Overtime & Unpaid Wages FAQ

Under California Labor Code Section 510, non-exempt employees are entitled to overtime pay at one and one-half times their regular rate of pay for all hours worked in excess of eight hours in one workday or 40 hours in one workweek. Employees also earn overtime for the first eight hours worked on the seventh consecutive day of work in a workweek.

Double time (twice your regular rate of pay) is required for all hours worked in excess of 12 hours in any workday, and for all hours worked in excess of eight on the seventh consecutive day of work in a workweek. California's overtime laws are generally more favorable to employees than federal law under the Fair Labor Standards Act, and employers must comply with whichever standard provides greater benefits to the employee.

Under California Labor Code Section 510 and applicable Industrial Welfare Commission Wage Orders, your regular rate of pay includes more than just your base hourly wage. It encompasses all non-discretionary compensation including hourly earnings, salary, piece-rate earnings, and certain bonuses and commissions. To calculate the regular rate, divide your total compensation for the workweek (excluding payments that are legally excludable) by the total hours worked in that week.

This regular rate is then used to calculate overtime pay at time-and-a-half or double-time rates. Certain payments are excluded from the regular rate calculation, including discretionary bonuses, gifts, expense reimbursements, premium payments for overtime work, and pay for hours not worked such as vacation or holidays. The California Supreme Court has clarified that all forms of non-discretionary compensation must be included in the regular rate calculation to ensure employees receive proper overtime compensation.

If your employer refuses to pay wages you've earned, you have several remedies available under California law. You can file a wage claim with the California Division of Labor Standards Enforcement (DLSE), which will investigate and potentially hold a hearing to recover your unpaid wages. This administrative process is free and does not require an attorney, though you may choose to have legal representation.

Alternatively, you can file a civil lawsuit under Labor Code Section 1194 to recover unpaid wages, interest, attorney's fees, and costs. If you prevail in a lawsuit for unpaid wages, you may also be entitled to recover liquidated damages equal to the amount of unpaid wages in some cases. Additionally, Labor Code Section 203 provides for waiting time penalties if final wages are not paid timely upon termination. You may also be able to pursue claims under the Private Attorneys General Act (PAGA) for Labor Code violations, which can result in civil penalties payable to both you and the state.

Waiting time penalties under California Labor Code Section 203 apply when an employer willfully fails to pay all wages due to an employee upon termination. If you are discharged, all accrued wages including unused vacation time must be paid immediately at the time of termination. If you quit with at least 72 hours' notice, final wages must be paid on your last day of work. If you quit without 72 hours' notice, final wages must be paid within 72 hours of quitting.

If the employer willfully fails to pay these final wages on time, you are entitled to continue receiving your daily wage rate for up to 30 days until the wages are paid or legal action is filed. This penalty is calculated by multiplying your daily rate of pay by the number of days wages remain unpaid, up to a maximum of 30 days. The penalty does not apply to good faith disputes about the amount owed, but employers cannot avoid the penalty merely by claiming a dispute existed. Courts look at whether the employer had a reasonable and good faith belief that wages were not owed.

No, California Labor Code Section 1194 and Section 510 require employers to compensate employees for all hours worked, and working off the clock violates these provisions. All time that you are suffered or permitted to work must be compensated, even if your employer did not authorize the work in advance. This includes time spent on work-related tasks before clocking in, after clocking out, during meal breaks if you are interrupted or required to work, and any time you are under the employer's control performing job duties.

Common off-the-clock work violations include requiring employees to perform opening or closing duties without pay, attending mandatory meetings or training without compensation, responding to work emails or calls during non-work hours, and performing work during unpaid meal breaks. Employers cannot avoid paying for work simply by prohibiting overtime or instructing employees not to record all hours worked. Under California's control test, if the employer knows or has reason to know that off-the-clock work is being performed, it must be compensated regardless of whether it was authorized.

The statute of limitations for unpaid wage claims in California depends on the legal theory pursued. Under California Labor Code Section 1194, claims for unpaid overtime and minimum wages have a three-year statute of limitations. For breach of written contract claims, the statute of limitations is four years under Code of Civil Procedure Section 337. For oral contract claims, the limitation period is two years under Code of Civil Procedure Section 339.

Claims brought under Business and Professions Code Section 17200 (Unfair Competition Law) have a four-year statute of limitations, though the UCL allows recovery only for violations occurring within the four years preceding the filing of the action. It is important to file claims as soon as possible to maximize recovery and preserve evidence. Each pay period typically constitutes a separate violation, so the statute of limitations runs separately for wages owed in each pay period. Administrative claims filed with the Labor Commissioner must generally be filed within three years of the violation.

Unpaid wages and wage theft are related but distinct concepts under California law. Unpaid wages refer to any compensation owed to an employee that has not been paid, which may result from employer oversight, payroll errors, or good faith disputes about hours worked or amounts owed. Wage theft specifically refers to the illegal and willful withholding of wages or employee benefits that are rightfully owed to workers.

Under California Labor Code Section 1197.1 and Penal Code Section 487, wage theft can include failing to pay minimum wage or overtime, requiring off-the-clock work, taking illegal deductions from paychecks, misclassifying employees to avoid paying benefits, not paying for all hours worked, or not providing required meal and rest breaks with premium pay. Wage theft may result in both civil remedies including payment of owed wages plus penalties and interest, and potentially criminal prosecution in egregious cases where the employer's conduct is willful and fraudulent. The willful nature of the employer's conduct distinguishes criminal wage theft from civil wage disputes.

California Labor Code Section 221 strictly limits an employer's ability to deduct money from employee paychecks. Employers can only make deductions that are required by law (such as income taxes, Social Security, Medicare, and court-ordered wage garnishments), authorized in writing by the employee for specific purposes like health insurance premiums or union dues, or authorized by a collective bargaining agreement for the benefit of the employee.

Employers cannot deduct money for cash register shortages, damaged or lost equipment, uniforms or tools required for the job, or business expenses. Such deductions are illegal even if the employee agrees to them in writing. Labor Code Section 2802 requires employers to reimburse employees for all necessary business expenses, so requiring employees to bear these costs through paycheck deductions or direct payment violates the law. Employees who have experienced illegal deductions can file wage claims to recover the improperly withheld amounts plus applicable penalties, interest, and potentially waiting time penalties if the deductions continued through termination.

Employers who commit wage theft face significant civil and potentially criminal penalties under California law. Under Labor Code Section 1194, employees can recover unpaid wages plus interest, and the prevailing employee is entitled to recover reasonable attorney's fees and costs. Labor Code Section 203 provides for waiting time penalties of up to 30 days of wages if final wages are not paid timely upon termination. Under Labor Code Section 1197.1, the Labor Commissioner can assess civil penalties for minimum wage violations.

The Private Attorneys General Act (PAGA), codified in Labor Code Section 2699, allows employees to bring representative actions on behalf of themselves and other employees and recover civil penalties of $100 per employee per pay period for initial violations and $200 per employee per pay period for subsequent violations, with 75% going to the state and 25% to the affected employees. In cases of willful wage theft involving substantial amounts, employers may face criminal prosecution under Penal Code Section 487 for grand theft of wages. Additionally, systematic wage theft can result in injunctive relief, liquidated damages, and punitive damages in civil actions.

While you are not legally required to have an attorney to recover unpaid wages in California, legal representation can significantly improve your chances of success and maximize your recovery. You can file a wage claim with the Division of Labor Standards Enforcement (DLSE) without an attorney, and this administrative process is designed to be accessible to unrepresented workers. The DLSE will investigate your claim and may hold a hearing where you can present evidence.

However, for complex cases involving substantial amounts, multiple legal theories, or employer retaliation, an attorney can provide valuable assistance. Under Labor Code Section 1194 and other wage and hour statutes, prevailing employees are entitled to recover their reasonable attorney's fees and costs from the employer, making legal representation financially accessible through contingency fee arrangements where the attorney is paid from the recovery. An experienced employment attorney can evaluate all potential claims including overtime, meal and rest break premiums, expense reimbursements, waiting time penalties, and PAGA claims that you might not be aware of on your own, potentially resulting in significantly greater recovery than a simple wage claim.