report for work and does report, but is not put to work or is given less than half the employee's usual or scheduled day's work, the employee must be paid for half the usual or scheduled day's work, but in no event for less than two hours, nor more than four hours, at the employee's regular rate of pay, which cannot be less than the minimum wage.
Employers must keep accurate information with respect to each employee, including the following:
When a piece rate or incentive plan is in operation, piece rates or an explanation of the incentive plan formula must be provided to employees. An accurate production record must be maintained by the employer.
Every employer must semimonthly or at the time of each payment of wages provide each employee, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately, an itemized statement in writing showing:
All required records must be in the English language and in ink or other indelible form, properly dated, showing month, day, and year and must be kept on file by the employer for at least three years at the place of employment or at a central location within the State of California. An employee's records must be available for inspection by the employee upon reasonable request.
No employer must make any deduction from the wage or require any reimbursement from an employee for any cash shortage, breakage, or loss of equipment, unless it can be shown that the shortage, breakage, or loss is caused by a dishonest or willful act, or by the gross negligence of the employee.
When uniforms are required by the employer to be worn by the employee as a condition of employment, such uniforms must be provided and maintained by the employer. The term "uniform" includes wearing apparel and accessories of distinctive design or color.
This rule must not apply to protective apparel regulated by the Occupational Safety and Health Standards Board.
When tools or equipment are required by the employer or are necessary to the performance of a job, such tools and equipment must be provided and maintained by the employer, except that an employee whose wages are at least two times the minimum wage may be required to provide and maintain hand tools and equipment customarily required by the trade or craft.
The employer may require a reasonable deposit as security for the return of the items provided by the employer under this rule, upon issuance of a receipt to the employee for such deposit.
If an employer provides meals and/or lodging to employees, such meals or lodging may not be credited against the minimum wage without a voluntary written agreement between the employer and the employee. When credit for meals or lodging is used to meet part of the employer's minimum wage obligation, the amounts so credited may not be more than the amounts set out in a table contained in the Wage Order.
No employer can employ any person for a work period of more than five hours, without a meal period of not less than thirty minutes; except when a work period of not more than six hours will complete the day's work, the meal period may be waived by mutual consent of the employer and employee.
An employer may not employ an employee for a work period of more than ten hours per day without providing the employee with a second meal period of not less than thirty minutes, except that if the total hours worked is no more than twelve hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.
Unless the employee is relieved of all duty during a thirty minute meal period, the meal period must be considered an "on duty" meal period and counted as time worked. An "on duty" meal period must be permitted only when the nature of the work prevents an employee from being relieved of all duty, and when by written agreement between the parties an on-the-job paid meal period is agreed to. The written agreement must state that the employee may, in writing, revoke the agreement at any time.
If an employer fails to provide an employee a meal period, the employer must pay the employee one hour of pay at the employee's regular rate of compensation for each work day that the meal period is not provided.
In all places of employment where employees are required to eat on the premises, a suitable place for that purpose must be designated.
Employers must authorize and permit all employees to take rest periods, which insofar as practicable must be in the middle of each work period. The authorized rest period time must be based on the total hours worked daily at the rate of ten minutes net rest time per four hours or major fraction thereof.
However, a rest period need not be authorized for employees whose total daily work time is less than three and one-half hours. Authorized rest period time must be counted as hours worked for which there must be no deduction from wages.
If an employer fails to provide an employee a rest period, the employer must pay the employee one hour of pay at the employee's regular rate of compensation for each work day that the rest period is not provided.
Employers must provide suitable lockers, closets, or equivalent for the safekeeping of employees' outer clothing during working hours and when required, for their work clothing during non-working hours. When the occupation requires a change of clothing, change rooms or equivalent space must be provided in order that employees may change their clothing in reasonable privacy and comfort. These rooms or spaces may be adjacent to, but must be separate from, toilet rooms and must be kept clean.
However, this rule does not apply to change rooms and storage facilities regulated by the Occupational Safety and Health Standards Board.
Suitable resting facilities must be provided in an area separate from the toilet rooms and must be available to employees during work hours.
All working employees must be provided with suitable seats when the nature of the work reasonably permits the use of seats.
When employees are not engaged in the active duties of their employment and the nature of the work requires standing, an adequate number of suitable seats must be placed in reasonable proximity to the work area and employees must be permitted to use such seats when it does not interfere with the performance of their duties.
The temperature maintained in each work area must provide reasonable comfort consistent with industry-wide standards for the nature of the process and the work performed.
If excessive heat or humidity is created by the work process, the employer must take all feasible means to reduce such excessive heat or humidity to a degree providing reasonable comfort. Where the nature of the employment requires a temperature of less than sixty degrees Fahrenheit, a heated room must be provided that employees may use for warmth, and such room must be maintained at not less than sixty degrees Fahrenheit.
A temperature of not less than sixty degrees Fahrenheit must be maintained in the toilet rooms, resting rooms, and change rooms during hours of use. However, Federal and State energy guidelines must prevail over any conflicting provision of this section.
Adequate elevator, escalator, or similar service consistent with industry-wide standards for the nature of the process and the work performed must be provided when employees are employed four floors or more above or below ground level.
While an employee is employed, wages for most employees generally must be paid at least twice each month on dates designated in advance by the employer as regular paydays and published in a payday notice.
Employees who are covered by a collective bargaining agreement containing provisions regarding the time for payment of wages that differ from the Labor Code provisions are governed by the terms of that agreement.
All of a discharged or laid-off employee's earned and unpaid wages are due and payable at the time of the discharge or layoff, and must be paid at the place of discharge. The wages of an employee who resigns are due and payable no later than seventy-two hours after the resignation, unless the employee has given at least seventy-two hours notice of his or her intention to quit, in which case the final payment of all wages is due at the time of quitting. An employee who quits without providing a seventy-two hour notice is entitled to receive payment of wages by mail if he or she so requests and designates a mailing address. The date of mailing is deemed the date of payment for purposes of the requirement that wages be paid within seventy-two hours after notice of quitting. An employee who quits must be paid at the office or agency of the employer in the county where the employee worked.
Under California law, vacation pay is considered earned or accrued as time is worked. Thus, unless otherwise provided by a collective bargaining agreement, whenever an employment contract or employer policy provides for paid vacations, and an employee is terminated without having used his or her earned vacation time, all vested vacation must be paid to the employee as wages at his or her final rate in accordance with the provisions of the employment contract or employer policy regarding eligibility or time served. Furthermore, an employment contract or employer policy may not provide for forfeiture of vacation time on termination of employment.
However, an employer may put a cap on earning vacation time by establishing a "no additional accrual" vacation policy. Such a policy prevents an employee from earning vacation time over a designated limit. Once the employee has accrued vacation time to the limit, the employee cannot earn more time until the employee takes some of the accrued time.
If an employer willfully fails to pay wages that are due to a discharged employee or to an employee who quits, the employee's daily wages will continue as a penalty from the date that the wages were due until they are paid, up to a limit of thirty days.
Every employer must conspicuously post a notice stating the employer's regular pay days and the time and place of payment. The notice must be posted at the place of work, if practicable. Otherwise, it must be posted where it can be seen by employees as they come and go to work, or at the office or nearest agency for payment kept by the employer.
No employer, agent, or officer may issue any order, check, draft, note, memorandum, or other acknowledgment of indebtedness as payment of wages due, or to become due, or as an advance on wages to be earned, unless the instrument meets all of the following requirements:
The requirement that the address where the instrument is payable appear on it does not apply if the drawee is a bank and the instrument is payable at any of the bank's places of business.
Every employer is required to provide employees with an itemized statement of wages and deductions, either semi-monthly or at the time of each payment of wages, containing the following information:
A copy of either the itemized statement or a record of the deductions must be kept on file by the employer for at least three years at either the place of employment or a central location within California. The employer must afford a current or former employee the right to inspect and copy records of this information pertaining to that current or former employee, on reasonable request to the employer.
An employer who violates the itemized statement provisions of the Labor Code may face a civil penalty of two hundred fifty dollars per employee per violation in an initial citation and one thousand dollars per employee for each violation in a subsequent citation. In enforcing this provision, the Labor Commissioner has discretion not to penalize the employer for a first violation if the violation was due to a clerical error or inadvertent mistake. If an employer knowingly and intentionally fails to provide the required statement, an employee suffering an injury as a result of the failure may recover actual damages or one hundred dollars, whichever is greater, plus costs and reasonable attorneys' fees.
When there is a dispute about the amount of wages due, the employer must pay, without any condition, any part of the employee's wages that the employer concedes is due within the time limits set by law. As to any remaining balance claimed to be due, the employee may pursue any remedies available.
Assignments of wages are generally required to be in writing and to conform to the requirements of the Labor Code. However, the rules regarding assignments set out in the Labor Code do not apply to wage assignments made for child or spousal support, or wage assignments for payment of support of conservatee from community property of conservatee's spouse.
In addition, the rules governing wage assignments do not apply to deductions authorized by the employee for the following purposes:
In all other cases, a wage assignment is not valid unless the wages to be assigned have been earned at the time the assignment is made, unless the assignment (1) is for the necessities of life, (2) is made directly to the person providing those necessities, and (3) does not exceed the amount needed to provide those necessities.
No assignment of wages, earned or to be earned, is valid unless all of the following conditions are satisfied:
The employer may rely on the statements of fact in the written statement provided for by the Labor Code, without having to inquire into the statement's truth, and the employer incurs no liability whatsoever by reason of any payments made by the employer to an assignee under any assignment or order, in reliance on the facts so stated.
Except for proceedings by the State to collect a State tax liability and certain support proceedings, California law only permits garnishment of wages to enforce a judgment. Wages are exempt from prejudgment attachment. If more than one order is served on an employer with respect to the same employee, California statutory law sets forth the rules governing priority of orders based on the type of order, date of service, and date of judgment. Statutory limitations are also imposed on the amount of wages per workweek that may be subject to garnishment.
Federal law also contains restrictions on garnishment of wages as part of the Consumer Credit Protection Act. In general, the Federal provisions limit the amount of wages that may be garnished per week to a specified percentage of an employee's disposable earnings. The Consumer Credit Protection Act does not limit the amounts that may be withheld under a Federal Court Order pursuant to Chapter 13 of the Federal bankruptcy laws, however, or for any debt for State or Federal taxes. The Consumer Credit Protection Act is superseded by State laws that prohibit wage garnishment or that provide for more limited garnishment than is permitted under the Act.
Service of an earnings withholding order creates a lien, not only on the earnings of the judgment debtor-employee that must be withheld, but also on all property of the employer that is subject to enforcement of a money judgment, in an amount equal to the amount required to be withheld under the order. The lien continues for a period of one year from the date the earnings become payable to the employee, unless the amount that must be withheld pursuant to the order is paid as required by law.
Any contract between an employer and an employee concerning wage payments, hours, and other issues covered by California or Federal law must at least allow an employee to receive the protections of those laws. In other words, an employment contract may not require an employee to waive his or her rights to protection under these laws.
Among the deductions expressly required by law are:
Deductions also may be made for wage garnishments if strict procedures are followed. Under Federal law, deductions that have the effect of lowering the employee's wages below the rates required by the minimum wage and overtime provisions of the FLSA are not permitted.
Employers may deduct the following items from wages if authorized in advance by the employee in writing:
An employment relationship must exist for the California Wage Orders or the provisions of the Labor Code governing wages, hours, and working conditions to be applicable. Thus, no employment relationship exists if the individual performing services for a principal is an independent contractor. The critical legal distinction between employees and independent contractors is the right to control the manner and means by which the work is performed. A bona fide independent contractor is customarily engaged in an independently established business, and retains the right to control the manner in which he or she performs the contract. An employee, on the other hand, is subject to the absolute control and direction of the employer.
Bona fide independent contractor status is further evidenced by the presence of the following cumulative factors: