Posted on April 16th, 2018
You’ve always dreamed of owning your own business in California, and now that its a reality you want to make sure nothing goes terribly wrong.
Once you reach the goal of having a profitable business you then have to focus on keeping your money!
One bad lawsuit could cost you thousands if not wipe you out for good.
People are finding more and more reasons to sue businesses so they can take home some extra money.
To avoid being sued, it is important that you understand the ins and outs of California’s wage and labor laws.
Luckily, we’re here to help you out. We’ve laid the important information you’ll need to know about wage and hour violations in California, so you don’t get blindsided by a devastating lawsuit.
Wage and Hour Violations
Businesses have been sued for every reason imaginable relating to wage and hour violations. This is why it is important to discuss what constitutes as a violation, and what would be legal under California law.
Let’s go through the most common violations that companies will be sued for, and talk about how you can prevent it.
California Minimum Wage Violations
One of the most common wage and hour violations is not following minimum wage laws for non-exempt employees.
Non-exempt workers are those who get paid hourly, instead of receiving an annual salary.
There are two types of minimum wages: federal and state.
Federal minimum wage means that no state can legally have their minimum wage below the federal amount. As of 2018, the federal minimum wage is $7.25 per hour.
The state minimum wage is set by each individual state. As long as it is above $7.25, states can make their minimum wage any amount. The state minimum wage applies to all businesses residing in that state.
Many states opt to just go with the federal minimum wage and do not have their own state minimum wage.
Generally, states with higher living expenses, such as California or New York, will have higher minimum wages. This is because living off of $7.25 per hour would be much more difficult due to the much higher cost of living.
The California minimum wage is currently $11.00, which is much higher than the average state wage. The state will be increasing minimum wage by $1 annually until 2022, where it will remain at $15/hour.
One exception to the minimum wage rule is if an employee works for tips.
For example, if you own a restaurant, you will have waiters and waitresses making the majority of their income through tips.
The federal minimum wage for tipped employees is just $2.13 per hour. However, California is one of just seven states that require businesses to still pay tipped employees the state minimum wage of $11 per hour.
Another note on minimum wage is regarding exempt employees. This term refers to employees who do not get paid per hour, but rather have a set income every month, adding up to an annual salary.
The minimum monthly income for exempt employees in California as of 2018 is $3,813.33.
That’s a lot of info to take in, but it really just boils down to this: pay your employees at least the state minimum wage and you will be fine.
California Overtime Violations
Another common wage and hour violation for businesses is not paying overtime to employees.
Overtime pay only applies to non-exempt employees 18 or older.
Businesses in California are required to pay time and a half for hours worked in excess of the standard eight hour work day up to 12 hours, or any hour over the 40 hour work week limit.
In addition, any nonexempt employee who works more than six consecutive days is to be paid time and a half for the first eight hours on the seventh consecutive day.
An employee’s pay is to be doubled for any work in excess of twelve hours in one day, or any hours worked over the first eight hours worked on the seventh consecutive workday.
The best way to avoid any issues with overtime is to minimize the amount given out to employees. Overtime should be pre-approved by the manager prior to the employee working overtime.
Some workers are exempt from California’s overtime laws.
If you are an executive director of a company, you will not earn overtime pay because you already make twice as much as the minimum wage requirement.
Professional employees who do not perform manual labor, need supervision, or make their own hours are also exempt from overtime pay. This includes teachers, journalists, doctors, nurses, and many more.
California Child Labor Law Violations
An important wage and hour violation law to be familiar with is the child labor law. These laws are much more strict and need to be carefully followed.
Prior to being employed in California, a minor will need to obtain a work permit from the business that is hiring them. This permit is to be renewed annually until the minor is 18 years old.
The labor laws are different depending on the age of the minor.
Children under the age of 12 cannot be legally employed in California. Minors aged 12-13 are only allowed to work on non-school days, up to 8 hours per day and 40 hours per week when school is not in session.
Employees aged 14-15 can work up to 3 hours on school days, and up to 8 hours on non-school days, and as many as 40 hours per week when school isn’t in session.
16 and 17-year-old employees can work for up to 4 hours per school day, and up to 8 hours per non-school day. When school is out, they can work up to 48 hours per week.
For more detailed information, check out this child labor law information pamphlet for the state of California.
Assistance for Employers
If you’re facing a labor lawsuit, or you want to ensure you aren’t violating any labor laws, please contact us for a free consultation.
Whether you’ve been hit with a lawsuit regarding wage claims, wrongful termination, sexual harassment claims, discrimination defense, or anything related to your business and state violations, we’re here to help.
We have all the services you need to defend your business from any lawsuit or claim regarding labor violations.
