I am often asked what the penalties are for wage and hour violations. They add up quickly which is why it behooves you to have the right payroll company as well as the right time keeping policies and procedures for payment.
Waiting Time Penalties – Up to 30 days Pay.
A terminated employee is also entitled to up to 30 days pay for the employer’s violation of California Labor Code $$201 and 202 which require all California employers to remit payment of all earned, but unpaid compensation, within 72 hours if the employee quits without notice, or on the date of termination if the employee is terminated. California Labor Code §203 provides that an employer’s willful failure to remit payment entitles the employee to one full day’s pay, up to 30 days, from the date the employee was terminated until the employee is paid, or files a lawsuit. Based on our hypothetical, our employee is entitled to $4,800 ($20 per hour x 8 Hours x 30 days).
Wage Statement Violations – Up to $4,000.
A terminated employee can also seek penalties for violations of California’s pay stub and wage statement laws. Pursuant to California Labor Code §226, California employers are required to provide every employee with an accurate wage statement that sets forth the employee’s gross wages, total hours worked, all deductions taken, net wages earned, amongst other things. Since overtime hours were omitted our employee’s wage statement inaccurately sets forth her gross wages and rates of pay for overtime hours worked. Since a violation of Labor Code §226 has arguably occurred our employee is entitled to: (1) $50 for the initial pay period in which a violation occurs and $100 per employee per pay period for each additional violation up to $4,000 plus an award of reasonable attorneys fees and costs.
Missed Meal and Break Penalties – One Hour of Pay For Each Violation.
California Labor Code §512 provides that all non-exempt employees (those entitled to overtime pay) must be given a 30 minute meal period if they work more than five hours a day, and they must be given a 10 minute rest break for every four hours worked (or major fraction thereof). Assuming our employee was given her rest breaks, it is likely she was not given an off-duty meal period. Unless the employee is relieved of all duty during his or her thirty minute meal period, the meal period is considered “on duty” and the employee must be paid for that time at his or her regular rate of pay (in our example $20). If the employer violates Labor Code §512, the employee is entitled to one hour of pay ($20) for every day a meal period was not provided.
California employers to remit payment of overtime wages no later than the payday for the next regular payroll period following the payroll period in which the overtime wages were earned. Although California Labor Code section 204 does not expressly provide for civil penalties, penalties can be obtained under California’s Private Attorneys General Act which provides for a $100 per employee per pay period for the initial violation, and $200 per employee for subsequent pay periods, plus reasonable attorney’s fees and costs.