Bringing a Claim for Unpaid Wages and Unpaid Overtime in Court / DLSE
Two of the Most Common Reason That Employees are Not Paid Overtime Properly
The most common reason for not being paid overtime in California is misclassification of an hourly employee as salaried/exempt. Generally, to fall into the administrative/executive exemption, you have to be paid at least twice the minimum wage and 51% or more of your duties have to be related to discretionary managerial decisions, requires certain expertise and independent judgment, such as hiring/firing employees, supervision, and control over company policies/decisions. Many employers, in an attempt to avoid paying overtime interpret the "managerial duties" way too broadly, sometimes to the degree of absurd. In one of our cases, an employer argued that their receptionist was exempt, because she exercised independent judgment of when to send e-mails about incoming messages to the employees in the office, when to take her breaks, and how to organize her desk. Not being able to resist the temptation to be sarcastic, I commented in response: "You forgot to mention that she also independently decided when and how to breathe" The judge laughed, nodding at the ridiculousness of the employer's argument.
The second common reason for not being paid overtime is misclassificaiton of an employee as an independent contractor. Many employers doesn't realize that simply calling their worker and independent contractor and having them sign an independent contractor agreement does not determine their employee/contractor status. The most important criteria is the degree of control that the employer has over the manner in which their worker performs his job duties. Generally, a worker who has work hours set by the employer, who uses the employer's facilities and equipment to perform his work and whose work is supervised by the employers cannot be a contractor. This pretty much includes any office employee who has regular work hours, such as secretary, administrative/executive assistant, etc. Such individuals would be entitled to overtime if they work over 8 hours a day or over 40 hours a week, just like any other employee in California, except those who are specifically exempt from overtime.
Presenting Unpaid Overtime Claim to the Labor Commissioner's Office / DLSE
One of the more simple and more efficient ways to pursue a claim for unpaid wages or unpaid overtime, failure to provide rest breaks and meal breaks, failure to reimburse for business expenses, and failure to pay earned commissions is by submitting a wage claim to your local DLSE office (Department of Labor Standards Enforcement). California Labor Board website contains detailed information about filing a wage claim.
Their site also include a link to the wage claim form which the claimant needs to fill out properly, submit any supporting evidence and mail to their local DLSE office. The Department will then schedule a conference where both parties (the employee and the employer) will have the opportunity to present their side of the story to the agency's deputy and try to informally settle the claim. In many ways, the labor board conference meeting is just like mediation.
If the claim is settled, the parties will sign the appropriate papers, will agree on the terms of payment (amount, timeline, etc...) and the case will be closed upon the confirmation to the labor board that the payment agreed upon has been received. The terms of the agreement are strictly enforced, and if the employer fails to pay the amount agreed upon by the stated deadline, a fully amount claim will automatically becomes that claim's judgment. Like with mediation, the advantages of setting the wage claim at a conference is having the benefit of early resolution, and certainty of the outcome, especially considering the fact that in many counties the hearings are set 6 months or longer after the unsuccessful conference.
If the claim is not settled during the conference, then the Department will schedule a hearing during which the parties will have the opportunity to present their side of the story, present their evidence, make their arguments, cross-examine each other, and let the judge rule on the claim. The judgment of the labor board will become the final judgment, which is as binding as any court judgment, unless appealed within 10 days.
The advantages of the labor board process over the civil lawsuit in court for unpaid wages is that the labor board track is much more simple and cost effective. However, every claimant who believes that he/she has a claim for a significant amount of money (over $5,000) is advised to, at least, consult an attorney in order to evaluate their case and also determine whether they could benefit from being represented by an attorney in the labor board proceedings.
Filing a Lawsuit for Unpaid Overtime in Court
For a number of strategic reasons, you may choose to file a lawsuit for unpaid overtime instead of a DLSE claim. Specifically, a lawsuit is a better option if one or more of the following apply to your potential claim:
Before you decide on where and how to file a claim for unpaid wages and overtime, you should consult with an experienced employment attorney about which option is best for you in light of your specific circumstances.
Additional Useful Information About Wages and Compensation Laws in California
Should You Be Paid for On-Call Time - an article discussing when an employee is entitled to be paid for on-call time (i.e. security guards, ambulance drivers, police officers, etc).
And if the amount of unpaid wages that your (former) employer owes you is just a few hundred to a few thousand dollars at the time you resign or you are terminated, makes sure you read our article on how to recover a small amount of unpaid wages.
The most common reason for not being paid overtime in California is misclassification of an hourly employee as salaried/exempt. Generally, to fall into the administrative/executive exemption, you have to be paid at least twice the minimum wage and 51% or more of your duties have to be related to discretionary managerial decisions, requires certain expertise and independent judgment, such as hiring/firing employees, supervision, and control over company policies/decisions. Many employers, in an attempt to avoid paying overtime interpret the "managerial duties" way too broadly, sometimes to the degree of absurd. In one of our cases, an employer argued that their receptionist was exempt, because she exercised independent judgment of when to send e-mails about incoming messages to the employees in the office, when to take her breaks, and how to organize her desk. Not being able to resist the temptation to be sarcastic, I commented in response: "You forgot to mention that she also independently decided when and how to breathe" The judge laughed, nodding at the ridiculousness of the employer's argument.
The second common reason for not being paid overtime is misclassificaiton of an employee as an independent contractor. Many employers doesn't realize that simply calling their worker and independent contractor and having them sign an independent contractor agreement does not determine their employee/contractor status. The most important criteria is the degree of control that the employer has over the manner in which their worker performs his job duties. Generally, a worker who has work hours set by the employer, who uses the employer's facilities and equipment to perform his work and whose work is supervised by the employers cannot be a contractor. This pretty much includes any office employee who has regular work hours, such as secretary, administrative/executive assistant, etc. Such individuals would be entitled to overtime if they work over 8 hours a day or over 40 hours a week, just like any other employee in California, except those who are specifically exempt from overtime.
Presenting Unpaid Overtime Claim to the Labor Commissioner's Office / DLSE
One of the more simple and more efficient ways to pursue a claim for unpaid wages or unpaid overtime, failure to provide rest breaks and meal breaks, failure to reimburse for business expenses, and failure to pay earned commissions is by submitting a wage claim to your local DLSE office (Department of Labor Standards Enforcement). California Labor Board website contains detailed information about filing a wage claim.
Their site also include a link to the wage claim form which the claimant needs to fill out properly, submit any supporting evidence and mail to their local DLSE office. The Department will then schedule a conference where both parties (the employee and the employer) will have the opportunity to present their side of the story to the agency's deputy and try to informally settle the claim. In many ways, the labor board conference meeting is just like mediation.
If the claim is settled, the parties will sign the appropriate papers, will agree on the terms of payment (amount, timeline, etc...) and the case will be closed upon the confirmation to the labor board that the payment agreed upon has been received. The terms of the agreement are strictly enforced, and if the employer fails to pay the amount agreed upon by the stated deadline, a fully amount claim will automatically becomes that claim's judgment. Like with mediation, the advantages of setting the wage claim at a conference is having the benefit of early resolution, and certainty of the outcome, especially considering the fact that in many counties the hearings are set 6 months or longer after the unsuccessful conference.
If the claim is not settled during the conference, then the Department will schedule a hearing during which the parties will have the opportunity to present their side of the story, present their evidence, make their arguments, cross-examine each other, and let the judge rule on the claim. The judgment of the labor board will become the final judgment, which is as binding as any court judgment, unless appealed within 10 days.
The advantages of the labor board process over the civil lawsuit in court for unpaid wages is that the labor board track is much more simple and cost effective. However, every claimant who believes that he/she has a claim for a significant amount of money (over $5,000) is advised to, at least, consult an attorney in order to evaluate their case and also determine whether they could benefit from being represented by an attorney in the labor board proceedings.
Filing a Lawsuit for Unpaid Overtime in Court
For a number of strategic reasons, you may choose to file a lawsuit for unpaid overtime instead of a DLSE claim. Specifically, a lawsuit is a better option if one or more of the following apply to your potential claim:
- You have relatively large claim ($30,000.00 or more) that the employer is likely to fight. Because the prevailing party is entitled to attorneys fees for every hour that your attorney would work on your case, this puts additional pressure on the employer to consider settling instead of fighting your claim. You would not be entitled to attorneys fees if you win an award in DLSE.
- You are bringing a wrongful termination claim along with unpaid overtime claim. Strategically, it's a good idea to bring both - the wrongful termination and unpaid overtime claim in one lawsuit. Many wrongful termination claims are dismissed for lack of evidence. Having an additional claim for unpaid overtime, even if it's claim for a small amount, as part of your wrongful termination / discrimination lawsuit will prevent the dismissal of the entire case, even if some of the claims are dismissed.
- The employer's refusal to pay overtime involves certain aggravating circumstances showing ill will on their part. Evidence that the employer refused to pay you properly intentionally or with some kind of ill will can greatly enhance your claim with penalties and even punitive damages. If you know or suspect that there are e-mails between and among your managers that suggest that they had bad attitude toward you because of your request to be paid properly, filing a lawsuit would allow you to obtain all these e-mails, and any other communication relevant to your employment and unpaid overtime.
Before you decide on where and how to file a claim for unpaid wages and overtime, you should consult with an experienced employment attorney about which option is best for you in light of your specific circumstances.
Additional Useful Information About Wages and Compensation Laws in California
Should You Be Paid for On-Call Time - an article discussing when an employee is entitled to be paid for on-call time (i.e. security guards, ambulance drivers, police officers, etc).
And if the amount of unpaid wages that your (former) employer owes you is just a few hundred to a few thousand dollars at the time you resign or you are terminated, makes sure you read our article on how to recover a small amount of unpaid wages.