Wage theft is the illegal practice of not paying workers for all their work, and it encompasses many forms of wage law violations. In California, tens of thousands of workers lose millions of dollars to wage theft by employers every year. This guide covers some of the most common areas: minimum wage, overtime, tips, meal and rest breaks, reimbursements, and employee misclassification.
Minimum wage laws set the floor for hourly pay. California's minimum wage is significantly higher than the federal minimum, and many cities and counties set it even higher. Employers must adhere to whichever minimum is most favorable to the employee — and these minimums apply to adults and minors alike. Employers cannot force employees to agree to a pay rate lower than the applicable minimum wage.
For example, if you work at a retail store in San Francisco where the local minimum wage is higher than the state minimum, but your employer pays you only the state rate, the difference in pay for every hour you work is wage theft.
Workers protected by overtime laws are called nonexempt employees. Exempt workers — salaried managers and certain professionals — are not entitled to overtime.
Nonexempt employees are entitled to 1.5 times their regular rate for all hours over 8 in a day or 40 in a week. They're owed double time — 2 times the regular rate — for all hours over 12 in a single day. If a nonexempt employee works all 7 days in a week, the first 8 hours on the 7th day are paid at 1.5 times, and anything over 8 hours on that 7th day is double time.
If your employer pays you your flat rate for a 10-hour shift instead of calculating the overtime, the underpayment is wage theft.
In California, tips belong to the employees. Employers and their agents — including managers — cannot take a portion of employee tips for themselves. This is known as a tip credit, and it's unlawful.
Employers can implement a tip pool where employees share tips among each other, but even in a tip pool, management cannot participate and take a share.
Most workers must receive a 30-minute unpaid meal break when working more than 5 hours per day, and an additional 30-minute meal break when working more than 12 hours. They must also receive a paid 10-minute rest period for every 4 hours worked.
These breaks must be uninterrupted — your employer cannot ask or expect you to work during them. If the employer doesn't provide a break, they must pay one hour of premium pay for each missed meal break and one hour for each missed rest break during a day.
If your manager asks you to push your lunch until the afternoon rush subsides and you end up taking it after 5 hours of work, you're owed an extra hour of pay.
Employers must generally reimburse employees for expenses reasonably necessary for the job. For employees who drive their personal car, this includes mileage reimbursement. For employees who use their personal cell phone for work, it can include data plans. Remote or hybrid workers must be reimbursed for necessary expenses like computers, accessories, and internet access.
That said, employers can require prior approval before purchases and set reasonable limits on quality, brand, or price. But they can't refuse to reimburse expenses that are necessary for you to do your job.
Sometimes the way a worker is hired sets up a pattern of ongoing wage theft. Employers sometimes classify workers as independent contractors rather than employees to avoid providing wage protections. Similarly, employers misclassify workers as exempt — putting them on salary even though their actual duties are the same as nonexempt employees — to avoid paying overtime.
If you were promoted to a supervisory title but spend 90% of your time doing the same work as hourly employees, and you're no longer getting overtime for 60-hour weeks, that misclassification is a form of wage theft.
Many times, wage theft goes unreported because employees simply don't know they're entitled to more. If you routinely examine your pay stubs and something doesn't add up, contact an attorney to discuss your options.
At Arns Davis Law, our attorneys routinely litigate wage theft cases, including through representative enforcement actions under the Private Attorneys General Act. Call us at (415) 495-7800 for a free consultation.
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