Understanding California Wage and Hour Claims and Statute of Limitations

California’s wage and hour laws are designed to protect employees from unfair practices related to wages, overtime, breaks, and work hours. These laws provide legal recourse for employees when employers fail to comply with fair compensation practices. Wage and hour claims have become increasingly common in recent years, reflecting growing awareness and enforcement of these protections. Employees who suspect that they are being underpaid or treated unfairly in terms of work hours and benefits may pursue a claim to recover lost wages and ensure fair practices in the workplace.

In this article, Nakase Wade, a California employer defense attorney for wage and hour claims, discusses common employer issues such as overtime and minimum wage violations, unpaid meal and rest breaks, employee misclassification, failure to reimburse work-related expenses, and unpaid off-the-clock work, including mandatory training, meetings, and lectures.

What Is a Wage and Hour Claim?

A wage and hour claim arises when an employee disputes the compensation they receive or the conditions of their employment regarding hours worked. Common grounds for these claims include issues such as unpaid overtime, minimum wage violations, missed meal and rest breaks, misclassification of workers, and withholding wages. Wage and hour claims are often complex, as they may involve multiple labor law violations, and typically require precise documentation of hours worked, payments received, and employment practices to support the employee’s case.

Employees who believe they have been wronged under wage and hour laws can file a claim against their employer. This type of claim is not only a means to recover wages lost due to improper wage policies but also a way to hold employers accountable for labor violations. In some cases, claims are pursued individually; in other instances, a group of employees may file a class action lawsuit if multiple workers are affected by the same unfair practices.

A San Diego employer defense attorney for wage and hour claims can advise common California employer issues, including employee misclassification, failure to reimburse work expenses, unpaid off-the-clock work (such as mandatory training and meetings), and overtime and meal/rest break violations.

Common Issues in Wage and Hour Claims

Employers may violate wage and hour laws in a variety of ways, whether intentional or accidental. Some of the most common issues that lead to wage and hour claims include:

Overtime and Minimum Wage Violations: California law mandates that employees must be paid at least the minimum wage and that eligible employees receive overtime pay for hours worked beyond a standard workweek or workday. Employers sometimes fail to pay overtime on time or miscalculate the amount, promising to make up the difference later.
Unpaid Meal and Rest Breaks: California labor laws require employers to provide specific meal and rest breaks for employees. Failure to provide these breaks or compensating employees improperly for missed breaks is a frequent basis for wage and hour claims.
Misclassification of Employees: Misclassifying employees as “exempt” (thus ineligible for overtime) or as independent contractors can result in lost wages for the worker. Incorrect classification impacts the employee’s rights to benefits and appropriate wages for hours worked.
Failure to Reimburse Work-Related Expenses: California employers must reimburse employees for expenses incurred in the course of their work, such as mileage, equipment, or work-related supplies. Failure to do so is grounds for a claim.
Work Performed Off-the-Clock: When employers require or allow employees to perform work outside their scheduled hours without compensation, this can violate wage laws, especially if those hours qualify for overtime.
Unpaid Training, Meetings, or Lectures: Employers must compensate employees for mandatory work-related training sessions, meetings, or any other tasks performed as part of their job duties.
Discrepancies Between Job Titles and Duties: Sometimes, an employee’s actual job duties do not align with their title, which can lead to disputes about the appropriate classification and compensation.

The U.S. Department of Labor reported a record-breaking $304 million in recovered wages owed to workers in 2018, illustrating the prevalence of wage theft and non-compliance. Even when wage discrepancies appear small, they can accumulate significantly over time, especially if the same practices affect multiple employees. Wage and hour laws are enforced to ensure employees receive full and fair compensation, even if employers are unaware that they are violating the law.

California’s Wage and Hour Statute of Limitations

California has specific statutes of limitations that govern when wage and hour claims must be filed. These deadlines vary depending on the nature of the claim, and missing these deadlines can result in the loss of the right to pursue the claim. The key statutes of limitations are as follows:

One-Year Limit: California law requires employers to provide employees with an itemized wage statement with each paycheck. Failure to comply with this requirement may result in a penalty, and employees have one year to file a claim based on this violation.
Two-Year Limit: If an employee’s claim is based on an oral contract with the employer (such as a verbal promise to pay above the minimum wage), the statute of limitations is two years. Under federal law, claims under the Fair Labor Standards Act (FLSA) also have a two-year statute of limitations, extendable to three years for willful violations.
Three-Year Limit: Most wage and hour violations in California fall under a three-year statute of limitations. This timeframe covers claims related to unpaid wages due to minimum wage or overtime violations, illegal paycheck deductions, unpaid reimbursements, missed breaks, and final wage penalties. For these claims, good record-keeping by the employee can significantly aid in building a strong case.
Four-Year Limit: If a claim is based on a written contract, the statute of limitations is four years. Additionally, if an employee alleges that their employer engaged in unfair business practices under California’s Unfair Competition Law, they may also benefit from a four-year limitations period.

Filing Claims with the California Department of Industrial Relations

Rather than pursuing a lawsuit in court, employees may file a claim with the California Labor Commissioner through the Department of Industrial Relations. This route provides an opportunity for resolution without formal litigation, as the Labor Commissioner will schedule a settlement conference between the employee and employer. If they cannot reach an agreement, the matter proceeds to a hearing, after which the Commissioner issues a ruling. Either party may appeal the ruling.

For claims filed with the California Labor Commissioner, the same statutes of limitations apply as they would in civil court cases. Employees have the option to represent themselves, though it is often beneficial to seek legal assistance to navigate the process and improve the likelihood of a favorable outcome.

Federal Wage and Hour Claims

For employees whose claims involve federal law, such as minimum wage and overtime issues under the FLSA, filing with the U.S. Department of Labor is an option. Although California state laws generally provide more protection than federal law, employees may benefit from the Wage and Hour Division’s investigation process, which can uncover broader patterns of wage violations.

The Department of Labor has recovered significant amounts in back wages for workers, demonstrating its role in addressing widespread wage and hour violations. However, due to the comprehensive protections under California law, state claims are often preferable for employees based in California.

The Role of Legal Assistance in Wage and Hour Claims

Wage and hour claims often involve detailed records and complex legal issues, especially when multiple claims are combined. Attorneys specializing in employment law can help employees identify applicable claims, gather evidence, and file the necessary paperwork. Legal representation is especially valuable in cases where the employer disputes the claim or refuses to negotiate.

In some cases, employees and employers reach a settlement, providing compensation and prompting the employer to improve its practices. While a settlement does not require the employer to admit wrongdoing, it can resolve the matter without further litigation and provide a favorable outcome for the employee.

Conclusion: Protecting Your Rights in California

Wage and hour laws in California are in place to ensure fair pay and treatment for employees. Due to strict deadlines and detailed requirements, employees are encouraged to act promptly if they suspect a wage violation. Pursuing a claim, whether through California’s Department of Industrial Relations or in court, can help employees recover owed wages and promote better workplace practices. For the best chances of success, consulting an experienced wage and hour attorney is recommended to help navigate the complexities of employment law and ensure timely filing of claims.