Wage-and-Hour Requirements

Minimum Wage

The California minimum wage is $8 per hour.

The federal minimum wage is set to increase as follows:

The federal and state minimum wages apply to all nonexempt employees working for covered employers, subject to limited exemptions and subminimum wage provisions. Employers must comply with the higher requirement (i.e., the state minimum wage).

State Exceptions: Exceptions that apply to certain agricultural employees include:

1. Learners (employees in occupations in which they have had no previous similar or related experience) may be paid a subminimum wage during their first 160 hours of employment. Learners may be paid not less than 85 percent of the minimum wage rounded to the nearest nickel.

2. A person whose earning capacity is impaired by physical disability or mental deficiency may be paid less than the minimum wage, if the employer first obtains a special license from the DLSE.

3. A parent, spouse, child or legally adopted child of the employer is not subject to the minimum-wage laws.

Piece Rates: Workers may be paid on a piece-rate basis for tasks that can be measured on a unit basis. During any given pay period, the piece rate may not amount to less than the minimum wage and must include compensation for any overtime worked.

Travel Time: Federal and state laws have similar requirements for the payment of wages for time spent by an employee while traveling. Generally, an employer must pay for travel time related to the job. Here is a summary of the rules for travel-time pay:

1. Travel to work and return home: Time spent traveling to and from work is generally not considered hours worked, no matter whether the employee works at one or several workplaces. Wages are therefore ordinarily not due for such commuting time. Typically, farm labor contractors direct employees to report to different work sites with a wide range of travel times. To avoid any misunderstanding, each employee should, when hired, acknowledge that travel distances will vary and that travel between the employee's home and job assignments is not compensable. A written statement should be given to each employee that describes the farthest destination in various directions to which the employee will have to report.

2. Travel before or after work hours: Time spent by an employee while traveling to execute an assignment as directed by the employer on the way to or from work must be compensated. An example of this is where the employer or its representative (e.g., foreman) tells the employee to check an irrigated field or retrieve spare parts in town while commuting to or from work. Normal commuting time need not be compensated.

3. Travel between job sites: Time spent by an employee while traveling between places of work (e.g., from field to field or from a field to some location to receive instructions or tools) must be compensated.

4. Transportation provided by employer: When the employer provides transportation to employees and requires them to ride in company-provided transportation, the time spent traveling must be compensated. In contrast, travel time need not be compensated where an employee may choose whether to ride in company transportation.

5. Travel to other work places or meetings: Time spent during an employee's normal working hours traveling out of town for an overnight business trip must be compensated, no matter whether the employee is traveling on a normal workday or on a normal day off. Likewise, all travel time of an employee who travels on a one-day assignment upon the employer's direction must be compensated.

6. Pay rate: Travel time may be compensated at any rate, as long as it is at least the minimum wage, the travel time is separately recorded, and the employer and employee agreed to the travel-time pay rate before the employee incurred the travel time.

Waiting Time: When an employee is "on duty," time spent waiting is considered time worked. For example, harvest employees who cannot work until a trailer arrives from the winery must still be paid while waiting. However, an employee completely relieved of duties need not be compensated, as long as the employee may leave the job, the period of time is long enough for the employee to use it effectively, and the employee is told when to return to work.

Preparation Time: Generally, both federal and state agencies view voluntary activities of employees performed before or after work, such as changing clothes or washing up, as not compensable. However, time spent performing preparatory or concluding activities that are an integral part of the job or required by law or company rules is compensable. Examples of compensable activities performed before or after work include changing clothes and washing up after applying chemicals as required by Cal/OSHA, and sharpening pruning shears.

Overtime

Non-exempt employees are entitled to premium pay for work performed during specified overtime periods. Most non-exempt non-agricultural employees may work up to 40 regular hours per workweek. Non-exempt agricultural employees in California may work up to six 10-hour days per workweek at their regular pay rate.

Federal: The federal Fair Labor Standards Act (FLSA) requires covered employers to pay an employee at the overtime premium rate of 1½ times the employee's regular rate of pay after 40 hours of work in a workweek. Certain types of work are exempt from this requirement, however.

One such exemption applies to persons employed in agriculture. Section 3(f) of the FLSA defines agriculture to mean both:

(1) farming in all its branches and among other things includes the cultivation and tillage of the soil, dairying, the production, cultivation, growing and harvesting of any agricultural or horticultural commodities . . ., and the raising of livestock, bees, fur-bearing animals, or poultry, and

(2) practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market.

Thus, the term "agriculture" has two distinct subsets:

1. The primary meaning of "farming in all its branches" and

2. A secondary and broader meaning that includes "practices incidental to or connected with farming performed by a farmer or on a farm."

Under the FLSA's secondary meaning of "agriculture," a farmer's employee who is engaged in packing or shipping commodities produced by only his employer is considered to be an agricultural employee. In contrast, a farmer's employee who, during a workweek, packs, ships or otherwise handles any commodity produced by another farmer is not considered to be an agricultural employee for that workweek.

State: Agriculturally related employees typically fall under one of these four orders of the Industrial Welfare Commission (IWC):

IWC Order No. 4 applies only to particular occupations rather than to an entire industry. Thus, it covers only persons engaged in professional, clerical, technical, mechanical and similar occupations employed by a business that is not covered by an industry order. Take, for example, an agricultural employer who employs only field workers and a secretary. An industry order does not apply to this employer. Order No. 4 therefore covers the secretary. (IWC Order No. 14 covers the field workers.) Other occupations often associated with agricultural employment that are covered by Order No. 4 are office clerks and bookkeepers.

IWC Order No. 8 covers employees of an employer engaged in an industry handling products after harvest, at least some of which were not grown or otherwise produced by the employer. It typically covers commercial establishments that clean, dry, sort, pack, dehydrate, slaughter, ferment or pasteurize a commodity. While Order No. 8 covers the office and transportation employees of such an employer, Order No. 14 covers the employer's field workers.

IWC Order No. 13 covers employees of an employer engaged in an industry preparing on a farm agricultural products for market. It typically covers an employer's employees who prepare for market, in either a fixed structure or on a moving packing plant on a farm, commodities grown or otherwise produced by that employer only, plus the employer's clerical employees and those who transport the commodities to market. Order No. 14 covers the employer's field workers.

IWC Order No. 14 is an occupational order, not an industry order. It thus covers only persons employed in an agricultural occupation on a farm or ranch. As noted in the above discussions of IWC Order Nos. 4, 8 and 13, other employees are covered by another IWC order. Employed in an agricultural occupation includes activities such as preparing the land for planting, caring for and harvesting of the crop and transporting it directly from the field to market or to the place of first processing. The term also includes the conservation, maintenance and improvement of the farm and its tools and equipment. While performing any of these tasks, an employee is covered by IWC Order No. 14.

Overtime Rules under Order No. 14: While working in an agricultural occupation, an employee must be paid at least 1½ times the employee's regular rate of pay for work performed after 10 hours in a workday or during the first 8 hours on the seventh day of work in a workweek. Such an employee must be paid double the employee's regular rate of pay for hours worked after 8 on the seventh day of work in a workweek.

Overtime Rules under Order Nos. 4, 8 and 13: An employee covered by one of these orders must be paid an overtime premium for work performed after 8 hours in a workday, after 40 hours in a workweek, or on the seventh day of work in a workweek. A covered employee must be paid at least 1½ times the employee's regular rate of pay for work performed after 8 and through 12 hours in a workday, after 40 hours worked in a workweek, or during the first 8 hours on the seventh day of work in a workweek. Such an employee must be paid double the employee's regular rate of pay for hours worked after 12 in a workday or after 8 on the seventh day of work in a workweek.

Which IWC Order Applies? Certain job activities employees now do did not exist when the classification definitions in the IWC orders were written more than 30 years ago. There is often no case law to guide employers on how to classify these new activities. Therefore, the next best thing is to see how the state Division of Labor Standards Enforcement (DLSE), which enforces the IWC orders, views these new activities. The DLSE booklet Which IWC Order? Classifications includes a table that lists for various agricultural commodities those operations the DLSE regards as Order No. 14 operations and those that are Order 13. For example, under "Grapes, Table," the Order No. 14 activities are "growing, thinning, girdling, pruning, typing, picking, pick-packing (field)." The Order No. 13 activities are "sorting, trimming, packing, fumigating, labeling, shipping."

Working Under Two IWC Orders: Sometimes an employee who usually works in an agricultural occupation performs non-agricultural work. For example, employees in asparagus operations may move between harvest activities and packing-shed work.

The rules for employees working under two IWC Orders in the same workday or workweek were set by a 1977 Superior Court decision in California Asparagus Growers Association v. IWC. Generally, a trial court's decision applies only to the parties in the case. However, the state Labor Commissioner has applied this decision throughout agriculture.

This decision allows an employer to have an employee work under both IWC Order No. 14 (Agricultural Occupations) and IWC Order No. 13 (Industries Handling Products on the Farm) in the same workday or workweek and still pay overtime after working 10 hours per workday or 6 days per workweek if the employee's work is properly scheduled and proper records of that work are kept.

The procedure to accomplish this feat is explained in a letter from the state Labor Commissioner. Here are excerpts of that letter:

In the decision the court ruled that,

1) Daily overtime is controlled by the "Order under which the employee is working when the daily overtime period is reached. . . ."

2) The provision of Order 13-76 for overtime for all hours worked over forty hours in the workweek shall be determined by counting only the hours worked under Order 13-76. Hours worked under Order 14-76 shall not be counted in such determination.

Federal Complication: Under the FLSA an employee who spends any amount of time during a workweek doing non-agricultural work must be paid overtime for all work--including agricultural work--done after working 40 hours in that workweek. For example, suppose in a workweek an employee spent 30 minutes in a packing shed where some of the product was grown by another grower and 59½ hours picking the product grown by his own employer. While the employee spent less than one percent of his time handling another grower's product, it causes him to be treated under the FLSA as a non-agricultural employee for the whole workweek; thus, he must be paid time-and-a-half for 20 hours of work!

In summary, the two key points are:

1. Make sure time records clearly reflect what work was performed at what time of the workday, and

2. Clearly distinguish between work performed as agricultural from non-agricultural during the workday.

Winery Employment: Employment in a winery--even one where grapes grown in only the winery's own vineyards are crushed--is not considered agriculture under the federal Fair Labor Standards Act (FLSA). Thus, an employee who during a workweek either works only in a winery or switches between vineyard work and winery work may work only 40 hours in that workweek at his regular pay rate. For work beyond that limit, the employee must be paid under the FLSA an overtime premium at a rate of 1½ times his regular pay rate. In contrast, an employee is exempt from FLSA overtime in any workweek in which he works only in agriculture.

Cold-Storage Activities: Employees working in a cold-storage facility may be covered by one of three Industrial Welfare Commission (IWC) Orders: No. 14 (Agricultural Occupations); No. 13 (Industries Preparing Agricultural Products for the Market, on the Farm) or No. 8 (Industries Handling Products after Harvest).

Generally, as long as only farmer's own commodities are merely being placed and stored in a cold-storage facility, Order No. 14 covers the employees handling them. Under Order No. 14, "[e]mployed in an agricultural occupation means...[t]he assembly and storage of any agricultural or horticultural commodity...."

In contrast, Order No. 13 covers employees handling commodities produced by their employer that are undergoing other processes or treatment.

Figuring Overtime Pay: Sometimes employees work eight or more consecutive days over two or more workweeks. The most common question about this situation is: "How do I calculate overtime pay for the 8th, 9th, etc., days of work?"

The first thing to consider is the employer's workweek. "Workweek" is defined in California's Industrial Welfare Commission (IWC) orders. The Division of Labor Standards Enforcement (DLSE), which enforces the provisions of the IWC orders, explains:

Workweek Defined: A workweek is any seven consecutive 24-hour period, starting with the same calendar day each week, beginning at any hour on any day, so long as it is fixed and regularly recurring. An employer may establish different workweeks for different employees, but once an employee's workweek is established, it remains fixed regardless of his working schedule. An employee's workweek may be changed only if the change is intended to be permanent and the change is not designed to evade overtime obligations.

The terms payroll period, work schedule and workweek are often confused with each other.

A payroll period is the regularly recurring time span for which an employer ordinarily compensates an employee for his labor. A payroll period can be daily, weekly, biweekly or semimonthly. Generally, employers in California must pay their employees at least semimonthly; farm labor contractors, however, must pay their employees at least weekly.

A work schedule is the hours and days an employee normally works. Just because an employee is normally scheduled to work Monday through Friday from 7:30 a.m. to 4 p.m., including a 30-minute off-duty meal period, has no bearing on how overtime is calculated, nor does it determine the employee's workweek.

Normally an employee's workweek is the seven-day period used for payroll purposes. If it is not otherwise established in the employer's records, the DLSE for enforcement purposes deems the workweek to run from 12:01 a.m. Sunday to midnight Saturday, with each workday ending at midnight.

Workday Defined: Hand-in-hand with the definition of workweek is that of workday. Workday means any consecutive 24 hours beginning at the same time each calendar day. The beginning of an employee's workday need not coincide with the beginning of that employee's shift, and an employer may establish different workdays for different shifts. However, once a workday is established it may be changed only if the change is intended to be permanent and the change is not designed to evade overtime obligations.

Daily and weekly overtime is due based on the hours worked each workday and each workweek. An employer may not average hours worked over two or more workweeks or workdays. Each workweek and workday, in other words, stands alone for the purpose of calculating overtime pay.

Thus, for example, a non-agricultural employee who worked 30 hours one workweek and 45 the next workweek is entitled to five hours at time-and-a-half for the second workweek.

Similarly, an agricultural employee who worked 12 hours on one workday and eight hours the next must be paid two hours at time-and-a-half for the 11th and 12th hours worked on the first workday.

In choosing a workweek, an employer should determine which day of the week is least likely to be worked and, if worked, would have the fewest hours worked. That day of the week should be established as the workweek's seventh (i.e., last) day, because work done on it would result in the least amount of overtime pay.

Consider, for example, agricultural employees who work 10 hours a day Monday through Saturday and then two hours on Sunday. If their workweek starts on Sunday and ends the next Saturday, all 10 hours worked that Saturday must be paid at a premium overtime rate: the first eight hours at time-and-a-half, and the final two hours at double time.

In contrast, if their workweek started on Monday and ended on Sunday, they are due only two hours of overtime at one and one-half times their regular pay rate, because they worked only two hours on the seventh consecutive day of work in that workweek.

To illustrate the discrete nature of each workweek, assume an agricultural employee works this schedule over two workweeks:

During Workweek #1, the employee worked six 10-hour days. Because he neither worked more than 10 hours on any workday nor on more than six workdays of the workweek, the employee didn't work any overtime hours. The same applies to Workweek #2. So, even though he worked 12 consecutive days, the employee didn't earn any overtime during the two-week period, because each workweek is independent of the other.

In conclusion, when calculating overtime, each workweek stands alone.

Overtime Exemptions - State

The state wage-and-hour laws contain complete and partial overtime pay exemptions for certain employees. Employees falling within any of these classifications are completely exempt from the overtime pay requirements established by the IWC orders:

1. Executive, Administrative or Professional Employees: State and federal laws exempt specified executive, administrative and professional from their wage-and-hour requirements. Whether an exemption applies depends on the employee's duties and salary. Because the federal and state exemptions for these so-called "white-collar" employees differ, each must be examined separately when considering whether an exemption applies.

IWC Order No. 14 exempts an employee engaged in work that is primarily intellectual, managerial, or creative and requires exercise of discretion and independent judgment, for which the remuneration is at least twice the monthly state minimum wage for full-time employment (based on 40 hours per workweek).

The other IWC orders exempt persons employed in administrative, executive, or professional capacities. In addition to meeting the "duties test" noted below, an exempt employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment (40 hours per week). The minimum monthly salary requirement is $2,773.34 (the equivalent of $33,280 per year).

The following requirements apply in determining whether an employee's duties meet the test to qualify for an exemption from those sections:

(A) Executive Exemption. A person employed in an executive capacity means any employee: (a) whose duties and responsibilities involve the management of the enterprise in which he or she is employed or of a customarily recognized department or subdivision; and (b) who customarily and regularly directs the work of two or more other employees; and (c) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and (d) who customarily and regularly exercises discretion and independent judgment; and (e) who is primarily engaged in duties that meet the test of the exemption. The employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment (40 hours per workweek.)

(B) Administrative Exemption. A person employed in an administrative capacity means any employee: (a) whose duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of his employer or his employer's customers; and (b) who customarily and regularly exercises discretion and independent judgment; and (c)(1) who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity, or (2) who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or (3) who executes under only general supervision special assignments and tasks, and (d) who is primarily engaged in duties that meet the test of the exemption. The employee must also earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment (40 hours per week.)

(C) Professional Exemption. A person employed in a professional capacity means an employee who (a) is licensed or certified by the State of California and is primarily engaged in the practice of one of the following recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; or (b) is primarily engaged in an occupation commonly recognized as a learned or artistic profession.

2. Outside Salespersons: Both federal and state laws exempt outside salespersons from their requirements for overtime premium pay. Under the FLSA, an outside salesperson is an employee who (1) sells or takes orders for products or services while customarily and regularly away from the employer's place of business and (2) does not perform non-sales type work for more than 20% of the hours worked in the workweek by nonexempt employees. Under the IWC orders, an outside salesperson is an employee who (1) is 18 years of age or over, (2) customarily and regularly spends more than 50% of the working time away from the employee's place of business and (3) sells tangible or intangible items or obtains orders or contracts for products, services or use of facilities.

3. Commissioned Inside Salespersons: Federal and state laws provide narrow overtime exemptions for inside commissioned salespersons. The FLSA's exemption applies only to retail establishments. To qualify, the retail employee must earn more than 1½ times the minimum wage and receive more than half of his or her total compensation in the form of a commission from the sale of goods or services. IWC Order Nos. 4 (Professional, Technical, Clerical, Mechanical, and Similar Occupations) and 7 (Mercantile Industries) provide a similar exemption from overtime. Overtime premium pay does not apply to any employee whose earnings exceed 1½ times the minimum wage if more than half of that employee's compensation is from commissions. Employers must record the hours of work of commissioned inside salespersons to prove they qualify for the exemption.

4. Truck drivers: Both the FLSA and IWC orders exempt from their overtime premium pay requirements employees covered by federal or state laws regulating motor carriers. See "Truck Driver Overtime" below.

5. Parents, spouse or children: Employees who are the parents, spouse or children of the employer are exempt from overtime-premium-pay requirements.

6. Irrigators: Since they are employed in agriculture, irrigators are exempt from the FLSA's overtime-premium-pay requirements. Further, they are exempt from the overtime-premium-pay requirements of IWC Order No. 14 during any workweek in which they perform an irrigator's duties for more than half of their hours in that workweek. Those duties include the job functions defined in the U.S. Department of Labor's Dictionary of Occupational Titles (DOT) (i.e., Head Irrigator, Valve-Pipe Irrigator, Sprinkling-System Irrigator and Gravity Flow Irrigator). But as the DOT listing of irrigator types is not exhaustive, the state Labor Commissioner has acknowledged that other types of irrigators, such as drip-system irrigators, may fall within the exemption.

7. Part-Time Employees: IWC Order No. 14 exempts certain part-time employees from the requirement that they receive overtime premium pay on the seventh day of work in a workweek. To qualify, the employee must not have worked more than 30 hours in the workweek or more than six hours in any workday. (The FLSA regulates only the number of hours that may be worked in a workweek and not daily hours or number of days worked. Thus, covered employees are entitled to overtime pay under the FLSA only if they work more than 40 hours in a workweek.)

8. Make-Up Time: Section 513 the California Labor Code provides a way for non-agricultural employees (i.e., those not covered by IWC Order No. 14) to take time off to attend to their personal needs and work other hours within the same workweek to make up that time, without the payment of overtime compensation except for hours worked in excess of 11 in one workday or 40 in one workweek. The employee benefits by neither losing pay nor having to use paid-time-off benefits such as sick or vacation time for the time off. The employer benefits by not having to pay daily overtime to an employee who works more than eight hours (but not more than 11 hours) in a day to make up the missed time.

Section 513 allows an employer to approve an employee's signed request to make up work time that has been or that will be lost due to the employee's personal needs. The employer may choose to grant or deny a request for time off or to work make-up time.

An employee must submit a separate written request each time the employee wants make-up time. The request need not be made before the employee takes work time off, but it must be made before the make-up work is performed so as to ensure the employer is not liable for daily overtime for the make-up hours worked. Daily overtime hours worked before a request to perform make-up work cannot be credited as make-up time; rather, it constitutes time worked for which overtime compensation must be paid.

Most importantly, time taken off in one workweek may be made up only during that same workweek. If the employee performs the make-up work in a different workweek than when he took work time off, the daily overtime hours worked must be paid at the applicable premium rate.

The statute prohibits an employer from "encouraging or otherwise soliciting an employee to request [the] employer's approval to take personal time off and make up the work hours. . . ." This does not prohibit employers from merely informing workers of the statute's provisions; however, it clearly does prohibit them from suggesting, recommending (or, of course, ordering) employees to "request" make-up time.

Nothing in the statute prohibits an employee from making up time worked before the time being made up is lost, as long as the make-up work is performed during the same workweek in which the time is lost. Thus, an employee who knows he will need to take time off late in the workweek may, earlier in that workweek, make up that time off in advance.

In this situation, however, if the employee were to fail to take the time off after working the make-up time, the employer would have to pay the employee overtime for hours worked over 40 hours in that workweek. In contrast, the employer would not be liable for daily overtime because the employer had agreed to allow the employee to work the extra daily hours without payment of daily overtime so as to make up for the time the employee asserted would be lost later in the workweek due to the employee's personal obligations, and the employer relied on the employee's assertion in granting that request.

Truck drivers

Federal Provisions: Specified employees (generally, drivers and their helpers, loaders and mechanics) covered by the federal Motor Carrier Act of 1935 are exempt from overtime under the FLSA. Exempt truck drivers under the FLSA are those who haul property or passengers in interstate commerce. The federal Motor Carrier Act applies whenever the load or delivery is on its way out of the driver's state of domicile, while the driver is out-of-state, and during the return trip within the domicile state.

Further, where a driver or driver's helper has not made an actual interstate trip, or a loader or mechanic has not been working on an interstate shipment or vehicle that has been used in such a shipment, they may still be subject to the jurisdiction of the U.S. Department of Transportation (DOT) if:

1. The carrier is shown to have an involvement in interstate commerce and

2. It is established that the driver or driver's helper could have, in the regular course of his employment, been reasonably expected to make one of the carrier's interstate runs or, in the case of a loader or mechanic, could have been reasonably expected to perform as such in the carrier's interstate activity.

Satisfactory evidence of this can take the form of statements from the carrier's employees, or documentation such as employment agreements. Where such evidence is developed with regard to an employee, the DOT asserts jurisdiction over that employee for a 4-month period starting with the date he could have been called upon to, or actually did, engage in the carrier's interstate activity. Thus, such employee would be exempt from the FLSA's overtime provisions for the same 4-month period.

A truck driver covered under the federal Motor Carrier Act may drive for up to 11 hours after having been off duty for at least 10 hours. Before driving again, the truck driver must remain off duty for at least another 10 hours. After having been on-duty for 14 hours--no matter the activity--the driver must have 10 hours off-duty. The 14-hour duty period may not be extended with off-duty time for meal, fuel or other types of stops. Only the use of a sleeper berth can extend the 14-hour on-duty period. Further, during any seven consecutive days, a driver may not drive after having been on-duty for more than 60 hours; during any eight consecutive days, a driver may not drive after having been on-duty for 70 hours, but the driver may perform non-driving activities. Drivers can "restart" the seven- and eight-day periods by taking at least 34 consecutive hours off-duty.

Agricultural operations are exempted from driving-time requirements for transportation occurring within a 100 air-mile radius of a farm or distribution point during planting or harvesting season within or as determined by each state.

State Provisions: Drivers covered by the state Motor Carrier Safety Act are exempt from the overtime premium pay provisions of the IWC orders. However, they are limited to a maximum number of hours on duty. The state allows the exemption for only the truck driver and not for any non-driver who rides along for any other purpose such as to assist in loading or unloading.

Covered by the state Motor Carrier Safety Act are drivers of: motortrucks of three or more axles that weigh more than 6,000 pounds unladen; truck tractors; buses; and trailers and semitrailers designed or used to transport more than 10 persons.

Truck drivers covered by the state Motor Carrier Safety Act may not drive more than 12 hours within a work period or drive after having been on duty for 16 hours. A truck driver may accumulate off duty time in two periods totaling eight hours when resting in a sleeper berth, provided neither period is less than two hours. However, Title 13, California Code of Regulations, section 1212(k) relaxes the driving and on-duty time restrictions for drivers employed by agricultural carriers when transporting farm products from the field to the first point of processing or packing. An agricultural carrier is one who transports for compensation fresh fruits, nuts, vegetables, logs and unprocessed agricultural commodities. These drivers may not drive for any period after having been on duty 16 hours or more after 8 hours off duty nor may they drive after having been on duty for 112 hours in 8 consecutive days.

Weekend or Holiday Overtime: Unless required by a contractual obligation or policy adopted by the employer to do so, an employer is not legally required to pay overtime or a premium merely because employees work on holidays, Saturdays or Sundays. Those days are treated like any other day: An overtime premium is due only if the hours worked exceed the limits specified by the applicable IWC order. An employer choosing to give employees time off with pay for certain holidays need not count the unworked holiday time as "hours worked" for overtime purposes. Overtime is based on "hours worked," not "hours paid."

Piece Rates and Commissions: To calculate the regular rate where compensation is by the piece or by a commission, either of these two methods may be used:

1. Divide the total earnings for the week, including those during overtime hours, by the total hours worked during the week, including the overtime hours. Then, for each overtime hour worked, the employee is entitled to receive an additional ½ of the regular rate for those hours requiring time-and-a-half, and the full regular rate for those overtime hours requiring the payment of double time.

2. Use the piece or commission rate as the regular rate and pay for pieces produced or commissions earned during overtime hours at the applicable premium rate. For example, if the piece rate is 10 cents per unit produced during regular hours, then it would be 15 cents per unit produced during time-and-a-half work hours.

A group rate for piecework is an acceptable method of computing pay. In this method the total number of pieces produced by the group is divided by the number of persons in the group and each is paid accordingly. The regular rate for each worker is determined by dividing the pay received by the number of hours worked. However, each employee must receive a separate payroll check and an itemized statement of earnings. Employers may not pay the total earnings to one employee, such as the father of a family unit, and expect that person to pay the other members of the group. Each person must be treated as an individual employee in every way.

Again, the regular rate must be at least the minimum wage. Also, because the regular rate is simply the rate on which earned overtime premium is based, it must be determined only for employees who have worked overtime.

Non-Exempt Salaried Employees: Overtime pay is computed using an employee's regular rate of pay, which is usually an hourly rate. The regular rate of a non-exempt employee paid a salary is usually computed by dividing the employee's weekly compensation by the maximum number of hours (i.e., regular hours) the employee may work in a workweek at that regular rate. Where, however, the employer and employee have agreed the salary compensates the employee for fewer hours than that maximum, the weekly compensation is divided by the agreed-upon number of hours.

Here's how to determine the regular rate of a non-exempt employee paid a monthly salary that compensates the employee for the maximum number of regular hours the employee may work:

First, multiply the salary by 12 months per year; this gives the annual rate. Divide the annual rate by 52 weeks per year; this gives the weekly rate. Divide the weekly rate by the maximum number of regular hours the employee may work each workweek; this gives the regular hourly rate.

Take, for example, a non-exempt agricultural employee paid a monthly salary of $2,600. The employer and the employee agreed that the salary is intended to compensate the employee for a regular workweek of six 10-hour days (i.e., 60 hours). Then:

$ 2,600/month x 12 months/year = $31,200/year

$ 31,200/year ÷ 52 weeks/year = $600/week

$ 600/week ÷ 60 hours/week = $10/hour

The employee's regular rate is thus $10 per hour. So, on top of his salary, the employee must be paid $15 for each non-regular hour worked for which overtime pay is due at the rate of 1½ times the regular rate (i.e., time-and-a-half). And, $20 is due for each non-regular hour worked for which overtime pay is due at the rate of two times the regular rate (i.e., double time).

Overtime Exemption Checklist

A common problem for employers is identifying employees who are exempt from some or all overtime, minimum-wage and time-record requirements.

Below is a checklist to help employers in determining who is a fully or partially exempt employee. Portions of the checklist were compiled from the Division of Labor Standards Enforcement's Management Memorandum "Exempt Status Analysis - Managerial or Executive Employees." DLSE uses this analysis to determine whether an employee is exempt under orders of the Industrial Welfare Commission (IWC). Questions below designated "DLSE" are from that memorandum.

Duties:

1. Does the employee primarily (more than half of the employee's work time) perform:

Professional duties: A person who is licensed or certified by the State of California and engaged in the practice of one of these recognized professions: law, medicine, dentistry, optometry, architecture, engineering, teaching, or accounting; and, who customarily and regularly exercises discretion and independent judgment. Or, a person engaged in an occupation commonly recognized as a learned or artistic profession [see IWC orders, section 1(A)(3)].

If yes, go to Salary Test

If no, go to B.

B. Executive duties: An executive employee means an employee (a) whose duties and responsibilities involve the management of the enterprise in which he/she is employed or of a customarily recognized department or subdivision; and (b) who customarily and regularly directs the work of two or more other employees; and (c) who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees will be given particular weight; and (d) who customarily and regularly exercises discretion and independent judgment; and (e) who is primarily engaged in duties that meet the test of the exemption. (See regulations under the Fair Labor Standards Act at 29 CFR sections 541.102, 541.104-111, and 541.115-116).

DLSE: 1. Hire or make effective recommendations to hire employees. The employee must have sufficient authority so that his or her recommendations for hiring command particularly serious attention.

2. Fire or make effective recommendations to fire employees. The employee must have sufficient authority so that his or her recommendations concerning employee discipline (including terminations) command particularly serious attention.

3. Customarily and regularly exercises discretionary and independent judgment. This involves the comparisons and evaluation of alternatives by the employee and using his or her experience and judgment in selecting the best option. The terms imply that the employee has the power to make independent choices, free from immediate supervision. The decision may be implemented or may result in a recommendation subject to final authority, but the employee's recommendation must command serious attention. The decisions should pertain to matters of consequence to the business and/or its customers. The exercise of such discretion need not be constant, but should be done on a mor than occasional basis.

4. Customarily and regularly directs two or more people. Individuals who supervise employees only in absence of the manger or who do not customarily and regularly direct the work of others are not considered exempt management or executive employees. These employees may qualify under the administrative or professional exemption test.

5. Exempt Duties: Any time related to management, which may be logically separated from non-exempt work, must be counted as exempt work, no matter how short the time span may be. Examples of exempt duties, when performed as a part of or in conjunction with overall management level responsibilities, include:

• Interviewing, selecting, hiring and training employees.

• Setting and adjusting pay rates and work hours or recommending same.

• Directing work.

• Keeping production records of subordinates for use in supervision.

• Evaluating employees' efficiency and productivity.

• Handling employees' complaints.

• Disciplining employees including termination, or recommendation to terminate.

• Planning work.

• Determining techniques to be used at work.

• Distributing work to others.

• Deciding on types of merchandise, materials, supplies, machinery, or tools.

• Controlling flow and distribution of merchandise, materials and supplies.

• Providing for safety of employees and property.

• Controlling revenue or expense.

6. Non-Exempt duties: Some examples of non-exempt duties include:

• Performing the same kind of work as subordinates.

• Performing any production work, even though unlike that performed by subordinates, which is not part of a supervisory function.

• Making sales, replenishing stocks, returning stock to shelves, other than for supervisory training or demonstration purposes.

• Performing routine clerical duties, such as bookkeeping, cashiering, billing, filling and operating business machines, other than for supervisory training or demonstration purposes.

• Checking and inspection of goods as a production operation, rather than as a supervisory function.

• Performing routine maintenance work.

If yes, go to Salary Test

If no, go to C.

C. Administrative duties: A person employed in an administrative capacity means any employee: (a) whose duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers; and (b) who customarily and regularly exercises discretion and independent judgment; and (c) who regularly and directly assists a proprietor, or an employee employed in a bona fide executive or administrative capacity (see regulations under the Fair Labor Standards Act, 29 CFR sections 541.201-205, 541.207-208, 541.210, and 541.215 - located at: http://www.access.gpo.gov/nara/cfr/waisidx_03/29cfrv3_03.html); or (d) who performs under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (e) who executes under only general supervision special assignments and tasks.

If yes, go to Salary Test

If no, go to 2.

2. Is the employee a/an:

D. Outside salesperson: An exemption from the IWC orders is available to an employee classified as an outside salesperson. An outside salesperson means any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer's place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.

If no, go to E.

E. Commissioned salesperson: A narrow exemption from only overtime is available to employees who work under IWC Orders 4 (Professional, Technical, Clerical, Mechanical and Similar Occupations) and 7 (Mercantile). Under these orders, overtime doesn't apply to any employee whose earnings exceed1½ times the minimum wage if more than half of that employee's compensation represents commissions.

If no, go to F.

F. Computer Software Field employee: A narrow exemption from the IWC orders exists for an employee in the computer software field who is paid on an hourly basis. See IWC orders, section 1(A)(3)(h), for a description of a computer software field employee.

If no, go to G.

G. Parent, spouse, child or legally adopted child of the employer: The provisions of the IWC Orders don't apply to the parent, spouse, child, or legally adopted child of the employer.

If no, go to H.

H. Irrigator: Irrigators are exempt from the FLSA's overtime-premium requirement because they are employed in agriculture. Under IWC Order No. 14, an employee is exempt from its overtime-premium requirement during any workweek in which he performs an irrigator's duties for more than half of his hours in that workweek. Those duties include the job functions defined in the U.S. Department of Labor's Dictionary of Occupational Titles (DOT) (i.e., Head Irrigator, Valve-Pipe Irrigator, Sprinkling-System Irrigator and Gravity Flow Irrigator). But as the DOT listing of irrigator types is not exhaustive, the state Labor Commissioner has acknowledged that other types of irrigators, such as drip-system irrigators, may fall within the exemption.

If no, go to I.

I. Truck Driver: Both the FLSA and IWC orders exempt from their overtime-premium requirements employees covered by federal or state laws regulating motor carriers. Generally, drivers and their helpers, loaders and mechanics) covered by the federal Motor Carrier Act of 1935 are exempt from overtime under the FLSA. Drivers covered by the state Motor Carrier Safety Act are exempt from the overtime-premium provisions of the IWC orders. However, they are limited to a maximum number of hours on duty. The state allows the exemption for only the truck driver and not for any non-driver who rides along for any other purpose such as to assist in loading or unloading. Covered by the state Motor Carrier Safety Act are drivers of: motortrucks of three or more axles that weigh more than 6,000 pounds unladen; truck tractors; buses; and trailers and semitrailers designed or used to transport more than 10 persons.

If no, go to J.

J. Part-time Employee: IWC Order No. 14 exempts certain part-time employees from the requirement that they receive overtime premium pay on the seventh day of work in a workweek. To qualify, the employee must not have worked more than 30 hours in the workweek or more than six hours in any workday.

If no, it is not likely the employee is exempt for overtime.

Salary Test

The employee must receive a monthly salary of at least twice the state minimum wage for full-time employment. Full-time employment is defined in Labor Code section 515(c) as 40 hours per week. With the California minimum wage now at $8.00 per hour, the minimum monthly salary is $2773.33.

Recordkeeping and Payroll

Statement of Wages: When employees are paid, the employer must provide each employee with a written itemized statement that contains this information:

1. Gross wages earned;

2. Total hours worked (if the employee's compensation is based on an hourly wage);

3. Piece-rate units produced and the rate per unit produced;

7. Name of the employee and the last four digits of his or her social security number or an employee identification number other than a social security number; and

5. Net wages earned;

6. The inclusive dates of the pay period;

7. Name of the employee and his or her social security number; and

8. Name and address of the employer (legal entity).

Federal law also requires that the written statement include: (1) the basis on which wages are paid and (2) the employer's federal taxpayer identification number assigned by the Internal Revenue Service.

Like other employers, those paying wages in cash must give each employee this itemized statement of wages. These statements must be recorded in ink or other indelible form and maintained in English. The employer must keep a copy of them.

Recording Hours Worked: Employers must keep in indelible ink records of the time worked by their non-exempt employees. This can be done by writing the time worked on a card or sheet or by having employees punch a time clock. Time records must show when an employee starts and ends each work period, as well as meal periods, split shift intervals and the total daily hours worked.

Payroll and Related Records: The employer must maintain employee records in English in indelible ink or equivalent form. All documents must be properly dated. The employer must maintain comprehensive records showing employees' names, addresses, occupations, social security numbers and ages of all minors. At a central location in the state or at the establishment at which the employees work, the employer must keep payroll records showing the hours worked each day and the wages paid to each employee.

Job Applications; Personnel Files: Employers must keep files of all job applications, personnel and employment-referral records for at least two years after the files are created or received. Employers must keep the personnel files of terminated employees for two years after termination and the files of rejected applicants for two years after the rejection.

CIS Form I-9: Every employer must verify the eligibility of every new employee to work in the United States. This is done by using Citizenship and Immigration Service Form I-9. The completed form must be kept for three years after employment begins or one year after employment is terminated, whichever is later. Employers must present Forms I-9 for inspection upon request by an Immigration and Customs Enforcement or U.S. Department of Labor official. At least three days advance notice of such an inspection must be given.

Checklist of Forms and Reports: Here is a checklist of forms that must be completed for each new employee and the subjects of which they must be informed when they are hired.

1. Issue Disability Insurance Pamphlet DE-2515: given to employee

2. Issue Paid Family Leave Pamphlet DE-2511: given to employee

3. IRS Form W-4: completed by employee

Workday and Workweek: A workday is any consecutive 24-hour period starting at the same time each calendar day. The 24-hour period may start at any hour of any day. Daily overtime pay is based on hours worked in a workday.

An employer may change the workday or the workweek as long as the change is intended to be permanent. It is not necessary for all employees to have the same workday or workweek.

Hours taken off for vacation, holidays or sick time need not be counted as "hours worked" in determining any overtime obligation.

Inspection and Copying by Employees of Personnel Files: California Labor Code section 1198.5 provides that "every employer shall at reasonable times . . . upon the request of an employee, permit that employee to inspect such personnel files which are used or have been used to determine that employee's qualifications for employment, promotion, additional compensation, or termination or other disciplinary action. . . ." Employees do not have a right to inspect records of criminal investigations or letters of reference.

An employer must let current and former (including laid-off, on-leave and terminated) employees inspect personnel files. Persons not included are applicants for employment, union officials, or other designated third parties. However, all requests by union representatives or a person's attorney to inspect personnel files should be referred to the employer's legal counsel.

The state Labor Commissioner takes the position that a former employee may inspect his or her personnel file until the statute of limitations on each applicable claim has expired. Not knowing the reason for the inspection request, an employer can be required to allow access to the files to a maximum of 4 years. Such a claim might involve breach of a written contract or of the state's unfair competition law.

An employer must allow an eligible person access to files at "reasonable times." "Reasonable times" means during the "regular business hours of a business office where personnel records are usually and ordinarily maintained . . . when sufficient time is available during the course of a regular business day to inspect the personnel file in question." The state Labor Commissioner interprets the law to allow an employer to require an inspection to be on the employee's free time, on an appointment basis and limited to once every year. An employee can overcome the once-per-year limitation by contending that the records had been altered or that the information is pertinent to an ongoing investigation.

An employer is not required to provide an employee with copies of personnel records in the files. However, the employer should let the employee take notes of them during the inspection.

An exception to the "no-copy" policy is Labor Code section 432, which provides: "If an employee or applicant signs any instrument relating to obtaining or holding of employment, he shall be given a copy of the instrument upon request." However, a copy of a document such as an authorization for payroll deductions signed by an employee must be given to the employee even without a request for it by the employee.

Inspection and Copying by Employees of Payroll Records: Labor Code section 226, subdivision (a), requires an employer to afford current and former employees the right to inspect or copy payroll records pertaining to that current or former employee, upon reasonable request to the employer. The employer may take reasonable steps to assure the identity of the current or former employee. If the employer provides copies of the records, the actual cost of reproduction may be charged to the current or former employee.

An employer who receives a written or oral request to inspect or copy payroll records must comply with the request as soon as practicable, but no later than 21 calendar days from the date of the request.

Pay Days

Wages must be paid according to a regularly set schedule. When employees work overtime during a pay period, the payment of only the overtime wages may be delayed to the next payday. Straight-time wages generally must be paid within seven days of the end of the pay period in which they were earned.

Workers employed by farm labor contractors must be paid at least once a week on a business day designated in advance of payment. Payment must include all wages earned through the fourth day before the payday.

Employees boarded and lodged by an employer (except for those employed by a farm labor contractor, who must always pay at least weekly) must be paid at least once per month. Payment must include all wages up to the regular payday designated in advance.

All other agricultural employees must be paid twice each month on days designated in advance. Payment must include all wages earned through the seventh day before payday.

Executive, administrative and professional employees, as defined by law, may be paid monthly, as long as all of these conditions are met: (1) They are not covered by a collective-bargaining agreement containing language on paydays to be applied; (2) They are not covered by the FLSA; (3) Their monthly remuneration does not include overtime pay; and (4) They must be paid within seven days after the close of the monthly payroll period.

Payroll Deductions and Offsets Against Wages

An employer may lawfully withhold amounts from an employee's wages only when: (1) required or empowered to do so by law; (2) when the employee expressly authorizes in writing a deduction to cover insurance premiums, benefit-plan contributions or other deductions not amounting to a rebate of the employee's wage; or (3) when a deduction to cover health, welfare or pension contributions is expressly authorized by a wage or collective-bargaining agreement.

The ability of employers to deduct amounts from a non-exempt employee's wages due to cash shortage, breakage, or loss of equipment is specifically regulated by the IWC orders. Further, several court decisions significantly limit the employer's ability to offset various employee debts, such as overpayment of wages, against the employee's wages. Having written authorization to accelerate repayment of an employee debt does not necessarily make such a deduction legal. Balloon payments on separation from employment are not valid even if the employee agrees to such a repayment schedule in advance. It would be prudent to review with legal counsel any contemplated unauthorized or accelerated payroll deduction.

Here is a discussion of proper and improper deductions.

Lawful Deductions: California Labor Code section 224 allows an employer to deduct any portion of an employee's wages where the employer is required or empowered to do so by federal or state law. Further, deductions for insurance premiums, hospital or medical dues or other deductions not amounting to a rebate or deduction from the standard wage under a collective bargaining agreement (CBA) or required by a statute may also be deducted upon the written authorization of the employee. Deductions for health and welfare or pension payments provided by a CBA are also allowed even without the written authorization of the employee.

Employer May Not Collect or Receive Wages Paid Employee: Labor Code section 221 prohibits an employer from recovering wages paid. This provision prohibits an employer from receiving from an employee any wage paid by the employer to the employee either by deduction or recovery after payment of the wage.

The California courts have held that section 221 is "declarative of a strong public policy against fraud and deceit in the employment relationship. Even where fraud is not involved, however, the Legislature has recognized the employee's dependence on wages for the necessities of life and has, consequently, disapproved of unanticipated or unpredictable deductions because they impose a special hardship on employees."

Self-Help by Employers to Recover Unliquidated Sums: Courts have held that deductions from wages in effect allow an employer a self-help remedy that is illegal. The 1962 opinion in Kerr's Catering v. DIR made it clear that courts in California will scrutinize attempts by employers to recoup losses or damages by deducting from wages earned by arguably blameworthy employees. An employer who resorts to self-help by taking such deductions does so at its own risk.

Losses Resulting from Simple Negligence: Kerr held that shortages and other losses occurring without any fault on the part of an employee or merely due to simple negligence are inevitable in almost any business operation. Accordingly, an employer must bear those losses as an expense of doing business.

Discipline as an Alternative: In addition, of course, an employer may discipline an employee whose carelessness caused a loss. But the threat of discharge if the employee refuses to allow a deduction is not allowed. In addition, the courts have held that a discharge due to an employee's complaint about an illegal deduction constitutes a violation of public policy and gives rise to a cause of action for wrongful discharge.

Loss Suffered from an Employee's Dishonest or Willful Act or Gross Negligence: The IWC orders purport to give an employer the right to deduct for losses suffered due to an employee's dishonest or willful act or gross negligence. However, Labor Code section 224 proscribes any deduction that is neither authorized by the employee in writing nor permitted by law. Again, an employer who resorts to self-help does so at its own risk, as even under the proviso contained in the IWC orders, an objective test is applied to determine whether the loss was due to a dishonest or willful act or gross negligence. If it is determined that the employee was not guilty of a dishonest or willful act or gross negligence, the employee could recover not only the wages withheld but any waiting-time penalties due.

Deductions for Loans Made to Employees: In Barnhill v. Saunders, the court concluded that an employer may, with an employee's written consent, deduct from the employee's wages payments on loans made by the employer to the employee. However, the employer may not deduct a "balloon payment" to repay the loan when employment ends even if the employee had consented to such a deduction.

The conclusion reached in Barnhill allowing deductions from the wages of employees to repay loans made by the employer to the employee is questionable in view of the provisions of Labor Code section 300. That statute provides that no assignment of future wages may be made unless wages have already been earned except that future wages may be assigned for necessities of life (e.g., necessary food, necessary clothing, housing), and such assignment for necessities must be made directly to the person or persons supplying the necessities. Further, an assignment requires spousal consent unless at least an interlocutory judgment of dissolution has been entered.

Any Deduction Must be for Direct Benefit of Employee: Deductions from an employee's wages are permitted only for items that are for the employee's direct benefit. They may not be made for the benefit the employer, either directly or indirectly.

Specific Deductions: The Division of Labor Standard Enforcement (DLSE) has addressed the question of deductions made by or suggested by an employer for a number of different reasons, such as dealing with the cost of replacing a lost or stolen payroll check or deductions for unreturned safety equipment. The position taken by the DLSE in denying such recovery relies heavily on the court opinions in Barnhill, the 1988 case of CSEA v. State of California, and the 1969 case Sniadach v. Family Finance Corp.

Deductions Allowed By IWC Orders-Caveat: Section 9 of each IWC order in effect before 2000 provided that an employer may "deduct from the employee's last check the cost of an item furnished...in the event said item is not returned." As the courts have repeatedly stated, the Legislature enacted Labor Code sections 400-410 to provide a method whereby the parties to an employment contract may create a bond to ensure against loss by an employee of items such as uniforms, tools and equipment. Accordingly, the IWC's rationale in adopting the provisions of section 9 might not pass judicial scrutiny. The DLSE has continued to explain that the agency will enforce the IWC orders as written. However, employers are nonetheless cautioned about their right to deduct for unreturned uniforms or tools from an employee's final wages. The courts will have the final say on this issue, and they haven't yet spoken.

Deduction For Tardiness: California Labor Code section 2928 provides: "No deduction from the wages of an employee on account of his coming late to work shall be made in excess of the proportionate wage which would have been earned during the time actually lost, but for a loss of time less than 30 minutes, a half hour's wage may be deducted."

Under this statute, an employer may, for instance, deduct from the wages of an employee who was 35 minutes late wages for only 35 minutes. However, it may deduct from the wages of an employee who was only five minutes late wages for 30 minutes.

Final Pay

Discharged or Laid Off: A discharged or laid off employee must be paid immediately upon the discharge all wages then due, including any earned but unused vacation pay. Commission payments that cannot be calculated on the date of termination must be paid by the next regular commission payment due date. An employer must pay a discharged employee at the place and time of discharge.

An employer that lays off a group of employees by reason of the termination of seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables is deemed to have made immediate payment when the wages are paid within a reasonable time, not to exceed 72 hours. Payment must be made by mail to any employee who so requests and designates a mailing address.

Quitting Employee: An employee without a written agreement for a definite period of employment who quits without giving prior notice must be paid final wages due within 72 hours after the quit. The final wages of an employee who gives at least 72 hours' advance notice of his or her intention to quit must be paid upon the quit. An employee who quits must be paid at the employer's office or agency in the county where the employee worked. An employee who quits without 72 hours' notice may request that his or her final wage payment be mailed to a designated address. The date of mailing is considered the date of payment.

Waiting-Time Penalty: An employer who willfully fails to pay any wage due a discharged or quitting employee by the applicable deadline may be assessed a waiting-time penalty. The penalty is an amount equal to the employee's daily pay for each day the wages remain unpaid, up to a maximum of 30 days. By avoiding or refusing to receive payment of final wages due, an employee becomes ineligible for any waiting-time penalty for the period of that avoidance or refusal. Where a good-faith dispute exists about the amount of the wages due, no waiting-time penalty is imposed. Such a good-faith dispute occurs when an employer presents a defense based in law or fact, which, if successful, would preclude any recovery by the former employee. The fact that a defense is ultimately unsuccessful does not preclude a finding that a good-faith dispute existed. In contrast, one that is unsupported by any evidence, is unreasonable, or is presented in bad faith precludes a finding of a good-faith dispute, and the waiting-time penalty may be awarded to the employee.

Even where a dispute exists, the employer must pay, without requiring a release, whatever wages are due and not in dispute (i.e., conceded wages). By failing to pay conceded wages, an employer's good-faith-dispute defense against the imposition of the waiting-time penalty is defeated, no matter the outcome of the disputed wages.