Facts About the California Labor Commission

The California Labor Commission handles claims for unpaid wages, overtime, and other labor violations through the Division of Labor Standards Enforcement (DLSE), sometimes referred to as the "Labor Board." The DLSE offers an informal process for dealing with these claims. However, before you file with the Labor Commissioner, you should be aware that they can NOT protect all of your rights, and your actual claim could be significantly more than what the Labor Commissioner could possibly award you.

Any samples that are given are for illustration purposes only and would not necessarily represent your claim.  Any statements, on this page or elsewhere, are not guarantees of any outcome. The Law Offices of Michael Tracy is not affiliated with the DLSE in any way.

 

 

Double Damages

This one comes as a shock to many people, but when you file a claim with the Labor Commission for unpaid overtime, you may be leaving half of your potential claim behind you. This is because the Labor Commissioner can not award liquidated damages for overtime. Liquidated damages are a remedy provided by Federal Law that allows you to recover double your actual unpaid overtime. (Click here for a video about Liquidated Damages.) Because these liquidated damages can only be recovered under Federal Law and the Labor Commission is a State of California agency, they can not award these damages. Unfortunately, the California Labor Board does not tell you this when you file your claim and many people who file with the California Labor Board are simply cutting off 1/2 of their potential recovery. Please note that many, but not all claims for overtime will be eligible for liquidated damages. I will be happy to go over this with you in more detail if you decide to go forward.

Example: You work as an assistant manager in a store and make $15/hr. You don't get paid any overtime, just straight time. You work 50 hours a week and have worked under these conditions for 1 year. If you file your claim with the California Labor Board, you would be entitled to only $3,900. However, an attorney can protect your right to the liquidated damages, and your claim would be for $7,800. These numbers are only for illustration purposes, and your claim would be different.

Thus, many people think that the California Labor Board is an inexpensive way to settle claims. It is inexpensive, for the employer. The employer only has to pay 1/2 of what the Federal Law requires.

You should contact me prior to taking your case to the Labor Board. There are shorter statute of limitations on federal claims and it is essential that you not wait for the Labor Board process to complete before pursuing these.

4 Years vs 3 Years

Unless you are working under the terms of a written employment contract that provides for overtime, and very few non-union people are, the Labor Commissioner can only get you unpaid overtime going back 3 years. An attorney can assert your right to go back 4 years. The reason for this is that the Labor Commissioner can only enforce California Labor Law. Under California Labor Law, the Statute of Limitations for unpaid overtime is 3 years. However, under a different section of the law that covers unfair business practices, you can recover unpaid overtime going back 4 years.

Example: You are a non-exempt computer programmer and make $80,000 per year on salary. You average about 60 hours per week and have been working under these conditions for 4 years. If you go to the Labor Commissioner, the maximum you can get is $180,000. However, an attorney can protect your right to the additional 4th year, and your claim would be for $240,000.

As you can see, this is another reason why employers love the Labor Commissioner.

If you are in the process of going through the Labor Commissioner and any of your claim is being cut short because of the 3 year limit, you should contact me immediately.

Attorney Fees

The Labor Commissioner can not award you attorney fees, even if you win. While many people go through the hearing on their own and don't use an attorney, this is still a big disadvantage. The reason is that the employer will fight an action through the Labor Commissioner even if he has little chance of winning on the merits of the case. The reason is that you might not show up at the hearing or you might not be able to present your case properly to the Hearing Officer, and will thus lose your case. Even if they do lose, they just have to pay you the money you are due anyway and nothing extra for the attorney fees.

The situation is completely reversed once you have an attorney who is willing to sue in court. Please note that some attorneys will only take your case to the Labor Commissioner for you. If you have a wage claim, you should make sure that your attorney is willing to go to court for you. If the employer does not want to pay you what you are due and you win in court, they must pay your reasonable attorney fees. This can be a big incentive for the company to settle the case quickly.

As you can see, the attorney fees provisions provide an excellent incentive for employers to pay you your money immediately. The fact that the Labor Commissioner can not award attorney fees can seriously impede your ability to get prompt payment.

In addition, if you are awarded attorney fees in court, it could offset any contingency fees that are due under my standard fee agreement. Thus, if you receive a $20,000 judgment and $10,000 for attorney fees, you get to keep the entire $20,000 and don't have to pay any contingency fees. Please note that that the fee agreement specifies a formula for computing attorney fees. You should read it and understand how it works before you retain any attorney. Nothing on this website in any way alters or replaces what is in the fee agreement.

Finally, it does not cost nearly as much as most people think to retain an attorney. A description of my standard fee structure for wage and hour cases is here.

Private Attorney General Act

A recent addition to the California Labor Code is the Private Attorney General Act of 2004. This law allows you to sue for civil penalties for all labor violations committed by the employer. Thus, even if you have a small claim, you can sue for penalties for all the violations in the company. You get to keep 25% of the penalties awarded, the other 75% go to the State of California. These penalties can be substantial and they provide an excellent way to get employers to comply with the labor laws by providing an incentive to sue. These laws can be used very effectively against employers that use undocumented workers and don't follow all the proper labor laws.

Loan Office Exemption

Under California law, many loan officers are exempt from California overtime. Thus, if you go to the California Labor Board, they will tell you that you are exempt. However, the loan officers are still entitled to overtime under federal law, plus the liquidated damages. The California Labor Board will tell you that you don't have a case when in fact you have a great case, a Federal Case. If you have been told by the California Labor Board that you are not entitled to overtime because you were paid commissions, you should contact me to see if you can recover under federal law.

Truck Driver Exemption

Under California law, many truck drivers are exempt from California overtime. As with loan officers, the California Labor Board will tell you that you are not entitled to overtime. However, if you don't drive a truck across state lines and the shipments that you are transporting are not part of interstate commerce, then you may be entitled to overtime under federal law. Overtime laws for truck drivers are very complex. If you think you might qualify, you can contact me, and I can look at your case.

Appeal

Even if you do win at the Labor Commission, the employer still has the right to appeal that decision. If you do manage to win a significant amount at the Labor Commission, it is likely that the employer will appeal. At this point, the case starts all over and goes to court. You will likely need to get an attorney at this point any way. In addition, you don't get your money until you win the appeal in court. Thus, you may be waiting a long time to get anything by going to the California Labor Board.

Conclusion

As you can see from the above, going to the Labor Commission can be very disadvantageous. If you have a small claim that does not involve overtime, the Labor Commission can be an excellent way to resolve your issue. However, for any type of overtime claims, you should contact my office and see if we can help.