Wage Claim

What Is a Wage Claim?

A wage claim is a formal administrative complaint filed by an employee (or former employee) with the California Division of Labor Standards Enforcement (DLSE) seeking recovery of unpaid wages and related penalties. The wage claim process provides a free, relatively informal alternative to filing a lawsuit for workers who believe their employer has violated California wage and hour laws.

For California employers, understanding the wage claim process is essential because these claims are common, can result in significant financial liability, and often signal broader compliance problems that may affect multiple employees.

Types of Wage Claims

Employees can file wage claims for various types of unpaid compensation:

Claim Type	Description	Common Scenarios
Unpaid wages	Base wages not paid	Hours worked but not compensated
Minimum wage	Pay below minimum wage	Incorrect rate, improper deductions
Overtime	Unpaid overtime premium	Off-the-clock work, misclassification
Meal break premium	One hour pay for missed breaks	Working through meals, late breaks
Rest break premium	One hour pay for missed breaks	No breaks provided, interrupted breaks
Vacation/PTO	Accrued but unpaid time off	Not paid at termination
Commissions	Earned but unpaid commissions	Disputes over commission calculations
Bonuses	Earned but unpaid bonuses	Non-discretionary bonus not paid
Expense reimbursement	Unreimbursed business expenses	Mileage, tools, uniforms
Waiting time penalties	Penalties for late final pay	Final wages not timely paid

The Wage Claim Process

Step 1: Filing the Claim

Employees initiate the process by filing a claim form with the DLSE:

Required Information:

Employee's contact information
Employer's name, address, and contact information
Dates of employment
Wages claimed as owed
Description of work performed
Pay rate and pay schedule
Supporting documentation (pay stubs, time records, etc.)

Filing Options:

Online through DLSE website
In person at any DLSE office
By mail to regional office

Deadline: Generally within three years of the violation, though some claims have shorter limitations.

Step 2: Initial Review

The DLSE reviews the claim for:

Jurisdiction: Does the DLSE have authority over this claim?
Completeness: Is the claim form properly filled out?
Validity: Does the claim state a viable legal theory?
Coverage: Is the employee covered by California labor laws?

Claims that pass initial review are assigned to a Deputy Labor Commissioner.

Step 3: Notice to Employer

Once a claim is accepted, the DLSE notifies the employer:

Notice Contents	Purpose
Copy of the claim	Inform employer of allegations
Conference date	Schedule settlement conference
Response instructions	How to submit employer's position
Document requests	Records to bring to conference

Important: Employers must take this notice seriously. Ignoring it can result in a default judgment.

Step 4: Settlement Conference

The settlement conference is an informal meeting where both parties attempt to resolve the claim:

Conference Participants:

Deputy Labor Commissioner (presides)
Employee (may bring representative)
Employer (should bring someone with settlement authority)

Conference Process:

Deputy explains the process and each party's rights
Employee presents their position and evidence
Employer responds with their position and evidence
Deputy facilitates discussion toward resolution
If agreement reached, settlement documented
If no agreement, hearing date set

Settlement Rate: Approximately 70% of wage claims resolve at the conference stage.

Step 5: Hearing (Barcena Hearing)

If settlement fails, the claim proceeds to a formal hearing:

Hearing Characteristics:

More formal than conference, less formal than court
Deputy Labor Commissioner presides as hearing officer
Testimony given under oath
Both parties may present evidence
Cross-examination permitted
Rules of evidence relaxed but applied
Typically completed in one session (2-4 hours)

Evidence Rules:

Hearsay may be admitted but given less weight
Business records generally admissible
Employee testimony presumed credible
Employer bears burden on many issues (records, break provision)

Step 6: Order, Decision, or Award (ODA)

Following the hearing, the Deputy Labor Commissioner issues a written decision:

ODA Contents:

Findings of fact based on evidence
Conclusions of law applying California Labor Code
Award of wages owed (if any)
Assessment of penalties and interest
Waiting time penalties (if applicable)
Total amount owed

Timing: ODAs typically issued within 15-30 days of hearing.

Calculating Wage Claim Exposure

Wages Owed

The base amount of a wage claim includes all unpaid wages:

Wage Type	Calculation	Documentation
Regular wages	Hours worked × regular rate	Time records
Overtime	OT hours × 1.5 or 2.0 × regular rate	Time records, schedules
Meal premiums	Missed meals × 1 hour pay	Meal records, testimony
Rest premiums	Missed breaks × 1 hour pay	Rest records, testimony
Unpaid vacation	Accrued hours × final rate	Policy, records

Penalties

In addition to wages owed, employers may face various penalties:

Penalty Type	Amount	When Applicable
Waiting time penalties	Up to 30 days' wages	Final pay not timely provided
Wage statement penalties	$50-$100 per violation, up to $4,000	Pay stub errors or omissions
Minimum wage penalties	$100+ per violation	Minimum wage not paid
Liquidated damages	Equal to wages owed	Minimum wage violations
Interest	10% per year	On all wages owed

Example Exposure Calculation

Consider an employee who worked for one year, was denied meal breaks twice per week, and was terminated without receiving final pay:

Component	Calculation	Amount
Meal break premiums	2/week × 52 weeks × $20/hour	$2,080
Interest (10% for 6 months)	$2,080 × 10% × 0.5	$104
Waiting time penalties	30 days × 8 hours × $20	$4,800
Wage statement penalties	26 pay periods × $50	$1,300
Total Exposure		$8,284

This example shows how a relatively small underlying violation can multiply through penalties.

Employer Rights in Wage Claims

Right to Respond

Employers have the right to present their side:

Submit written response to the claim
Provide supporting documentation
Present witnesses at hearing
Cross-examine the claimant
Challenge the claimant's evidence

Right to Representation

Employers may be represented at all stages:

Representative	Advantages	Considerations
Attorney	Legal expertise, procedural knowledge	May cost more than claim value
HR professional	Company knowledge, lower cost	May lack legal expertise
Owner/manager	First-hand knowledge	May be emotionally invested

Right to Appeal

If dissatisfied with the ODA, employers can appeal:

Deadline: 10 days from service of ODA
Forum: Superior Court in county where claim arose
Standard: Trial de novo (fresh review)
Bond requirement: Must post undertaking equal to award amount
Jury trial: Available if demanded

Defending Against Wage Claims

Common Defenses

Defense	Application	Evidence Needed
Payment made	Wages were actually paid	Pay records, canceled checks
Exempt status	Employee was properly exempt	Job duties analysis, salary records
Waiver/release	Valid settlement previously reached	Written release, consideration
Statute of limitations	Claim too old	Employment dates, violation dates
Independent contractor	Not an employee	Contract, ABC test analysis
Meal break waiver	Valid waiver in place	Signed waiver, shift records
Rest breaks provided	Breaks were available	Policy, testimony, records

Critical Documentation

Employers should bring comprehensive records to hearings:

Essential Documents:

Complete time records for claim period
All pay stubs and payroll registers
Meal and rest break records/attestations
Employment agreement and policies
Wage acknowledgment forms
Final pay records
Any correspondence with employee
Job description and duties documentation

Burden of Proof Issues

California places significant evidentiary burdens on employers:

Issue	Burden Placement	Practical Impact
Hours worked	Employer (if records incomplete)	Must prove hours from employer records
Meal breaks provided	Employer	Must prove breaks were provided
Rest breaks authorized	Employer	Must prove breaks were available
Wages paid	Employer	Must prove payment was made
Exemption status	Employer	Must prove exemption applies

Important: If employer records are incomplete or missing, the DLSE may accept the employee's reasonable estimates of hours worked.

Multiple Claims and Escalation

Individual vs. Multiple Claims

When multiple employees file similar claims, employers face increased exposure:

Scenario	Risk Level	Response Strategy
Single claim, isolated issue	Lower	Defend or settle individually
Single claim, systemic issue	Higher	Address underlying problem
Multiple related claims	High	Consider global resolution
Claim becomes PAGA notice	Highest	Immediate counsel engagement

Warning Signs of Larger Problems

A single wage claim may indicate broader issues:

Same issue likely affects other employees
Plaintiff's attorney may be investigating
PAGA notice may follow
Class action risk increases
DLSE may initiate investigation

Best Practices for Wage Claim Prevention

Proactive Compliance

Policies and Procedures:

Clear written policies on all wage issues
Regular policy reviews and updates
Consistent policy application
Manager training on compliance

Record-Keeping:

Accurate time tracking systems
Meal break documentation
Rest break attestations
Complete pay stub information
Proper record retention

Payment Practices:

Timely payment of all wages
Accurate overtime calculations
Proper final pay procedures
Clear commission/bonus plans

Responding to Claims

When you receive notice of a wage claim:

Timeframe	Action
Day 1	Document hold, notify appropriate personnel
Days 2-5	Gather relevant records, review claim allegations
Days 6-14	Assess merit, calculate exposure, consider counsel
Days 15-21	Prepare response, organize documentation
Before conference	Identify settlement authority, prepare presentation

Settlement Considerations

Factors to weigh when considering settlement:

Favoring Settlement:

Strong evidence supporting claim
High exposure relative to settlement offer
Risk of claim expanding (PAGA, class action)
Cost of defense exceeds settlement
Desire to maintain relationship

Favoring Defense:

Strong evidence against claim
Low exposure if claim fails
Principle/precedent concerns
Fraudulent or bad faith claim
Insurance coverage available

Post-Claim Actions

If You Win

Even a successful defense requires action:

Review practices that led to claim
Document any needed improvements
Train managers on issues raised
Monitor for similar claims

If You Lose

An adverse decision requires immediate attention:

Payment:

Pay award within applicable deadline
Document payment carefully
Issue proper tax documents

Compliance:

Fix the underlying violation immediately
Audit for similar issues affecting others
Implement policy changes
Retrain managers and supervisors

Consider Appeal:

Evaluate merit of appeal
Consider bond requirement
Assess litigation costs vs. recovery
Decide within 10-day deadline

Wage Claim Statistics and Trends

Claim Volume

The DLSE processes tens of thousands of wage claims annually:

Average claim value: $5,000-$15,000
Most common claims: Unpaid wages, overtime, meal breaks
Resolution: ~70% at conference, ~30% at hearing
Success rate: Employees prevail in majority of heard claims

Industry Patterns

Certain industries see higher claim rates:

Industry	Common Claim Types
Restaurant/hospitality	Meal breaks, tips, overtime
Retail	Rest breaks, off-the-clock work
Construction	Overtime, prevailing wage
Healthcare	Meal breaks, overtime
Transportation	Overtime, piece-rate issues

Understanding the wage claim process helps California employers respond effectively when claims arise and implement practices that prevent claims from occurring. The relatively informal DLSE process makes it easy for employees to pursue claims, so proactive compliance remains the best defense.