Wage and hour laws govern issues like minimum wage and overtime pay. Federal law sets the minimum wage at $7.25 per hour nationwide for many employees, but states may establish their own higher minimum wage. California is on its way to having a $15 per hour minimum wage by 2023. In other areas as well, the state's wage and hour laws generally provide greater protections for workers—and hold employers to higher standards—than federal law.
The current federal minimum wage of $7.25 per hour has remained unchanged since 2010, although many states have seen large increases over that time.
For tipped employees, such as restaurant servers, federal law requires employers to pay $2.13 per hour. If the amount of tips an employee receives is not enough to take their total pay to the $7.25 minimum wage (or a higher state minimum wage), the employer must pay the difference. This is known as a "tip credit." If a server's total tips for a 40-hour week average more than $5.12 per hour, the employer is only obligated to pay the $2.13 base rate. If, however, the tips average, for example, $4.00 per hour, the employer must pay the server $3.25 per hour.
Under federal law, "overtime" refers to time worked by an employee in excess of 40 hours in a week. An employer must pay an employee at a rate equal to one-and-a-half times their normal rate of pay for overtime. If an employee normally receives $10 per hour, their overtime rate would be $15 per hour. If that employee works fifty hours in a regular week, they would be entitled to $400 in regular wages, and $150 in overtime pay.
Many employees are exempt from the FLSA's minimum wage and overtime provisions. This includes "any employee employed in a bona fide executive, administrative, or professional capacity." Employees who receive salaries instead of hourly wages are often considered exempt, although the fact that someone is paid a salary is not sufficient by itself to establish an exemption.
California's wage and hours laws only apply to non-exempt employees. The exemptions under California law are similar to the FLSA's exemptions, including executive, administrative, and professional employees.
Employers might try to get around wage and hour laws by classifying workers as "independent contractors" when they are actually employees. The California legislature has enacted a broad definition of "employee," partly in order to avoid misclassification issues. A worker is considered an "employee" unless they meet all three of the following criteria:
In 2020, California has two minimum wages: one for small employers with 25 or fewer employees and another for larger employers. For small employers, the minimum wage is $12.00 per hour. Large employers with more than 25 employees must pay a minimum wage of $13.00 per hour.
The minimum wage in California will increase in 2021 to $13.00 and $14.00 per hour for small and large employers, respectively. The following year, the rates will increase to $14.00 and $15.00 per hour. Finally, in 2023, all employers will be required to pay a minimum wage of $15.00 per hour.
Unlike the FLSA, California's wage and hour laws do not allow tip credits. Employers must pay tipped employees at the same minimum rate as other employees.
Employees in California are entitled to receive time-and-a-half for work in excess of 40 hours in a week. California law, however, goes beyond what the FLSA requires at the federal level in the following ways:
California employers must allow employees to take an unpaid half-hour break after five hours of work. If an employee must work more than 10 hours, the employer must provide them with a second 30 -minute break. Employees may take a 10 -minute paid break for every four hours that they are on duty.
If an employee's total shift is no longer than six hours, the employee can waive their right to a half-hour break during that shift. If the total length of a shift does not exceed 12 hours, the employer isn't required to provide a second half-hour break. Employers must provide regular 10-minute rest breaks whenever an employee works at least four hours.
Wage theft, or the wrongful withholding of wages by an employer, causes billions of dollars in financial losses every year. If you believe your employer has violated state or federal wage and hour laws, you should consult with an employment attorney to learn more about your options.
The Wage and Hour Division of the U.S. Department of Labor and California's Division of Labor Standards Enforcement recover millions in unpaid wages each year. You might be able to file an administrative complaint with one of these agencies, or you may be able to file a lawsuit to recover your wages and other damages. Again, speak with an employment lawyer to discuss your legal options.