SB 688 (Contract Wages)

What it says: SB 688 would increase the Labor Commissioner’s authority to cite employers for failure to pay “contract wages,” which is defined as wages based on an agreement in excess of the applicable minimum wage.

What it means for employers: Employers can now be held liable for failing to pay an employee at a wage rate set by contract, even if all hours paid were compensated at or above the applicable minimum wage. This effectively empowers the labor commissioner to enforce a breach of contract claim for wages against an employer. To avoid liability, employers should ensure that they clearly communicate with employees regarding the applicable rate of pay for their work and then ensure that employees are accurately paid for all time worked.

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