The minimum wage is one a topic that, although controversial in amount, people seem to believe they truly understand. However, your employer may be engaging in certain tactics that prevent you from realizing the true minimum wage you are entitled to. The Attorneys at Miller Wilmers APC have engaged in employment audits that have highlighted the gross underpayment of employees companies engage in. 

Minimum Wage

The Country Minimum Wage has been a topic of serious criticism in the last few years. We have heard demands for a "livable wage" and the fact that the minimum wage has not increased anywhere near the increased cost of living or inflation in the same time period. 

Federal Minimum Wage

The Federal Minimum Wage is set by the Fair Labor Standards Act (FLSA) and enforced by the Department of Labor. The federal minimum wage rate is subject to change; however, it has not increased since 2009. The current Federal Minimum wage is set at $7.25 per hour at the time of writing this article. Although some states do follow the federal minimum wage, California does not. California provides much stricter standards in nearly all aspect of employment and of course, a higher minimum wage. 

California Minimum Wage

For the year 2022, California has a minimum wage currently set at $14.00 per hour for employers with 25 or fewer employees, and $15.00 per hour for employers with 25 or more employees.

For the year 2023, California will raise the standard for employers with 25 or fewer employees to $15.00 per hour while the larger employers will remain the same that year at $15.00 per hour.  

Special Rules by Municipality

Piece-Rate Work

A piece-rate plan is a compensation system where an employee is paid a fixed amount for completing a certain task; number of deliveries, number of units produced, actions completed and so on. This form of compensation is used in many industries, but we see it most commonly in the trucking and manufacturing industries. The point of this system of compensation is to incentivize employees to maximize their productivity to receive the highest possible compensation for their time. However, what is often the result is employers who use this as a means to pay employees below the minimum wage and blame the employee for why they receive so little compensation, often below the minimum wage for the actual amount of time worked. 

California requires minimum wage compensation for each hour worked and being on a piece rate compensation plan is no exception. Employers need to be sure their employees are being paid for time spent performing tasks other than those that earn piece-rate compensation which includes traveling to and from job sites, loading and maintaining vehicles, attending meetings, time spent training, communicating with the company for business related purposes and many other tasks. These tasks are often not included in the piece rate compensation plan as they do not further the number of units created, or deliveries made. This does not change the fact that the employee is required to do it and is thus, under the control of the employer and should be compensated for this time. 

My Employer Says I Agreed to Work for Less Than the Minimum Wage Per Our Employment Contract. 

A California employer must pay the minimum wage to employees, even if the employee agrees to work for less. An employment agreement that contractually allows an employee to be paid less than the minimum wage is invalid as a matter of law and will not be enforced in the courts. California's prohibition against waiving the minimum wage applies even to Union members whose terms of employment may be subject to a collective bargaining agreement. There is no excuse you are not receiving the minimum wage as a California employee. 

Minimum Wage Exceptions

California has provided lower minimum wages, or no wage at all, to certain categories of employees which are deemed for the benefit of the employee or society as a whole. Here are the following categories of employee who may receive a lower minimum wage or none at all:

• Learners: Learners are employees who are working a job in which they have no experience or no similar experience. Think interns. These employees may be paid at 85% of the minimum wage during the first 160 hours of employment, rounded to the nearest nickel, or about one month of a typical work schedule. Cal. Code of Tegs., tit. 8, sections 11010-11170. 
• Disabled Employees: Disabled employees may be paid a wage set by the Labor Commission for a period of one year (subject to renewal), if authorized by the labor commission. For clarity, this isn't any employee with a disability these are very select few employees with select disabilities at certain employers. 
  • Labor Code § 1191 states that “For any occupation in which a minimum wage has been established, the commission may issue to an employee who is mentally or physically handicapped, or both, a special license authorizing the employment of the licensee for a period not to exceed one year from date of issue, at a wage less than the legal minimum wage. The commission shall fix a special minimum wage for the licensee. Such license may be renewed on a yearly basis."
• Camp Employees: Camp Employees of an organized camp, as we often see for youth activities or at some universities to include student employees, camp counselors and program counselors can be paid 85% of the minimum wage for a 40-hour week, regardless of the number of hours per week they might work at the organized camp.  Labor Code section 1182.4(a). 
• Immediate Family Members: Immediate family members of an employer are not subject to the minimum wage laws and this includes parents, spouse, children or legally adopted children. Cal. Code of Regs., tit. 8, §§ 11010⁠–⁠11170. So yes, Dad can keep you sweeping in the family shop. 
• Certain Non-Profit Organizations: Non-profits that have special licenses issued by the Labor Commission can pay their employees less than the minimum wage. We tend to find this in sheltered workshops, food drives and other charitable organizations ran with heavy volunteer work. 

Independent Contractors

California's minimum wage only applies to employees, not independent contractors. However, we have found that a large majority of independent contractors in California have been improperly classified and are in fact employees being paid under the minimum wage or without overtime. Remember, as stated above, you cannot contract your rights to minimum wage away. 

If you have any Questions Related to Your Minimum Wage Rights, Contact Us for a Free Consultation.