Wage Theft FAQ

Wage theft in California refers to any illegal practice where an employer fails to pay workers the full compensation they are legally entitled to receive. This encompasses a broad range of violations including failure to pay minimum wage, refusing to pay overtime premiums, making illegal deductions from paychecks, not providing required meal and rest breaks, misclassifying employees as independent contractors, and failing to reimburse business expenses.

Under California Labor Code Section 200, wages include all amounts for labor performed by employees, whether calculated by time, task, piece, or commission. The California Labor Commissioner estimates that wage theft costs California workers billions of dollars annually. Common forms include off-the-clock work requirements, tip stealing, paycheck bouncing, and illegal rounding practices.

Employers who commit wage theft face significant penalties including back pay, interest, liquidated damages, waiting time penalties under Labor Code Section 203, and potential criminal prosecution under Labor Code Section 216 for willful violations.

California's statewide minimum wage as of January 1, 2024 is $16.00 per hour for all employers regardless of size, making it one of the highest in the nation. Starting January 1, 2025, the minimum wage increases to $16.50 per hour pursuant to Labor Code Section 1182.12. However, many California cities and counties have enacted local minimum wage ordinances that exceed the state minimum.

For example, cities like San Francisco, Los Angeles, Berkeley, and others have minimum wages ranging from $17.00 to over $18.00 per hour. Additionally, fast food workers covered under AB 1228 receive a minimum wage of $20.00 per hour starting April 1, 2024, and healthcare workers at covered facilities receive between $18.00 and $23.00 per hour under SB 525.

Employers must pay whichever minimum wage is highest - federal, state, or local. Failing to pay the applicable minimum wage entitles employees to recover unpaid wages plus an equal amount as liquidated damages under Labor Code Section 1194.2, plus interest and attorney's fees.

Yes, you can absolutely recover unpaid wages even if you were paid in cash rather than by check or direct deposit. California wage and hour protections apply regardless of how you receive payment. Being paid in cash does not exempt your employer from complying with minimum wage laws, overtime requirements, or other labor protections under the California Labor Code.

The challenge with cash payments often involves proving the hours worked and amounts paid, since there may be no pay stubs or bank records. To strengthen your claim, you should maintain your own records of hours worked, including dates, start and end times, and any cash amounts received. Text messages, calendars, witness statements from coworkers, and any receipts or notes can serve as evidence.

Under Labor Code Section 226, employers are required to provide itemized wage statements regardless of payment method. If your employer failed to provide these statements, they face additional penalties of $50 for the initial violation and $100 for each subsequent violation, up to $4,000 total. The Labor Commissioner's Office regularly handles claims involving cash payments and can subpoena employer records during investigations.

When an employer's paycheck bounces or is returned for insufficient funds, California law provides significant penalties and remedies for affected employees. Under California Labor Code Section 203.1, if a paycheck is returned unpaid due to insufficient funds, the employer must pay the employee the full amount of the check plus a penalty equal to one day's wages for each day the wages remain unpaid, up to a maximum of 30 days.

This is in addition to any bank fees you incurred from the bounced check. Your employer is required to make good on the payment immediately and should reimburse any NSF fees charged by your bank. If the employer fails to pay within the specified time, you can file a wage claim with the California Labor Commissioner or pursue a civil lawsuit.

Additionally, knowingly issuing a check with insufficient funds can constitute criminal fraud under Penal Code Section 476a. If you receive a bounced paycheck, you should immediately notify your employer in writing, document all bank fees incurred, and keep copies of the returned check and bank statements. If the employer does not remedy the situation promptly, consider filing a wage claim as the penalties continue to accrue daily.

Filing a wage claim with the California Labor Commissioner, also known as the Division of Labor Standards Enforcement (DLSE), is a straightforward process designed to be accessible without an attorney. You can file a claim online through the DLSE website, by mail, or in person at any Labor Commissioner's office throughout California.

The claim form requires basic information including your name and contact details, employer information, dates of employment, description of the violation, and the amount of wages owed. You should attach any supporting documents such as pay stubs, time records, employment agreements, and written communications with your employer.

After filing, the DLSE will review your claim and typically schedule a settlement conference where you and your employer attempt to resolve the matter with a Deputy Labor Commissioner. If no settlement is reached, a formal hearing before a hearing officer is scheduled, where both parties present evidence and testimony. The hearing officer issues a written decision, and if wages are found owed, the employer must pay within 10 days. There are strict deadlines for filing: three years for most wage claims, four years for written contract violations. The process is free, and you may recover wages, penalties, interest, and attorney's fees if you prevail.

California has specific statutes of limitations that determine how long you have to file different types of wage theft claims, and missing these deadlines can bar you from recovering money owed. For claims based on oral agreements or statutory violations such as minimum wage, overtime, meal and rest breaks, and most Labor Code violations, the statute of limitations is three years under Code of Civil Procedure Section 338.

For claims based on written employment contracts, including claims for commissions or bonuses specified in writing, the limitation period extends to four years under Code of Civil Procedure Section 337. Waiting time penalties under Labor Code Section 203 have a three-year limitation. For claims filed with the Labor Commissioner's office, the DLSE can investigate violations going back three years from the date of filing, or four years for written contract claims.

It is critical to file as soon as possible because you can only recover wages for the period within the statute of limitations. Each pay period that wages are owed starts a new limitations period for those specific wages. Federal claims under the Fair Labor Standards Act have a shorter two-year limitation, extended to three years for willful violations, so state claims often provide longer recovery periods.

California has strict rules about paycheck deductions, and employers are generally prohibited from making deductions that benefit the employer or that employees have not expressly authorized in writing. Under Labor Code Section 221, employers cannot collect or receive any part of wages previously paid to an employee, and Section 224 requires written authorization for deductions.

Legal deductions include those required by law such as taxes, Social Security, Medicare, court-ordered garnishments, and child support orders. Voluntary deductions for health insurance, retirement contributions, or union dues are permitted with proper written authorization. However, employers cannot deduct for cash register shortages, customer walkouts, breakage, equipment damage, uniforms required by the employer, or business losses - even with employee consent.

Under Labor Code Section 2802, employers must reimburse employees for all necessary expenditures incurred in performing their job duties. Deductions that reduce wages below minimum wage are never permitted. If your employer has made illegal deductions, you can recover the amounts improperly withheld plus interest, and may be entitled to additional penalties. The Labor Commissioner actively enforces these provisions, and employers who violate them face penalties of $100 per employee per pay period under Labor Code Section 225.

California provides robust protections against employer retaliation for employees who assert their wage and hour rights. Under Labor Code Section 98.6, it is illegal for employers to discharge, discriminate against, or retaliate against any employee for filing a wage claim, testifying in a wage proceeding, or complaining about unpaid wages. Protected activities include filing a complaint with the Labor Commissioner, reporting violations to management, consulting with an attorney about wage issues, or even discussing wages with coworkers.

If you experience retaliation, you can file a retaliation complaint with the Labor Commissioner within one year of the adverse action. The burden then shifts to the employer to prove the action was taken for legitimate, non-retaliatory reasons. Remedies for proven retaliation include reinstatement to your position, back pay for lost wages, and a penalty of up to $10,000 per violation payable to the employee.

Additionally, Labor Code Section 1102.5 provides whistleblower protections with potential penalties up to $10,000. Employers cannot require employees to sign waivers of these protections, and any such agreement is void and unenforceable. Document all retaliatory actions including dates, witnesses, and any statements made by supervisors, as this evidence is crucial for proving your claim.

California wage theft claims can result in substantial recovery well beyond just the unpaid wages themselves due to the state's strong penalty provisions. First, you can recover all unpaid wages including minimum wage shortfalls, unpaid overtime, meal and rest break premiums, unreimbursed business expenses, and any other compensation owed. Under Labor Code Section 1194.2, for minimum wage and overtime violations, you can recover liquidated damages equal to the unpaid wages, effectively doubling your recovery.

Interest accrues on unpaid wages at 10% per year under Civil Code Section 3289. Waiting time penalties under Labor Code Section 203 provide up to 30 days of wages if your employer willfully fails to pay final wages on time. Wage statement violations under Labor Code Section 226 can add $50 to $4,000 in penalties. Private Attorney General Act (PAGA) claims under Labor Code Section 2699 allow recovery of civil penalties of $100 per employee per pay period for initial violations and $200 for subsequent violations, with 25% going to aggrieved employees.

You can also recover reasonable attorney's fees and costs under Labor Code Section 1194. In class actions, individual recoveries may seem modest but aggregate into significant amounts. Some willful violations carry criminal penalties including fines and imprisonment under Labor Code Section 216.

If you believe your employer is not paying you correctly, taking systematic steps can help protect your rights and maximize your recovery. First, begin documenting everything immediately: keep detailed records of your hours worked including start times, end times, breaks taken, and any work performed off the clock. Save all pay stubs, employment documents, handbooks, schedules, and any communications about pay.

Review your pay stubs carefully against your hours worked, checking that you received proper minimum wage, overtime premiums for hours over eight per day or 40 per week, and premium pay for missed meal or rest breaks. If discrepancies exist, consider raising the issue with your employer in writing, keeping copies of all correspondence. Consult with an employment attorney who can evaluate your situation confidentially, as many offer free consultations and work on contingency.

You can file a wage claim with the California Labor Commissioner at no cost, and the DLSE will investigate and pursue recovery on your behalf. Act promptly because statutes of limitations apply, and you can only recover wages within the applicable time period. Do not sign any releases or settlements without understanding your rights, and do not let fear of retaliation prevent you from asserting your legal rights - retaliation is itself illegal and subject to additional penalties.