California’s Laws on Minimum Wages Lawyer

As of January 1, 2020, the state of California’s rate for minimum wage is well above the national average:

• $13.00 per hour of work where there are more than 26 employees; or
• $12.00 per hour of work where there are less than 25 employees.

These rates are not stagnant. California has a plan to increase minimum wages for the next several years.

STATE-WIDE INCREASES IN MINIMUM WAGES

California’s minimum wage is also statutorily set to increase each year through 2023. These increases are shown in the table below.

The Minimum wage, however, will not stop at $15.00. It will continue to increase by the lesser of:

1. 3.5 percent; or
2. the rate of change (rounded to the nearest ten cents) in the averages of:

• the period over the preceding July 1 to June 30, inclusive,
• the most recent July 1 to June 30, inclusive,
• the period for non-seasonally adjusted United States Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W) by United States Bureau of Labor Statistics

These changes will commence on January 1, 2023, for employers with more than 26 employees. Employers with less than 25 employees must make the change on January 1, 2024.

LOCAL MINIMUM WAGE RATES

Also, keep in mind that many municipalities and counties in California impose their own minimum wage. This minimum wage must meet the state-wide minimum wage set by California law. Your employer must also pay you the minimum wage set by the local government if it is higher than the California statewide minimum wage.

Currently, in Los Angeles:

• employers with 26 or more employees must pay a minimum wage of $14.25; and
• employers with fewer than 26 employees must pay a minimum wage of $13.25.

There is a significant difference between Federal and California minimum wage laws. California’s minimum wage law is almost twice that of the Federal minimum while the City of Los Angeles’ minimum wage is twice the Federal minimum wage.

The Federal minimum wage is $7.25 per hour and has been in effect since 2009 — so after 11 years, the minimum wage set by the U.S. government has not changed.

As for protections regarding minimum wage, California offers more protections than the Federal government does. Employers in California must abide by California law as well as Federal law.

Employers in California must comply with both federal and state minimum wage laws. The highest minimum wage must be used, and in California, that’s typically California’s state-wide minimum wage law over the federal minimum wage rate.

The minimum wage does not have to be met with cash alone. Credit for meals and lodging can be applied to satisfy the employer’s minimum wage responsibilities. But for meals and lodging to apply as credit, it must be in accordance with the below table, effective as of January 1, 2020.

The credited amount cannot exceed the amounts stated in the above table. Further, these credits only satisfy the employer’s minimum wage obligation when there is a voluntary written agreement. Without a voluntary written agreement between the employer and employee, credits will not be counted toward the minimum wage.

With so many minimum wage rates in effect, which applies to employees in Los Angeles. Some may assume the Federal government minimum wage overrides local or state minimum wages. The latter is untrue, however. Local minimum wages in California — if any — override state minimum wage laws, and California’s minimum wage laws override federal minimum wage laws.

If you work in Los Angeles, you are owed the minimum wage set by the City of Los Angeles. Likewise, if you employ persons in Los Angeles, you must compensate those employees according to the city’s minimum wage.

When employees in California are paid a salary as opposed to wages, these employees are considered white-collar employees. As such, they fall under what’s known as California’s white-collar rule and are exempt from certain wage laws, like overtime pay. But there are also certain restrictions.

Under the white-collar rule in California, salaried persons must be paid an equivalent of twice the minimum wage at a minimum. That means the minimum salary could be set at would be almost $49,000 with minimal adjustments made for holidays and paid leave. Those things would increase the required minimum salary in California.

Commission employees may also be exempt from the minimum wage and overtime laws so long as the commissioned employee makes 1.5 times the minimum wage rate for:

• all hours worked for each pay period; and
• half or more of the wages come from commissions.

Employees who are compensated in part from tips are not exempt from California’s minimum wage and overtime laws. These employees, according to Labor Code § 351, must be paid minimum wage:

An employer shall not take, collect, or receive any gratuity that is given to, paid, or left for by a patron for an employee. An employer shall not require an employee to deduct any amount from their wages or to credit the amount, on account of a gratuity as a part of the wages, due to the employee from the employer. Every gratuity given to, paid, or left for by a patron is hereby declared to be the sole possession of the employee. If a patron wants to use a credit card to pay gratuities for an employee, and if the employer allows it, then the full amount of the gratuities shall be paid to the employee that is indicated on the credit card slip. There shall not be any deductions for any costs or credit card payment processing fees that may be charged to the employer, by the credit card company. The gratuities must be paid to the employees on the next incoming payday following the date that the patron approved the credit card payment

In sum, any and all gratuities or tips are given to an employee become the property of the employee and not the employer. Servers, bartenders, waiters, and the like must all be paid a minimum wage in California.

There are exceptions to California’s minimum wage and hour laws. There are employees who are exempt because they earn commissions or are salaried and earn more than the minimum wage. Exceptions are also made for certain employees, but these exceptions allow an employer to pay the employee less than minimum wage or, as it’s more commonly known a sub-minimum wage. Workers who may be paid a sub-minimum wage may be some employees with disabilities, trainees, and apprentices.

STUDENTS

An organized camp of a group consisting of camp counselors, student employees, or program counselors may receive a subminimum wage rate. According to Labor Code § 1182.4,

If the camp counselor, program counselor or student employee receives, on a weekly basis, a salary of at least 85 percent of the minimum wage for a 40-hour week, they not shall be subjected to a minimum wage, regardless of the number of hours per week they might work. The camp counselor, program counselor or student employee shall be paid at least 85 percent of the minimum hourly wage if they work not more than 40 hours per week

An “organized camp” is defined by the Health and Safety Code § 18897 as

a site with facilities and programs, established for the sole purposes of providing an outdoor group living experience with educational, spiritual, social, or recreational objectives, for more than five days during one or more seasons of the year.

Organized camp does not include:

• A motel
• Resort
• Trailer park
• Tourist camp
• Hunting camp
• Auto court
• Penal or correctional camp
• Labor camp
• Home-finding agency
• Child care institution, or
• Charitable or recreational organization complying with rules and regulations for recreational trailer parks.

EMPLOYEES WITH DISABILITIES

Qualifying employers may be able to pay some employees with disabilities a wage rate that is lower than the state’s minimum wage. To qualify, the employer must obtain a license to do so from the California Division of Labor Standards Enforcement.

According to Labor Code § 1191,

The commission may issue to an employee who is physically or mentally handicapped. For a period of a year from the date of issue, a special license approving the employment of the licensee at a wage less than the legal minimum wage. On a yearly basis, such license may be renewed. The commission shall fix a special minimum wage for the licensee

Further, a nonprofit may be able to obtain a special license that would apply to any individual with a disability as opposed to obtaining a license for each specific individual with a disability. According to Labor Code § 1191.5,

For employees who have been determined by the commission, a special license may be issued by the commission to an organization that is non-profit such as a rehabilitation facility or a sheltered workshop to permit their employment, without requiring individual licenses of such employees. On a yearly basis, or more frequently, the nonprofit corporation’s special license shall be renewed. A special minimum wage for such employees shall be fixed by the commission.

TRAINEES & APPRENTICES

Some trainees (known as learners) and apprentices may also be paid subminimum wages. According to Labor Code § 1192,

The commission may issue a special license to a learner or apprentice, approving the employment and under the conditions which the commission determines that the wage is less than the legal minimum wage.

According to Industrial Welfare Commission Wage Orders 1-16 § 4

during their first 160 hours of employment in occupations in which they have no previous similar or related experience, may be paid not less than 85 percent of the minimum wage rounded to the nearest nickel.

To qualify for the above subminimum rate, trainees should have no previous or related experience in the industry of employment.

It is important to keep in mind that the Industrial Welfare Commission will establish the subminimum wage rate, the hours, and the conditions for the employee — it is not the employer who determines these things. Also, these rules do not apply to:

• Non-trainee learners – those who are not new to the industry; and
• Student-workers – those who are not employed in a training capacity.

OUTSIDE SALESPERSONS

According to Labor Code § 1171, outside salespersons may be paid a sub-minimum wage rate. To qualify for the sub-minimum wage rate, the salesperson must perform his or her duties more than half the time outside the employer’s place of business.

NATIONAL SERVICE PROGRAM PARTICIPANTS

Participants of a national service program carried out using assistance provided under Section 12571 of Title 42 of the United States Code may also be paid a sub-minimum wage rate per Labor Code § 1171. These programs include but are not limited to:

• AmeriCorps
• AmeriCorps NCCC
• National Senior Service Corps
• AmeriCorps VISTA
• Learn and Serve America
• Citizen Corp
• USA Freedom Corps.

California employees in Los Angeles or elsewhere in the state cannot agree to less than a minimum wage if they do not qualify as an exception to the minimum wage laws. You cannot waive your right to a minimum wage, and an employer cannot ask you to do so.

Plus, the minimum wage rate that is highest must be the minimum wage rate used by the employer. In Los Angeles, the city’s minimum wage rate is set higher than the state’s minimum wage rate, which in turn is higher than the national minimum wage rate. As such, employees in Los Angeles must be paid the minimum wage rate set by the City of Los Angeles.

Employers have very specific responsibilities to their employees in Los Angeles. An employer in the City of Los Angeles must:

• Pay the hourly minimum wage
• Provide sick leave for hours worked within the geographic boundaries of the City
• Post the Office of Wage Standards and Sick Time Notice in a conspicuous place at any workplace or job-site – the notice must be in English and in another language that is spoken by at least five percent of the employees at that site (so if 5% of the workers speak Spanish, a notice in Spanish must also be provided, and there could be multiple languages spoken requiring multiple notices posted)
• Payroll records must be kept for four years
• Provide employees with the Employer’s name, address, and telephone number in writing at the time of hire
• Not retaliate against any employee exercising rights under the Minimum Wage and Office of Wage Standards Ordinances.

When an employer in California fails to adhere to the state minimum wage laws for any reason, you may be entitled to file an unpaid wage claim. You may first have to file a claim with a specific agency – much of it depends on the facts and circumstances. An experienced wage law attorney can outline your options and guide you in the right direction.

Should you file an unpaid wage claim in Los Angeles, you could be eligible for any of the below compensable damages:

• Wages owed to you – wages necessary to bring wages to the minimum wage;
• Missed meal breaks – you may receive one hour of pay for every day you were not allowed to take a 30-minute meal break for every five hours of work;
• Missed rest breaks – you may receive one hour of pay for every day you were not allowed to take a 10-minute rest break for every four hours of work;
• Waiting time – if the employer failed to pay you on time when you left the company, it will be assessed a waiting time penalty equivalent to your average daily pay for every day the employer was late for up to 30 days;
• Interest that accrued on the owed amount;
• Reasonable attorney fees;
• Liquidated damages – this is an amount equal to the number of your lost wages and is payable if the employer intentionally underpaid you and was not the result of a good-faith mistake; and
• A penalty is meant to punish the employer, deter future violations of the same kind, and benefit the victim.

In many unpaid wage claims, the employees are those who are already in a situation where they feel they cannot fight the employer – it could be money, fear of retaliation, or you could be an undocumented worker. Whatever the issue is, it is important to keep in mind that you have rights and California has a strong history of upholding these rights. Plus, if your case is successful, you will likely be able to get reasonable attorney fees as part of the award. Any retaliative moves made by the employer will be punished by the courts, too.

In some cases, it may be that there are several workers experiencing the same wage and hour violations. If that is true, then a class action may be a more efficient means to a successful end.

If your employer has failed to pay you at least the minimum wage and you do not qualify as an exception to California’s wage and hour laws, then you may be able to file an unpaid wage claim. Contact Sirmabekian Law Firm online or at 818-473-5003 to get answers to your specific questions. We will advise you of your rights and options and will aggressively move forward if your rights have been violated.