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California Labor Law: What's Back Pay and Shift Pay?

Updated: Apr 26

Find A California Labor Lawyer for Wage Claims


When you consider filing a wage and hour claim, it's best that you understand the specifics of wage as it pertains to California Employment Law. Back Pay and Shift Pay are common terminologies used in unpaid wage claims. Of course, you can always hire a Labor Lawyer to help you understand the nitty-gritty aspects of your case.


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BACK PAY


An employee may complete their work but not receive the compensation to which they are entitled. As a result, the employer will be forced to make up the lost time. The amount of money owed to an employee but not paid by the employer is known as back time pay. This can include raises, overtime, bonuses, and wages that an employee is entitled to but did not earn in the past. Back pay in California is equivalent to unpaid wage, except that back pay is normally measured after the employer has been found to have broken any wage or hour rules.


For example, if the employer measured the salary incorrectly, the employee could have been underpaid for previous jobs. The California Division of Labor Standards Enforcement (DLSE) will recalculate the amount the employee was entitled to, and the employee will be told that he or she may obtain back time. The employee may also become aware of the error and request back pay. Back pay could be calculated by multiplying the employee's gross unpaid hours by the hourly wage.


In California, back pay or back time refers to wage and hour law violations involving an incorrect or under-calculation of the amount owed to an employee. This may entail:

  • Food and rest breaks are not compensated.

  • Infractions of the overtime rule

  • Violations of the minimum wage

  • Misclassification as exempt

  • Sick leave that is not compensated

  • Reimbursements that have not been received

  • H2 deductions on the job that aren't legal

  • Job done "off the clock"


Understanding How Much Money Is Owed in Penalties, Interest, and Back Pay


The amount due for back wages and back pay varies depending on the employer's conduct and violation. If the back pay was due to a mistake and there was no deliberate misconduct, you might be entitled to:

  • Wages that have not been received as a result of a miscalculation

  • Unpaid salaries are subject to a yearly interest rate of up to ten percent.

For labor code breaches that resulted in back pay and unpaid wage, the employer could be liable for fines and damages. In this scenario, back time payment may include:

  • Wages that have not been received as a result of a miscalculation

  • Unpaid salaries are subject to a yearly interest rate of up to ten percent.

  • Your employer may owe you one hour's wages for each break you missed if you did not get rest or meal breaks

  • Court expenses and legal fees

If your employer knowingly underpaid you and the errors were not due to a good-faith mistake, you might be entitled to double damages.


Back Pay for Overtime


California has an overtime standard that allows employers to pay qualified workers for hours worked in excess of the usual eight in a day. Even if overtime was not allowed in the first place, the state mandates that it be charged. In California, the employer or boss has a right to know how many hours the employee works. It is also their responsibility to inform their employees when their work hours are up. As a result, employers are responsible for the unpaid overtime hours.


Employees are entitled to extra pay if they work for more than 40 hours a week. They are also often entitled to a time-and-a-half pay if they work for seven days straight during a workweek. On the seventh day, the salary should include the first eight hours of work. As a result, if your employer failed to compensate or count you for extra hours worked, your back pay bonus will include time and a half of your regular hourly rate for each hour worked overtime. If an employee works for more than eight hours for the seventh day in a row (or more than 12 hours in one day), they might be entitled to double pay.


Not all employees are eligible for back pay for overtime worked. Non-exempt hourly employees are permitted, but other types of workers are not. White-collar workers who do technical, high-level administrative, and managerial work are the most common exemptions. This means that unless the employer can prove you qualify for one of these exemptions, you are entitled to overtime pay.


Your employer could owe you the difference between what you should have been paid and what you were actually paid if you were not paid for overtime hours. In addition to your regular salary, you can earn half of your hourly wage in time-and-a-half back pay. If your daily rate is $12 an hour, for example, you can earn $18 in back pay. You'll be paying $24 per hour if you work double time.


Claims for Minimum Wage


If your employer wasn't able to pay you the minimum wage for each hour you work, you might be entitled to liquidated damages. Liquidated damages are intended to compensate for injuries that are difficult to quantify. According to California law, your employer's action or omission in failing to pay the minimum wage has caused you to incur additional damages. You are entitled to a liquidated list of damages equal to the sum of missed income if you were not paid at least the applicable minimum wage for the hours worked. For example, if you were legally entitled to $16 per hour but were only paid $13 per hour, you would be entitled to $3 in back pay for each hour worked. If you worked 85 hours in a pay period, for example, your employer would owe you $170 in liquidated damages plus $170 in unpaid wage.


Rest Periods and Missed Meals


Employers in California are required by law to give their workers a paid 10-minute break for every hour worked, as well as an unpaid 30-minute meal break after 5 hours. For workers who work more than 10 hours, another unpaid 30-minute meal break should be given. As a result, an employee is owed one hour of pay at their regular rate for each workday during which their employer fails to include a meal break. This maxim also applies to rest periods. For example, if you work an 8-hour shift without meal or rest breaks, you might be entitled to two hours of overtime, which includes one hour for missed rest breaks and one hour for missed meal breaks.


Violations of Wage Statements


Employers in California are expected to provide information to their employees about their paychecks, such as the hours worked, the hourly rate, taxes, gross pay, and so on. This detail is normally found on the pay stub of the employee. As a result, you could be entitled to wage statement penalties if your employer-provided incorrect information or completely refused to provide the necessary information. Your employer will be liable for $50 for the first breach of the wage statement and $100 for each subsequent violation.


Penalties for Waiting Time


If you're dismissed from a job in California, you have the right to collect your final salary at the time of termination. If you left and gave at least 72 hours' notice, you have the right to collect your last paycheck right away. If you leave without providing 72 hours' notice, your employer has 72 hours to provide your last paycheck. Pay for all unused, accumulated sick days, and reimbursement for all hours worked must be included in the final check. If your check arrives later than needed by law or does not contain all of your owed salaries, you might be subject to waiting penalties.


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Any day your employer withholds your salary, you are entitled to a full day's pay at your normal pace. For example, if your employer is 10 days late with your paycheck and you receive $80 a day, you might be entitled to $800 in waiting time penalties from your employer.


When calculating back pay, there are a few things to keep in mind.


When determining the amount of back pay you are due and the amount you can expect to earn, there are a few things to bear in mind. One factor to remember is that employers in California are forced to compensate their workers' interest on salaries that they have refused to pay. Although the DLSE will measure the total back pay and interest, it will still be limited to the state cap of 10%. Another consideration is the statute of limitations in California for cases of unpaid or underpaid wages. If you expect back pay, you typically have three (3) years to make a wage claim or file a lawsuit.


Employees in California are entitled to back pay.


Employees are classified as excluded or non-exempt under California's wage and hour laws. Employees who are not exempted are still entitled to back pay, whether they are hourly or salaried. They include people who work in scientific, vocational, mechanical, clerical, or similar jobs, regardless of the payment is on commission, by piece, time/hours worked, or any other rate. Exempt workers could be exempt from overtime and lunch break rules. Independent contractors, white-collar jobs, and commission-based employees can all fall into this category.


Contractors


An independent contractor is an employee who works for another person in California. An independent contractor is a worker paid a set amount for a particular product, but he or she maintains the power of how the work is performed. Even if the worker employed is an independent contractor, the worker would still be considered an employee if the arrangement with the individual who has ordered the services is more of an employer-employee relationship. The worker will be safe as an employee under California labor, wage/hour, and lunch break laws in this situation.


White-Collar Workers


Individuals who normally serve in technical, managerial, executive, or administrative works are classified as white-collar work/jobs. In order to be considered as an exempt white-collar worker in California, a worker must meet certain criteria. These are as follows:


Taking Legal Action Against an Employer for Unpaid Wages


Suppose your employer has broken California employment laws. In that case, you have the option of filing a compensation claim with the California Labor Commissioner's Office or filing a case in court to recover back pay, interest, and fines. Employer lawsuits for wage and hour violations in California can include:

  • Employees are misclassified as self-employed

  • Overtime bonus is not paid

  • Failure to have adequate rest periods

  • Meal breaks not being given

  • Wage payments are late

  • Failure to pay the minimum wage set by the county or city

  • requiring an employee to work outside of normal business hours

  • Failure to pay the minimum wage in California

  • Employees are misclassified as exempt

Back pay can be reclaimed in a variety of ways. For example, if an employee was promised a promotion that would have resulted in a higher salary, but the employer failed to deliver, the employee would obtain back pay in the following paycheck. In such cases, a judge may decide that an employer violated California wage and hour laws, and a court order may be issued forcing the employer to pay back pay to the affected workers. The Wage and Hour Division of the Department of Labor can also become involved to ensure that the workers receive their back pay as ordered by the court.


On the other hand, back pay may be requested under the Fair Labor Standards Act's various federal contract laws (FLSA). Employees who have been unlawfully refused overtime compensation are entitled to the regular overtime pay rates under the FLSA. Employers must now pay employees (at the very least) the minimum wage in back pay. It's worth noting that if a worker has already earned their back pay (or if the Secretary of Labor has already filed a claim), they cannot bring a private claim.


When an employer has violated wage and hour regulations against multiple workers, a group of workers and Employment Law Attorney may bring a class-action lawsuit. Unpaid wages for missed rest breaks, meal breaks, or overtime hours worked are common examples.


It is in the claimant's best interest to retain an experienced California Employment Law Attorney when they're filing a wage and hour claim. An Employment Law Attorney will explain your worker's rights to you. They will be able to file a wage claim or a lawsuit on your behalf. This might allow you to recover your unpaid wages.


When is a worker entitled to back pay?


Workers in California could be entitled to back pay if their salaries and benefits are lost as a result of their employer's wrongful behavior. As a result of wrongful termination due to sexual discrimination or a hostile work climate, the majority of workers earn back pay awards. Wrongful job policies include the following:

  • Refusing to pay overtime

  • Refusing to give promised promotions

  • In a workplace discrimination situation, firing a worker.

  • Withholding wages after an employee exposed workplace wrongdoing or discouraging them from doing so


Back Pay Lawsuits in California: What Is the Statute of Limitations?


Back pay claims in California are subject to a statute of limitations. This ensures you only have a certain amount of time after a wage violation to make a wage claim or file a lawsuit. If the time limit has passed, you will be unable to file a petition for back pay. The amount of time you have to file a case in California for back pay is usually determined by the form of claim. Most California wage and hour offenses have a three-year statute of limitations from the date of the most recent violation.


For back pay violations involving breach of contract claims, the time limit is 2 to 4 years. If the unpaid wage dispute is based on an oral contract, it must be filed within two years, and if it is based on a written agreement, it must be filed within four years.


You have two years from the date of the wage breach to file a wage claim with the FLSA. If the employer had continued wage violations for the two years prior to the lawsuit being made, the employee would be able to recover wages. On the other hand, back pay cannot be awarded for crimes that predate the statute of limitations.


It's important to file a claim/lawsuit within the time limit set by the court, or the court will dismiss your claim. Consult a California Labor Lawyer as soon as possible to ensure that your claim is filed on time and that you are still entitled to the full amount of money you are due. If an employer knowingly violates the FLSA, however, a three-year statute of limitations applies.


How to Determine Whether You Owe Back Pay and Wages


After a California DLSE audit, most workers know if their boss owes them back pay. The organization can give the employee a notice telling them that they are entitled to back pay and wages as a result of their employer's breach of state or FLSA wage laws. However, the DLSE does not catch all wage and hour violations, so it may be up to the employee to decide how much they should be paid in a pay period and equate it to what they are currently paid.


Non-exempt workers in California are entitled to the following benefits:

  • Breaks for lunch

  • With the passage of time (whether allowed or not)

  • Restriction on working hours outside of normal business hours

  • The minimum wage

Employees should follow the following guidelines from the California Department of Industrial Relations to ensure that they are paid their full wages:

  1. Both pay stubs should be kept. Wage statements must provide details on earned income, pay period dates, and deductions.

  2. Keep track of all of your working hours. Every workday, an employee should record the time they start and finish working and when they take meal or rest breaks, and the total number of hours they worked.

It's also worth remembering that whether you report wage and hour violations, file an unpaid wage complaint, or cite wage and hour violations, and the employer cannot discriminate against you or fire you.


PAY SHIFT


If you work for a business that is open 24 hours a day, seven days a week, there might be a policy in place that pays you a premium wage for working less desirable shifts. This is referred to as "change compensation." No employer is legally obliged to offer shift pay, and there are no wage and hour regulations that guarantee this right at the federal or state level. If the business in question has promised you this higher salary as a condition of jobs, they are required to pay it.


What is Shift Pay, and how does it work?


There are businesses that are open 24 hours a day, seven days a week, including weekends, evenings, nights, and even holidays. Employees can experience negative consequences as a result of working some of these less desirable shifts. As a result, the business in question can try to persuade its employees to work these shifts by paying a premium wage on top of the standard rate. The "shift differential" is the difference between this shift pay and the daily wage.


It is not mandatory to provide this shift differential because it is not mandated by law; however, many businesses believe it is in their best interests to do so. This incentivizes their workers to accept these sporadic work schedules.


Any arrangement to provide shift pay is between the employee and the concerned employer. If the agreement is verbal, it will be implied, but if it is written, it will be explicit. Since shift pay is not required by law, any claim for unpaid shift pay must be based on a breach of the employment contract. Essentially, the legal team would argue that the parties had some kind of arrangement for higher pay, and the employer had not kept their end of the bargain. This would be a contract violation, and the federal Fair Labor Standards Act would apply (FLSA).


Additionally, if the employee is a member of a union, they will use their "collective bargaining" power to insist that this shift pay clause be included in their employment contracts. If the employer has violated any of the employment contract terms, the employee has every right to seek remuneration.


Standard shifts that pay the daily rate of pay are normally scheduled during the day, Monday through Friday. To put it another way, shifts that start at 8 or 9 a.m. and finish at 5 or 6 p.m. are considered normal and do not require shift pay. Swing shifts or second shifts are shifts that start early in the afternoon, about 4 p.m., and end late at night, around midnight. "Graveyard shifts" or "third shifts" are overnight shifts that start about midnight and finish around 8 or 9 a.m. Third shifts are paying marginally more than second shifts on average. Time and a half, or the daily rate multiplied by 1.5, is normally charged for holiday changes.


These shift differentials are most prevalent in manufacturing and production employment, with over 80% of manufacturing firms employing shift pay to motivate employees. It's also popular in other industries: 60 percent of customer service companies and about half of transportation and distribution companies sell these premiums. It should also be remembered that nurses are offered shift pay 48 percent of the time in the healthcare sector, while doctors are only offered shift pay about 10% of the time. You can ask your Labor Lawyer for anything that's still unclear.


How Can You Calculate the Premium Rate?


There is no uniform way to make premium rate payments because differential compensation is corporate policy and not governed by wage and hour laws. Most businesses will have internal guidelines about how this method operates, which will be spelled out in either the employee handbook or the employment contract if one is available.


Employers usually measure premium rates for shift differentials using one of two approaches. They may employ a "flat rate formula," which entails adding a fixed sum to the normal rate of pay. They may also use the "percentage process," which involves multiplying the employee's daily rate of pay, or "base rate," by a percentage to determine the shift pay premium. The base pay, which is also known as "straight-time," is made up of an hourly wage calculated at the time of the employee's hiring.


The majority of businesses are evenly divided on whether they use a flat rate or a percentage form. In the United States, 49 percent of businesses use the flat-rate system, and 47 percent use the percentage method.


Furthermore, since shift differentials are so general, there are average percentage amounts that apply to all industries that use them. The difference for swing shifts (from 3 p.m. to midnight) is, on average, 7.5 percent higher than the base point. The difference for graveyard shifts (from 11 p.m. to 8 a.m.) is, on average 10% higher than the base rate.


Shift differentials may also be available to salaried workers. This is normally accomplished by giving the employee a higher percentage of their base salary. Approximately 25% of employers pay premiums to salaried workers for shifts that are not normal weekday shifts in all sectors. For salaried swing shifts, the average shift differential is 23%, and for salaried graveyard shifts, the average shift differential is 20%.


Since there is no legal obligation to give the difference, the percentage sum offered would be determined by the company in question. Instead of paying shift differentials, certain employers provide extra paid time off to workers who work these unfavorable shifts.


Premium Rates and the Factors That Influence Them


Premiums for shift differentials can vary based on a number of variables. Job role, employee level of accountability, trade union involvement, and impact on individual employment, workplace, and shift form are all factors to consider. When compared to other workers working the same shift, employees with extensive duties, such as supervisors and/or managers, are more likely to qualify for higher shift differential premiums. In certain situations, the employee's seniority is taken into account when calculating the premium rate.


Furthermore, the existence of a union and membership of one alters the power relations between employee and employer dramatically. Unions change the power balance to be more equal by pooling all of the employee's interests and exploiting collective bargaining rights. Unions are also in charge of ironing out the last aspect of an employee's contract, such as calculating change differential premiums. Any and all union deals would be written contracts, theoretically giving you an extremely strong argument if your employer fails to pay you your premium wages.


If overtime premium salaries are needed, the difference must be factored into your normal hourly rate of pay. Many employers pay employees the overtime premium at one and a half (1.5) times their hourly rate when they work overtime. They might, however, make the mistake of treating shift differentials as a separate and distinct compensation object. While it's probable that this was a mistake made in good faith, the employer's inability to factor the shift pay difference into your daily rate of pay would almost certainly result in you being underpaid. This requires overtime compensation if you worked more than 40 hours in a week and worked frequent, high-wage shifts.


Employees may be eligible for more than one shift pay difference in some situations. Until overtime calculations can be made, all of these premium rates must be factored into the normal rate of pay.


Suppose your employer fails to include the differentials in your daily rate. In that case, this is a violation of the Fair Labor Standards Act (FLSA) and the Department of Labor which imposes financial penalties on your employer (DOL). You will be entitled to back pay in the same way as you would be in any other situation involving unpaid salaries.


Minimum Wage and Shift Pay


It's also worth mentioning that the base rate must still adhere to federal and state minimum wage laws. In other words, it is almost always unethical for the employer to pay you less than minimum wage, regardless of the circumstances. The California Labor Code, Section 1197 LC, contains a few very unique exceptions. When deciding the daily rate of pay in an unpaid wage case to recover shift differentials owed to you, the most generous rule is used.


There may also be city or county statutes that set minimum wage standards in addition to federal and state laws. This is especially true in Los Angeles County, which has a higher minimum wage than the rest of California.


Finally, if you are a member of a union with collective bargaining power, the union might have its own minimum wage conditions. If this is the case, you'll need to hire a legal team who knows federal and state labor rules and how union by-laws deal with the broader case of unpaid wage.


Finally, beginning January 1, 2019, businesses in Los Angeles County with at least 26 workers must pay a minimum wage of $14.25 per hour, while businesses with less than 25 employees must pay a minimum wage of $13.25 per hour.


What are the Risks of Shift Work?


Staff can become fatigued, tired, and chronically lacking sleep as a result of the atypical work schedule associated with swing and graveyard shifts. Working in these environments makes employees more vulnerable to mistakes and/or injuries, which can put both the worker and the general public at risk in some industries. Employees in the manufacturing and processing industry, which also uses shift pay, must be alert when operating heavy machinery as part of the manufacturing process. If an employee is too exhausted to work, they risk injuring themselves or another employee in a serious or even fatal accident.


Transportation and distribution firms are in the same boat. Staff must drive whatever goods are in question during late hours or even overnight in these cases. If the worker in question falls asleep at the wheel or loses concentration, they can endanger themselves and others on the road.


This is also true for nurses in the healthcare industry. Hospitals, of course, never close, and personnel and health care providers must be available at all times of the day and night. In order to provide reliable and adequate medical treatment to hospital patients, these practitioners must always be alert.


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Many of these dangers happen because frequent shifts make it difficult for employees to get enough sleep. According to studies, sleep after night work is usually shorter and less refreshing than sleep during usual nighttime hours. Furthermore, our minds and bodies slow down at night and early in the morning. Working these atypical changes can also cause the worker to become estranged from family and friends, as their job schedule becomes essentially the polar opposite of everyone else's. The stress of working shifts can aggravate pre-existing medical conditions such as heart disease and/or digestive problems. Owing to feelings of alienation from family and friends, it can also trigger anxiety or depression.


It's best to try to protect shift differentials for an atypical work schedule for these reasons. If your boss agrees, either orally or in writing, it is important that they follow through with their commitment to pay you these higher salaries. Failure to do so is a legally actionable labor violation that can lead to an unpaid wages case. You have made sacrifices for the business, and any back pay from these premium salaries is due to you. While it is often preferable to have any payment agreement in writing and incorporated into an employment contract, California labor law also recognizes verbal agreements as legally binding.


What Is A Split-Shift And How Does It Work?


A split shift occurs in California when a worker's routine is disrupted by an unpaid, non-working interval of more than sixty (60) minutes. If the shifts are separated by at least one (1) hour, the employee is entitled to one (1) extra hour of pay at least equal to the minimum wage rate. Keep in mind that the minimum wage provision that is the most generous to the employee would be used. Furthermore, this time off is not a lunch or a rest period, and it must be for the employer's good.


This one (1) hour of minimum wage pay is referred to as a "split-shift premium" since it is a type of shift pay. Employees who are earning more than the minimum wage might be eligible for a split-shift premium; however, the higher their wages, the lower the split-shift premium. The California court of appeal in Aleman v. Airtouch Cellular, 4th California Appellate, ruled in 2012 that a split-shift fee is not due if the employee's salaries are significantly higher than the minimum wage.


It is not called a split-shift if the employee demanded a break in the work schedule. Additionally, if the employee in question lives on the premises, they are not subject to the split-shift premium.


And if an employee's shift spans several workdays, they will still be eligible for the split-shift premium. This is because the workday is determined by the employer and is not based on a calendar day. The employer can define the workday in any way they see fit, as long as it is not done to avoid paying premium wages. Some unethical employers use this strategy to avoid paying overtime, shift pay, and split-shift premiums.


The California Industrial Welfare Commission has released a pay order guaranteeing this split-shift premium for minimum wage jobs (also known as the IWC). The Division of Labor Standards Enforcement of the California Department of Industrial Relations (also known as the DIR) is in charge of enforcing these wage orders (also known as the DLSE).


Split-Shifts vs. Extended Shifts


However, there are restrictions on how split-shift premiums may be charged to workers. In the case of Securitas Security Services USA, Inc. v. Superior Court, the California Court of Appeals ruled against the plaintiffs in 2011. The plaintiffs argued that if an employee worked a two-day shift, they were entitled to a premium salary.


The plaintiffs, in this case, served as security guards for Securitas Security Services on the graveyard shift. The business (Securitas) decided that its workday started at midnight and ended at midnight the next day. As a part of this workday arrangement, security guards were assigned to shifts that started one day and finished the next. The plaintiffs in the case argued that they were entitled to split-shift premiums because their shift ended in the morning, and they had to start their next shift several hours later that day. In this case, the California Court of Appeals ruled against the plaintiffs. Employees who work uninterrupted overnight shifts are not entitled to split-shift premiums, according to the court. In other words, the court ruled that these overnight changes did not have an appropriate "split."


As a result, you can seek legal advice from someone who can guide you through the nuances of California labor laws. In certain cases, it can seem that different parts of the law contradict each other, so you'll need an experienced legal team to make sure you get your unpaid wage back.


Are your premium wages being withheld by your employer?


All of this can seem to be much too complex. On the other hand, many workers would be able to tell whether their boss is intentionally underpaying them. All premium salary calculations must be tabulated and included in every paystub sent to the employee, for starters. Keeping as much tangible proof as possible is usually a good idea. It strengthens your unpaid wage argument if you can provide your legal team with an incontrovertible paper trail showing that your employer withheld these premium wages.


Both federal and California labor laws expressly prohibit an employer from intentionally and maliciously withholding premium pay from an employee. If you believe your employer has been attempting to do so, you can contact an Employment Law Attorney who specializes in unpaid wage cases and file a complaint and/or lawsuit to reclaim your wages. The numerous wage and hour laws cover all premium wages, including overtime, shift pay, and split-shift premiums.


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