Penalties and Violations of the Fair Labor Standards Act
The basic premise is that the employer is responsible for keeping records.
Wage theft = liquidate damages for every $1 dollar you owe; the penalty is 3 dollars.
Below is the schedule of different cities that have a minimum wage higher than the state of California. Employers need to pay attention to the changes and adjust their pay. Paying less than minimum wage is considered wage theft.
Schedule for California Minimum Wage rate 2017-2023.
|Date||Minimum Wage for Employers with 25 Employees or Fewer||Minimum Wage for Employers with 26 Employees or More|
|January 1, 2017||$10.00/hour||$10.50/hour|
|January 1, 2018||$10.50/hour||$11.00/hour|
|January 1, 2019||$11.00/hour||$12.00/hour|
|January 1, 2020||$12.00/hour||$13.00/hour|
|January 1, 2021||$13.00/hour||$14.00/hour|
|January 1, 2022||$14.00/hour||$15.00/hour|
|January 1, 2023||$15.00/hour|
2018 MINIMUM WAGE RATES
California state: $11.00/hr (26 or more employees) or $10.50/hr (25 or fewer)
Berkeley: $13.75/hr effective 10/1/17. $15.00/hr effective October 1, 2018.
Cupertino: $13.30/hr effective 1/1/18.
El Cerrito: $13.60/hr effective 1/1/18.
Emeryville: $15.20/hr for 56 or more employees as of 7/1/17 and $15.60/hr on 7/1/18. For 55 or fewer, $14.00/hr on 7/1/17 and $15.00/hr per hour on 7/1/18.
Los Altos: $13.50/hr effective 1/1/18.
Los Angeles: Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr on 7/1/18.
Los Angeles County: Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr on 7/1/18.
Malibu: Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.24/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr on 7/1/18.
Milpitas: Increase to $12.00/hr on 1/1/18.
Mountain View: Increase to $15.00/hr on 1/1/18.
Pasadena: Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr per hour on 7/1/18.
Palo Alto: Increase to $13.50/hr.
Richmond: Increase to $13.00/hr on 1/1/18.
San Diego: $11.50/hr.
San Jose: $13.50/hr.
San Leandro: Increase to $13.00/hr on 7/1/17 and increase to $13.00/hr on 7/1/18.
San Mateo: Increase to $13.50/hr on 1/1/18. For non-profits, increase to $12.00/hr on 1/1/18.
Santa Clara: $11.00/hr.
San Francisco: Increase to $14.00/hr as of 7/1/17. Increase to $15.00/hr on 7/1/18.
Santa Monica: Increase to $12.00/hr on 7/1/17 for 26 or more employees and increase to $13.25/hr on 7/1/18. For 25 or fewer, $10.50/hr on 7/1/17 and $12.00/hr per hour on 7/1/1.
Sunnyvale: Increase to $15.00/hr on 1/1/17.
Employers that make deductions from pay have to make sure that those deductions do not cause the employee to earn less than minimum wage.
Calculating Overtime: There are two methods of calculating the regular rate of pay. The employer must pay the employee the correct pay. The regular rate of pay is combining bonus and incentive pay with employee base pay for the purpose of paying overtime. You determine the regular rate of pay so you can calculate the overtime.
Regular Rate of Pay for non-productive bonus:
Base rate: $10.00 per hour X 85 hours = $850.00.
Bonus pay of $15.00 / 80 hours = $0.1875 / hour.
Regular rate = $10.00 base + $0.1875/hour bonus = $10.1875.
So, that employee would earn: 80 hours at straight time of 10.00 / hour = $800, plus Bonus of $15.00, plus Overtime pay of 1.5 x 5 hours x $10.1875 per hour = $76.41. Total pay: $891.41.
Regular rate of pay for productive bonus:
Base rate: $10.00 per hour X 85 hours = $850.00.
Plus bonus ($15.00) = $865.00 / 85 hours worked = $10.176 / hour as the regular rate.
For an employee who worked 5 hours of “time and a half” overtime (as in the example above), the employer would owe: 80 hours at straight time of 10.00 / hour = $800, plus Bonus of $15.00, plus Overtime pay of 1.5 x 5 hours x $10.176 per hour = $76.32 Total pay: $891,32.
Failure to pay the regular rate of pay correctly results in wage theft, paystub violations, and underpayment of overtime results in additional 30 days of pay for terminated employee. https://www.dir.ca.gov/dlse/FAQ_Overtime.htm
Meal and Rest Periods: https://www.dir.ca.gov/dlse/FAQ_Overtime.htm If an employer fails to provide an employee a meal period in accordance with an applicable IWC Order, the employer must pay one additional hour of pay at the employee’s regular rate of pay for each workday that the meal period is not provided. IWC Orders and Labor Code Section 226.7 This additional hour is not counted as hours worked for purposes of overtime calculations.
Deductions from pay: All deductions should be authorized from employee’s paycheck, and listed on the paystub. In addition, there should be a signed authorization to deduct in their personnel folder.
a. Gratuities. An employer cannot collect, take, or receive any gratuity or part thereof given or left for an employee, or deduct any amount from wages due an employee on account of a gratuity given or left for an employee. Labor Code Section 351 However, a restaurant may have a policy allowing for tip pooling/sharing among employees who provide direct table service to customers.
b. Photographs. If an employer requires a photograph of an applicant or employee, the employer must pay the cost of the photograph. Labor Code Section 401
c. Bond. If an employer requires a bond of an applicant or employee, the employer must pay the cost of the bond. Labor Code Section 401
d. Uniforms. If an employer requires that an employee wear a uniform, the employer must pay the cost of the uniform. Labor Code Section 2802, Industrial Welfare Commission Orders, Section 9. The term “uniform” includes wearing apparel and accessories of distinctive design and color.
e. Business Expenses. An employee is entitled to be reimbursed by his or her employer for all expenses or losses incurred in the direct consequence of the discharge of the employee’s work duties. Labor Code Section 2802
f. Medical or Physical Examinations. An employer may not withhold or deduct from the wages of any employee or require any prospective employee or applicant for employment to pay for any pre-employment medical or physical examination taken as a condition of employment, nor may an employer withhold or deduct from the wages of any employee, or require any employee to pay for any medical or physical examination required by any federal or state law or regulation, or local ordinance. Labor Code Section 222.5
Pay at Termination: In general, an employee who is fired must be paid all unpaid wages that have been earned up to and including the date of termination. That payment must be made on the same day that the employee is terminated. Resignations: Employees who quit and give notice at least 72 hours before their last day of work must be paid their final wages on their last day, assuming it is the day stated in the notice.
Vacation Pay: California law regards a paid vacation as a form of wages. Paid vacations are compensation for labor the employee performs, but the payment is delayed until the employee takes the vacation.
Reimbursement for use of cell phones: In Cochran v. Schwan’s Home Services, Inc., 228 Cal. App. 4th 1137 (2014), the California court of appeals held that employers must reimburse a “reasonable percentage” of their employees’ cell phone bills. Case law since Cochran has repeatedly reinforced the takeaway that an employer must reimburse a “reasonable” amount without actually explaining how to calculate that amount.
Paystubs: LC 226 requires employers to provide employees with a paystub. The itemized paystub must have the following information to be in compliance. The DSLE has sample paystubs for piece workers and hourly workers available on their website. Failure results in $100 penalty for the first and $50 for each subsequent occurence, to a maximum of $4,000. https://www.dir.ca.gov/dlse/FAQ_Paydays.htm