Wage Theft

“I know I must provide a notice to new hires about wage theft but I don’t really understand it myself so I can’t explain it to my employees. What is it?”

Your HR Survival Tip

California’s Wage Theft Protection Act went into effect on 1/1/2012. This started because employees didn’t fully understand their pay stubs and couldn’t tell if they were being paid appropriately. The Act forced companies to provide the information in a way that was easy to read. Thus, the notice.

The DIR (California’s Department of Industrial Relations) uses the Labor Commissioner’s Office to fight for employees who are not being paid properly by their employers. An example of this was a case that reached a settlement last fall. A Bay Area restaurant owed 133 workers for unpaid minimum wage, overtime, and split shifts premiums. California considers this a theft of wages due to the employees. The original assessments and penalties came to $5.16 million but the final settlement ended up at $2.6 million.

How do you make sure you avoid something similar? Even employees who receive tips have a minimum wage that must be paid for all hours worked. In California, you also pay 1.5 times their hourly wage when they work overtime… which is any time over 8 hours in a day or more than 40 “regular” hours in a week.

The split shift pay comes into play when a company requires an employee to take more than an hour between the first part of their shift and the second part. A restaurant example is if you were asked to work the lunch shift from 10a-2pm, then required to come back for the dinner shift from 5pm-10pm. That required 3-hour gap is considered a split shift. California has a specific calculation you must use to determine how much extra money the employee should be paid for that split shift.

Avoid putting your company at risk by ensuring you are compliant with all pay requirements. The wage theft notice we give employees provides, as an attorney once said, everything an employee needs to be able to sue you. Make sure your processes and the notice are in sync so you aren’t open to claims.

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