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Wage and Hour Red Flags
In today's litigious environment, many California employers, despite their best intentions, are frequently hit with costly wage and hour claims and lawsuits by their employees, as well as the Labor Commissioner's own enforcement agency. The Labor Commissioner is the appointed executive in charge of the Division of Labor Standards Enforcement (DLSE), the state agency responsible for enforcing California's labor laws. Some of these claims are legitimate, some are not, but employers must defend against all such claims, often incurring hefty attorneys' fees in the process. This article discusses some of the more common mistakes occurring in this minefield, and strategies to consider when such claims are filed.
Background
Before discussing specific problems and strategies, several general observations are in order. Broadly speaking, there are two practical rules governing wage and hour disputes in California:
- Practical Rule No. 1: 99% of wage and hour laws, both state and federal, favor the employee.
- Practical Rule No. 2: All deputy Labor Commissioners, trial and appellate courts, wage and hour employment attorneys, and some employers are aware of Rule No. 1.
Wage and hour litigation can be very expensive for employers for several reasons. First, most state wage claims have a three- or four-year statute of limitations, and many such claims, if successful, give rise to penalties, interest and “fee shifting,” i.e., an award of attorneys' fees by the court to the successful employee, paid by the employer, which thus often faces double attorneys' fees. (Labor Code statutory claims can go back three years from the date of the violation and such claims are also covered by the Unfair Competition Law, Business & Professions Code ' 17200 et seq., which provides for a four-year period in which to sue.)
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