In California, Wage Theft is Now a Felony

When we talk about not getting paid for work, we usually talk about violations of the Fair Labor Standards Act (FLSA), and situations where an employer unknowingly miscalculates hours, or takes tips from employees or other things are illegal,

Wage Theft

When a worker isn’t paid what he or she is due, it is considered wage theft. Normally we think of wage theft as an intentional act, as opposed to an accidental misunderstanding or miscalculation of how much a worker must be paid. However, any wages which include bonuses and commissions can have a devastating impact on an employee.  This is why it is considered wage theft. According to the Economic Policy Institue, billions of dollars in wages are stolen from workers by employers nationally every year.

Wage Theft is Now a Felony

California has strong wage theft laws, allowing situations where wages are stolen, to be treated as criminal grand theft (in addition to civil penalties allowing workers to sue for having wages stolen).

It used to be that instances of wage theft were just misdemeanors—now, they are felonies. That means potential time in jail for employers who cheat workers out of wages. It also allows state prosecutors much more leeway in conducting investigations into wage theft. Things like grand juries, or the issuance of search warrants, can now be used by prosecutors seeking to prosecute wage and hour theft.

The criminal penalties come into play when employers withhold or don’t pay more than $950 to any one employee, or $2,350 from 2 or more employees, in any 12 month period. Unlike many laws, this law applies even if the worker is an independent contractor, and it applies no matter how big the company, or how many employees the employer has.

What is Intentional?

These criminal penalties are for intentional acts by the employer, but the real question may be what is or is not intentional.

For example, an employer who accidentally divides tips amongst multiple non-tipped employees (a violation of the FLSA and California’s wage and hour laws), may still be guilty of a felony under the new law, because the decision not to pay the full amount of tips to the employee was intentional.

In other words, not understanding age and hour laws, or “innocent mistakes,” will not excuse the employer from criminal penalties.

Certainly, situations where employers are vindictive, or when they withhold wages or payments for retaliatory reasons, could be considered intentional acts. In some cases, simply paying someone a different amount than what was previously agreed to, could be intentional, as could docking pay as “punishment” for something done on the job.

Notices to Employees

The law also requires that employees be given notice of pay or sick leave or workers compensation benefits, once hired, and then anytime that any of these may change during employment. The notice to workers is required, even if the change is positive (such as an increase in wages).

Notice does not have to be provided to workers in a union protected by a collective bargaining agreement.

Contact the San Jose employment lawyers at the Costanzo Law Firm today if you feel that you haven’t been paid what you’ve earned at work.

Sources:

leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB1003

courts.ca.gov/opinions/links/S241812-LINK1.PDF#page=11