The Division of Labor Standards Enforcement ("DLSE") administers and enforces all labor laws not specifically under the jurisdiction of other state agencies. California Labor Code Section 95. The Chief of the Division is known as the Labor Commissioner. Section 21.
An employee who has not been paid wages or other benefits due in accordance with law may file a complaint with the DLSE and seek its assistance in collecting them. When certain types of employee claims are filed, the Commissioner must take assignments of the claims. These include:
- Wage claims;
- Mechanic's and labor liens;
- Return of workers' tools; and
- Certain penalties and claims for damages for misrepresentation of conditions of employment. Sections 96, 300.
The Commissioner and Deputies have free access to all places of labor. It is a misdemeanor to refuse them admission or willfully fail to furnish requested records or other information. Section 90. These officials may issue subpoenas to compel the attendance of parties and witnesses and the production of books, papers and records. They may administer oaths, examine witnesses under oath, and take depositions. Section 92.
During the Commissioner's investigation of an employee claim, the employer may be given a notice to appear for an informal conference before a Deputy Labor Commissioner. If the claim is deemed valid, the Deputy Labor Commissioner will compute the amount owed the employee and attempt to settle the matter informally. If the matter cannot be settled, the employer will be issued a notice that wages are due, and a hearing will be scheduled, usually before a different Deputy Labor Commissioner from the same office as the one who conducted the informal conference. A copy of the complaint is sent to the employer, who has 10 days to file an answer. Failure to file an answer does not result in default, but at the hearing evidence on matters not pleaded in the answer will be allowed only on terms and conditions imposed by the Commissioner. Section 98(e).
Hearings are phonographically recorded. The hearing need not be conducted in accordance with technical rules of evidence. 8 California Code of Regulations, Section 13502. The parties may be represented by counsel, but representation is not required. 8 California Code of Regulations, Section 13507.
Within 15 days after the hearing is conducted, the Commissioner issues a ruling and award. If neither party files a timely appeal, the award is final and enforceable as a judgment by the appropriate court. Section 98.2(d). A party may file an appeal to the court of appropriate jurisdiction within 10 days. Although the statute calls this filing an "appeal," the court actually considers the matter de novo (i.e., anew, afresh, a second time, once more). Section 98.2. If the employee does not challenge any part of the Commissioner's final award on appeal, the Commissioner will provide a trial attorney to represent the employee in these de novo proceedings. Section 98.4. Thus, the employee receives free legal representation while the employer pays the cost of its own defense. Furthermore, if the employer loses the appeal, the employer must pay the Commissioner's cost and reasonable attorney's fees. Section 98.2(b).
An employer contemplating a hearing before the Commissioner must resolve a dilemma: If the employer offers all of its witnesses in evidence, the employer might win and save the expense of a court trial. On the other hand, if the employer presents its evidence and loses, it has incurred the cost of proceeding in an unfavorable forum and needlessly disclosed its defense. It is sometimes in the employer's interest not to defend itself before the Commissioner, but instead to reserve its defenses for court.
If an employer willfully fails to pay any wages due an employee who is discharged or quits, the employee's wages continue to accrue at the same rate as a penalty, from the due date until paid or until an action is commenced, up to a limit of 30 days. Section 203.
Although criminal sanctions can be imposed for certain wage and hour violations, a DLSE subpoena is not a "search" for criminal evidence. Consequently, it need not meet the probable cause standards applicable to search warrants under the Fourth Amendment. Nor is it a violation of the Fifth Amendment's protection against self-incrimination; an employer has no reasonable expectation of privacy against judicially compelled disclosure of records required to be maintained by an employer under the Labor Code.
The DLSE may also subpoena documents from an employer to determine whether the employer has been properly paying vacation benefits to its employees on termination of the employment relationship.
The Labor Commissioner may prosecute a civil action to recover unpaid minimum wages or unpaid overtime compensation, including interest, on behalf of any employee or class of employees, with or without their consent. The Commissioner may recover (on its own behalf) reasonable attorneys' fees and costs in any such action. Section 1193.6.
The Labor Commissioner also may file a civil action to collect wages, penalties, and demands of persons who the Commissioner believes have valid and enforceable claims but cannot afford counsel. Section 98.3(a).
Any employee seeking recovery of minimum wage or overtime compensation is entitled to recover in a civil action the unpaid balance of the full amount of compensation, together with interest and reasonable attorneys' fees. Section 1194(a).
An employer is liable for triple the amount of any damages arising from the willful failure to pay employee wages within 10 days after receipt of a notice from the Labor Commissioner of a determination that wages are due. Section 206(b). This liability does not mean triple the amount only of the unpaid wages; rather, it means all damages flowing consequently from the employer's failure to pay. The term "wages" is broadly defined (Section 200), and has been held to include vacation pay and severance pay. However, Section 206 does not apply to employers who, within 10 days of receipt of the notice from the Labor Commissioner of a determination that wages are due, exercise their rights under Section 98.2(a) by filing for a trial de novo to challenge the wage claims.
The statute of limitations for all claims involving minimum wage, overtime claims or wage order violations is 3 years. California Code of Civil Procedure Section 338(a).
A willful refusal, after demand, to pay wages due and payable is a misdemeanor punishable by a fine of up to $1,000 and imprisonment for up to 6 months, or both. Sections 23, 216. A penalty of at least $100 or imprisonment of at least 30 days, or both, may be imposed on an employer who violates state laws concerning maximum hours of work, minimum wages, or equal pay. Section 1199.