Tag: Business

California’s New AI Hiring Regulations: What Employers Must Know Now

https://claude.ai/public/artifacts/e27d8c04-ffcf-4364-816a-433e34b86def

Effective October 1, 2025

California has taken a groundbreaking step in regulating artificial intelligence in the workplace. As of October 1, 2025, the state’s Civil Rights Council has implemented comprehensive regulations under the Fair Employment and Housing Act (FEHA) that fundamentally change how employers can use automated decision systems in hiring.

If your company uses AI tools, algorithms, or any automated software in recruitment, you need to understand these rules—because ignorance is no longer a defense.

The Bottom Line: No AI Shield from Liability

Here’s what every California employer needs to know: Using AI or automated tools does not protect you from discrimination liability. Period.

The Civil Rights Council has made it crystal clear that decisions made through automated systems are treated as the employer’s own actions. Whether a human or an algorithm screens resumes, ranks candidates, or flags applicants for rejection, your company bears full responsibility for any discriminatory outcomes.

This isn’t about whether AI is good or bad—it’s about accountability. Software used in hiring must now be treated like any other component of your hiring process: subject to bias scrutiny, oversight, and thorough documentation.

What Are Automated Decision Systems (ADS)?

Before we dive into compliance requirements, let’s clarify what falls under these regulations. Automated decision systems include any AI, algorithmic, or rule-based tool used in recruitment, such as:

  • Resume screening software that filters applications
  • Profile matching algorithms that rank candidate fit
  • Assessment tests with automated scoring
  • Video interview platforms with AI-based evaluation
  • Targeted job advertising with algorithmic delivery
  • Chatbots that pre-screen candidates
  • Predictive analytics tools that forecast candidate success

If it uses code, rules, or algorithms to help make hiring decisions, it’s likely covered.

Key Action #1: Inventory & Classify All ADS Tools

The first step toward compliance is knowing exactly what you’re using. This isn’t optional—it’s foundational.

Map Every Tool in Your Hiring Stack

Start by creating a comprehensive inventory of every automated tool that touches your recruitment process. Don’t overlook anything. That “simple” resume parser? It counts. The personality assessment test? Absolutely. The targeted LinkedIn job ads? Those too.

For each tool, you need to document:

  • Vendor name and contact information
  • Software version (and how often it’s updated)
  • Data sources the tool uses to make decisions
  • Update frequency for the tool’s underlying logic
  • Decision-making logic (if available from the vendor)
  • Integration points with your human decision-making steps

Demand Transparency from Vendors

This is where employer-vendor relationships get tested. You need to ask tough questions:

  • What anti-bias testing protocols have been implemented?
  • Can you provide audit results or validation data?
  • What disparate impact testing has been conducted?
  • Who carries the burden of proof if a FEHA claim arises—you or the vendor?

That last question is critical. In a disparate impact lawsuit, someone will need to prove the tool doesn’t discriminate. Make sure you know whether your vendor contract addresses this, or if you’re on your own.

If a vendor can’t or won’t answer these questions, that’s a massive red flag. You may need to reconsider the partnership entirely.

Classify Tools by Risk Level

Not all automated tools carry equal risk. California employers should classify their ADS tools into risk categories:

High Risk: Tools that REJECT candidates

  • Automated resume screeners that eliminate applicants
  • Assessment tests with automatic disqualification thresholds
  • AI interview platforms that can independently remove candidates from consideration

Medium Risk: Tools that RANK candidates

  • Algorithms that score and order applicant pools
  • Matching systems that create priority lists
  • Predictive analytics that rate likelihood of success

Lower Risk: Tools that SUGGEST or SURFACE information

  • Systems that recommend candidates for human review
  • Dashboards that highlight applications
  • Tools that organize information without making autonomous decisions

Your highest-risk tools should receive the most scrutiny, documentation, and human oversight.

What Happens If You Don’t Comply?

The consequences of non-compliance can be severe. FEHA allows for:

  • Individual lawsuits from affected candidates
  • Class action litigation
  • Civil Rights Department investigations
  • Compensatory and punitive damages
  • Attorney’s fees and costs
  • Injunctive relief requiring changes to hiring practices

More importantly, if you can’t document your ADS tools, demonstrate bias testing, or show appropriate oversight, you’ll be in an extremely weak position defending against discrimination claims.

Taking Action: Your Next Steps

If you’re using AI or automated tools in hiring, here’s what you should do immediately:

  1. Audit your hiring technology stack – Create that comprehensive inventory we discussed
  2. Engage with your vendors – Ask for anti-bias testing documentation and clarify liability
  3. Assess your risk exposure – Classify tools and identify which require enhanced oversight
  4. Document everything – Create records of your due diligence and decision-making processes
  5. Train your HR team – Ensure everyone understands the new liability framework
  6. Establish human oversight protocols – Define when and how humans review automated decisions
  7. Consult legal counsel – Consider having an employment attorney review your ADS usage and vendor contracts

The Bigger Picture

California’s regulations represent a significant shift in how we think about AI in hiring. Rather than seeing automation as a way to reduce bias or streamline processes without accountability, the law now recognizes that these tools are extensions of the employer’s decision-making authority—and liability.

Other states are watching California’s approach closely. What happens here often becomes a template for national standards. Employers who get ahead of these requirements now will be better positioned as similar regulations emerge elsewhere.

Final Thoughts

The use of AI in hiring isn’t going away, nor should it necessarily. Technology can help identify talent, reduce manual workload, and even mitigate certain types of bias when designed and monitored properly.

But these new regulations send a clear message: Employers cannot outsource accountability to algorithms. The decision to use automated tools must come with a commitment to transparency, testing, documentation, and human oversight.

If you’re using AI in hiring, treat it like what it legally is—your own decision-making process. Because under California law, that’s exactly what it is.

Need help navigating these regulations? Consider consulting with employment counsel who understands both FEHA requirements and automated decision systems. The investment in compliance now can save substantial legal exposure down the road.

This blog post provides general information and does not constitute legal advice. Employers should consult with qualified legal counsel regarding their specific circumstances.

Expanded paid sick leave under SB 1105 amends the Healthy Workplaces, Healthy Families Act, providing agricultural employees with enhanced access to time off for illness or preventive care

California Workers’ Rights Daily Digest – October 2, 2025

Today’s update spotlights emerging protections and upcoming events for low-wage workers in agriculture, warehousing, and construction. Drawing from state and advocacy sources, we highlight fresh legislative impacts, resources, and guidance to navigate workplace challenges.

Key Developments

  • Expanded paid sick leave under SB 1105 amends the Healthy Workplaces, Healthy Families Act, providing agricultural employees with enhanced access to time off for illness or preventive care—critical for seasonal farmworkers facing health risks.
  • New regulations address AI use in employment decisions, prohibiting biased algorithms in hiring or promotions, which could affect automated screening in warehousing and construction job applications.

Enforcement and Events

  • The Civil Rights Department is hosting an October 8 webinar on navigating criminal history in employment, offering strategies for workers with records to assert fair chance rights in low-wage hiring processes.
  • On October 22, join the United Against Hate webinar focusing on the Ralph Civil Rights Act, which protects against violence or intimidation at work—relevant for vulnerable sectors like agriculture.

Tips and Resources

  • For disaster-impacted workers (e.g., from recent LA fires), apply for extended unemployment assistance through labor.ca.gov; this supports recovery in fire-prone construction and ag areas.
  • Access free employment training programs via the Labor & Workforce Development Agency, as seen in recent grants for upskilling in manufacturing-adjacent roles like warehousing.
  • If facing AI-related hiring bias, consult calcivilrights.ca.gov for complaint guidance; advocacy groups like Legal Aid at Work offer helplines for low-wage workers.

Visit the linked sites for details and stay proactive. Fresh insights tomorrow!California Workers’ Rights Daily Digest – October 2, 2025

Today’s update spotlights emerging protections and upcoming events for low-wage workers in agriculture, warehousing, and construction. Drawing from state and advocacy sources, we highlight fresh legislative impacts, resources, and guidance to navigate workplace challenges.

Industries Most Affected by AI Job Losses

AI Job Loss in 2025: Impact, Industries, and YouTube Resources

Overview of AI Job Loss in 2025

The U.S. job market in 2025 has experienced a slowdown, with nonfarm payrolls adding only 22,000 jobs in August—far below the expected 75,000—and the unemployment rate rising to 4.3%, the highest in nearly four years [Web ID: 11, 13]. While economic uncertainty is the primary driver, artificial intelligence (AI) is contributing to job displacement, particularly in roles involving repetitive or data-driven tasks. AI-related layoffs accounted for over 10,000 job cuts in the first seven months of 2025, with the technology sector seeing 89,000 total cuts, of which 27,000 since 2023 are directly tied to AI adoption [Web ID: 1, 13]. Experts describe AI’s current impact as “small but not zero,” with projections estimating it could disrupt 6-7% of U.S. jobs (approximately 45 million roles) if adoption scales, though much of this will occur gradually through task automation rather than mass layoffs [Web ID: 0, 11, 19]. The World Economic Forum’s 2020 report predicted 85 million global jobs displaced by 2025, potentially offset by 97 million new roles, suggesting a net gain but significant disruption [Web ID: 10].

Young workers (20-30 years old) in AI-exposed occupations, like software development, have seen unemployment rise by nearly 3% since early 2025 [Web ID: 19]. However, AI is also creating opportunities in areas like oversight, AI development, and cybersecurity, with roles like AI trainers and ethicists emerging [Web ID: 8]. Upskilling remains critical, as workers with AI skills command wage premiums [Web ID: 9].

Industries Most Affected by AI Job Losses

The following industries are experiencing or are projected to feel AI-driven job losses first, primarily due to automation of routine, data-heavy tasks:

IndustryKey Impacts and Examples
Administrative and Clerical SupportRoutine tasks like data entry and scheduling are being automated, leading to slower employment growth and direct job cuts [Web ID: 10, 18]. Example: AI tools like AimeReception handle office tasks.
Legal ServicesAI for document review and contract analysis is moderating job growth, with only 1.6% expansion projected through the decade vs. 4% economy-wide [Web ID: 10, 19]. Example: AI scans legal databases faster than human researchers.
Finance and AccountingAutomation of data processing and fraud detection is displacing roles, especially in data-rich environments [Web ID: 10, 13]. Example: AI analytics tools outperform human market analysis.
Customer Service and Call CentersAI chatbots and voice systems reduce the need for human agents, contributing to below-trend employment growth [Web ID: 12]. Example: IBM’s AskHR handles 11.5 million interactions annually with minimal human oversight [Web ID: 18].
Marketing and Graphic DesignGenerative AI for content creation and ad targeting is slowing hiring in creative roles [Web ID: 12]. Example: Tools like DALL-E replace manual design work.
Software Development and ProgrammingCode generation tools are reducing demand for entry-level coders, with a 6% employment drop for 22- to 25-year-olds since 2022 [Web ID: 9, 13]. Example: GitHub Copilot automates coding tasks.
ManufacturingAssembly and quality control tasks are increasingly automated, making workers vulnerable [Web ID: 18]. Example: AI-driven machinery replaces manual labor.

Healthcare is adopting AI more slowly but may soon see impacts in administrative and diagnostic roles due to efficiency needs [Web ID: 3].

Finding YouTube Videos Demonstrating AI Job Loss

YouTube is a valuable platform for exploring AI’s impact on jobs through news reports, expert analyses, and personal stories. However, finding specific, credible videos requires targeted searches, as YouTube’s algorithm and recent AI controversies (e.g., unauthorized AI enhancements to Shorts) can complicate discoverability [Web ID: 2, 7, 14]. Below are strategies to locate relevant videos, types of content to expect, and tips for verifying credibility.

Search Strategy

Use these search terms on YouTube (accessible at m.youtube.com) to find 2025-specific videos:

  • “AI job loss 2025”
  • “Artificial intelligence replacing jobs 2025”
  • “AI automation impact on jobs 2025”
  • “Generative AI layoffs 2025”
  • “AI job displacement in tech 2025”
  • “Jobs replaced by AI 2025 industry analysis”

Filter results by selecting “This year” or “2025” under YouTube’s filter options. Adding “human voiced” (to avoid AI-generated content) or “expert analysis” can improve relevance.

Types of YouTube Videos

Here are the types of videos likely to demonstrate AI job losses, with examples of content and potential channels:

  1. Economic and Industry Analysis
    • Content: News channels or tech analysts discuss data-driven insights, citing reports like Goldman Sachs (2.5-7% of U.S. jobs at risk) or Challenger, Gray & Christmas (10,000+ AI-related cuts in 2025) [Web ID: 1, 19]. Videos may include charts showing job losses in tech or administrative roles.
    • Channels: Bloomberg Technology (www.youtube.com/@BloombergTechnology), CNBC (www.youtube.com/@CNBC).
    • Example Titles: “How AI Is Disrupting Jobs in 2025” or “AI Layoffs: Tech Industry in 2025.”
    • Search Tip: Use “AI job loss statistics 2025 Bloomberg” or “CNBC AI layoffs 2025.”
  2. Tech Industry Case Studies
    • Content: Tech influencers highlight cases like AI replacing coders or designers, referencing Stanford’s finding of a 6% employment drop for young programmers [Web ID: 13]. Videos may show AI tools like GitHub Copilot in action.
    • Channels: TechLead (www.youtube.com/@TechLead), The AI Advantage (www.youtube.com/@aiadvantage).
    • Example Titles: “Why Coders Are Losing Jobs to AI in 2025” or “AI Automation in Tech Jobs.”
    • Search Tip: Use “AI replacing coders 2025” or “AI automation in tech jobs YouTube.”
  3. Creator and Worker Testimonials
    • Content: Creators share personal stories of AI impacting their jobs, such as graphic designers replaced by tools like DALL-E [Web ID: 9]. Videos may include screen recordings of AI-generated content vs. human work.
    • Channels: Individual creators like Rhett Shull (www.youtube.com/@RhettShull), who discussed YouTube’s AI enhancements [Web ID: 2].
    • Example Titles: “How AI Took My Job in 2025” or “AI vs. Graphic Designers 2025.”
    • Search Tip: Use “AI replaced my job 2025” or “graphic designer AI job loss YouTube.”
  4. Educational and Career Advice
    • Content: Career-focused channels discuss at-risk jobs (e.g., data entry, customer service) and upskilling strategies, showing AI tools like AimeReception automating tasks [Web ID: 18].
    • Channels: CareerVidz (www.youtube.com/@CareerVidz), Indeed (www.youtube.com/@Indeed).
    • Example Titles: “Jobs AI Will Replace in 2025 and How to Upskill” or “Surviving AI Layoffs in 2025.”
    • Search Tip: Use “AI job replacement 2025 career advice” or “how to survive AI layoffs 2025.”
  5. Debates and Thought Leader Discussions
    • Content: Videos from events like VivaTech 2025 or interviews with experts (e.g., Nvidia’s Jensen Huang vs. Anthropic’s Dario Amodei) debate AI’s job impact, contrasting predictions of 50% entry-level job losses with optimistic views on productivity [Web ID: 10].
    • Channels: Wired (www.youtube.com/@WIRED), Vox (www.youtube.com/@Vox).
    • Example Titles: “Will AI Destroy Jobs by 2030?” or “AI Job Loss Debate 2025.”
    • Search Tip: Use “AI job loss debate 2025” or “VivaTech 2025 AI employment.”

Verifying Video Credibility

  • Check Reputation: Prioritize established channels (e.g., Bloomberg, CNBC) or verified creators with industry expertise.
  • Look for Data: Ensure videos cite credible sources like Goldman Sachs, PwC, or the World Economic Forum [Web ID: 10, 19].
  • Avoid Sensationalism: Be cautious of exaggerated claims (e.g., “AI will replace 99% of jobs by 2030”) unless backed by evidence [Web ID: 16].
  • Cross-Reference: Check comments or related Reddit threads (e.g., http://www.reddit.com/r/jobs) for video recommendations [Web ID: 17].

Challenges in Finding Videos

  • YouTube’s AI Controversy: YouTube’s use of AI to enhance Shorts without creator consent may affect content discoverability [Web ID: 2, 7, 14]. Creators like Rick Beato have noted unauthorized changes, which could impact trust in platform content [Web ID: 21].
  • Content Volume: AI job loss is a niche topic amidst millions of videos, requiring precise keywords.
  • Misinformation: Some videos may overstate AI’s impact without evidence, so focus on data-driven content.

Recommendations

  1. Start Searching: Visit m.youtube.com and use the suggested search terms with 2025 filters.
  2. Explore Channels: Check Bloomberg Technology, CNBC, TechLead, The AI Advantage, or CareerVidz for relevant videos.
  3. Verify Sources: Cross-check video claims with reports from Goldman Sachs (www.goldmansachs.com) or PwC.
  4. Engage with Communities: Browse http://www.reddit.com/r/ArtificialInteligence or http://www.reddit.com/r/jobs for video recommendations or discussions [Web ID: 12, 17].

Conclusion

AI is reshaping the 2025 job market, with measurable impacts in tech, administrative, legal, finance, customer service, marketing, and manufacturing sectors. While the overall effect remains limited, specific roles face growing risks, balanced by emerging opportunities in AI-related fields. YouTube offers a wealth of resources to explore these trends, from data-driven analyses to personal stories. By using targeted searches and verifying content, you can find videos that vividly demonstrate AI’s impact on jobs.The US job market has indeed softened in 2025, with nonfarm payroll growth slowing significantly—adding just 22,000 jobs in August, well below expectations—and the unemployment rate rising to 4.3%, its highest level in nearly four years. However, this downturn appears driven primarily by broader economic uncertainty rather than AI alone, though AI adoption has contributed to some job displacements. For instance, occupations with higher AI exposure have seen larger unemployment increases between 2022 and 2025, and AI-related layoffs accounted for over 10,000 job cuts in the first seven months of the year. Overall, experts describe AI’s current workforce impact as “small” but not zero, with projections estimating it could eventually displace 6-7% of US jobs or disrupt up to 45 million roles, though much of this is expected to unfold gradually through productivity gains and task automation rather than mass layoffs.The US job market has indeed softened in 2025, with nonfarm payroll growth slowing significantly—adding just 22,000 jobs in August, well below expectations—and the unemployment rate rising to 4.3%, its highest level in nearly four years. However, this downturn appears driven primarily by broader economic uncertainty rather than AI alone, though AI adoption has contributed to some job displacements. For instance, occupations with higher AI exposure have seen larger unemployment increases between 2022 and 2025, and AI-related layoffs accounted for over 10,000 job cuts in the first seven months of the year. Overall, experts describe AI’s current workforce impact as “small” but not zero, with projections estimating it could eventually displace 6-7% of US jobs or disrupt up to 45 million roles, though much of this is expected to unfold gradually through productivity gains and task automation rather than mass layoffs.

Shocking Stories of Wage Theft in California: Protect Your Rights by Joining WRCA

Posted on September 13, 2025, by Workers Rights Compliance Alliance (WRCA)

In the bustling economy of California, where industries like hospitality, construction, and fast food thrive, wage theft remains a persistent and devastating issue. Thousands of workers—often from vulnerable communities—face unpaid wages, denied breaks, and misclassification that strips them of rightful earnings and protections. At the Workers Rights Compliance Alliance (WRCA), we’re dedicated to shining a light on these injustices and empowering workers and employers alike to ensure compliance with labor laws. By joining our organization today at workersrightscompliancealliance.com, you’ll stay informed on the latest developments, receive expert guidance, and become part of a community fighting for fair workplaces. Don’t miss out—join WRCA now to get updates on workers’ rights and compliance strategies straight to your inbox!

In this blog post, we’ll dive into real stories from 2025 that highlight the human cost of wage violations. These cases, drawn from official enforcement actions by the California Labor Commissioner’s Office (LCO), underscore why staying vigilant is crucial. As a member of WRCA, you’ll have access to resources like webinars, compliance checklists, and alerts on emerging trends, helping you navigate these challenges effectively.

1. The Koreatown Restaurant Saga: Overworked and Underpaid at J BBQ

Imagine clocking in for a grueling shift at a popular Koreatown eatery, only to be denied basic breaks and forced into split shifts without extra pay. This was the reality for 48 workers at J BBQ, operated by Midri, Inc. and owner Byung Kwan Lee. On September 4, 2025, the LCO issued citations totaling over $680,000 for wage theft, including unpaid wages, denied meal and rest breaks, and inaccurate wage statements. Workers were often kept on-site during “lunch” to handle customers, violating California labor laws designed to protect their well-being.

The breakdown? $538,638 goes directly back to the workers, a hard-won victory referred by the Koreatown Immigrant Workers Alliance. Labor Commissioner Lilia García-Brower emphasized the risks restaurant workers face, stating, “These citations reflect our continued efforts to hold employers accountable.” Stories like this reveal how wage theft erodes trust and livelihoods, leading to financial strain and health issues for employees.

At WRCA, we believe knowledge is power. By joining our organization, you’ll receive timely updates on similar cases, plus tools to audit your own workplace or business for compliance. Sign up now at workersrightscompliancealliance.com and be the first to know about new enforcement actions—empowering you to advocate for change.

2. A Multimillion-Dollar Verdict: Justice for Two Brave Workers in San Francisco

On September 5, 2025, a San Francisco jury delivered a resounding $8.5 million verdict in favor of plaintiffs Marianne Ramirez and Wendy (last name withheld) in a wage-and-hour lawsuit. The case, presided over by Judge Andrew Y. S. Cheng, stemmed from violations dating back to May 2024, including unpaid overtime, denied meal and rest breaks, inaccurate wage statements, waiting time penalties, and potential employee misclassification.

The jury’s decision highlighted skepticism toward the employer’s defenses and a desire to deter future wrongdoing. While specific employer details remain private, this verdict sends a clear message: workers can fight back and win. For the plaintiffs, it meant reclaiming lost earnings amid rising living costs, but for many others, such battles are daunting without support.

That’s where WRCA comes in. As a member, you’ll gain access to legal resources, case studies, and networking opportunities to stay ahead of wage disputes. Join our growing alliance today at workersrightscompliancealliance.com and ensure you’re always updated on landmark rulings that could impact your rights or business.

3. Construction Site Schemes: $2.3 Million in Citations for L.A. Developers

In August 2025, the LCO targeted a web of Los Angeles developers and entities with over $2.3 million in citations for wage theft at four construction sites, affecting 124 workers from May 2021 to August 2023. Violations included skipping overtime pay despite exhausting hours, paying below the local minimum wage, denying sick leave (even during the pandemic), and issuing misleading wage statements. The scheme used multiple entities to dodge rules, with workers reporting to the same bosses across sites.

Affected employees—framing, tiling, painting, and plumbing—were owed $2.1 million in unpaid wages and damages, plus $165,000 in interest, averaging $18,900 per person. Key parties: Todd Wexman, Bridget Wexman, Jeffrey Farrington, and companies like San Fernando Studios LP/LLC. García-Brower called out these “corporate shell games.” This case exposes how construction’s high-risk environment compounds with wage issues, leaving workers vulnerable to exploitation.

WRCA is your ally in combating such practices. By joining us at workersrightscompliancealliance.com, you’ll get exclusive insights into industry-specific compliance, training sessions, and alerts on BOFE investigations—keeping you informed and protected.

4. Hospitality’s Hidden Exploitation: Ritz-Carlton and Subcontractors Fined $2 Million

July 2025 brought scrutiny to the Ritz-Carlton Half Moon Bay, where the LCO cited the hotel and three out-of-state janitorial subcontractors for misclassifying 155 janitors as independent contractors from July 2021 to January 2024. This denied them minimum wage, overtime, sick leave, and workers’ compensation—core protections under California law.

Citations totaled $1.9 million payable to workers, with joint liability if subcontractors default. Referred by the San Mateo County DA after a worker’s tip to nonprofit Coastside Hope, it highlights subcontracting pitfalls. Janitors, often working invisibly, faced grueling conditions without fair pay, amplifying inequality in luxury hospitality.

Stay ahead with WRCA’s expert resources. Join our organization now at workersrightscompliancealliance.com for updates on misclassification risks and how to ensure compliance in your sector.

5. Fast Food’s Rising Crisis: A Study on Systemic Wage Theft

A February 2025 study from Northwestern and Rutgers Universities revealed that 25% of Greater L.A. fast food workers were paid below minimum wage in 2024—up dramatically from 3% in 2009. This costs workers $44 million yearly, with average losses of $3,479 per person. Tied to wage hikes (up to $20/hour in 2025 for fast food), violations include underpayment, denied breaks, and retaliation fears among immigrant and youth workers.

The report warns of skipped meals and evictions for victims, calling for stronger enforcement amid low unionization. As 2025 unfolds, similar patterns persist, affecting service industries statewide.

At WRCA, we’re committed to education and advocacy. By joining us at workersrightscompliancealliance.com, you’ll receive reports like this, plus actionable advice to prevent or address wage theft—ensuring a fairer future for all.

Why Join WRCA Today?

These stories aren’t isolated—they’re part of a statewide epidemic where nearly 19,000 claims alleged $338 million in stolen wages last year. With delays in enforcement and proposed reforms in June 2025 aiming to boost accountability, staying informed is key. WRCA offers newsletters, workshops, and a network of experts to keep you updated on workers’ rights compliance.

Don’t wait for the next violation to hit close to home. Join the Workers Rights Compliance Alliance today at workersrightscompliancealliance.com and be part of the solution. Together, we can build compliant, equitable workplaces.

Follow us on social media for more stories and tips. #WorkersRights #WageTheft #JoinWRCA

Viral Burger King Worker Fired After Running Store Alone: A Wake-Up Call for Workers’ Rights

Introduction

When a video of a single mother running an entire Burger King shift by herself went viral, the internet rallied in support. Here was a woman, balancing motherhood with back-breaking work, keeping an entire restaurant afloat alone. Yet instead of recognition, she was fired. Her story exposes the painful truth faced by millions of American workers: dedication doesn’t guarantee dignity.

The Problem

The fast-food industry has long relied on underpaid and overworked employees. Hamilton’s story is not unique—many workers are asked to carry unreasonable workloads with little support. When they push back or fall short due to family responsibilities, employers often punish rather than protect them. For working parents, especially single mothers, this creates an impossible cycle: work long hours to provide for your kids, but lose your job if childcare interferes.

Legal Context

Federal labor law requires safe and reasonable working conditions, and some states—including California—have stronger protections for parents. Yet loopholes abound. Employers often cite “attendance” or “policy violations” to cover up retaliation, leaving workers vulnerable. In Hamilton’s case, the company policy prohibited employees from working alone—yet enforcement only came after she went viral. This contradiction exposes how policies are selectively applied, usually to the worker’s detriment.

In California, recent cases involving retaliation against caregivers show courts beginning to side with employees. But nationally, protections remain patchy. Without strong advocacy and enforcement, more parents will face the same cruel choice: job or family.

Worker Impact

Hamilton’s words resonate with so many: “My kids come first… y’all don’t pay for no babysitter.” Millions of parents are forced into the same trade-off. Low wages don’t cover childcare, yet missing work risks termination. The result? Burnout, poverty, and broken families—all while billion-dollar corporations profit.

Her viral video made her a symbol of resilience, but the firing revealed the fragility of worker protections in industries built on exploitation.

Call to Action

Stories like Hamilton’s are why the Workers Rights Compliance Alliance (WRCA) exists. Workers should never be punished for protecting their families. By joining WRCA, you can help hold corporations accountable, demand fair scheduling, and push for laws that prioritize human dignity.

No parent should have to choose between their job and their children. Stand with us—because workers deserve better.

Unfair Competition Demands a United Front

Don’t Just Get Mad, Get Even: Why Unfair Competition Demands a United Front

You follow the rules. You pay your premiums, file your paperwork, and play fair. You invest in your team, carry the proper licenses, and ensure your business is covered with workers’ compensation insurance. So why does it feel like you’re being punished for it? Every time you submit a bid, you know you’re not just competing on skill and efficiency; you’re up against ghost competitors who operate in the shadows, and it’s costing you jobs. You’re not imagining it, and you’re not alone in your frustration.

The Unlevel Playing Field

When a competitor submits a bid that seems impossibly low, it’s not because they have a secret business method. It’s because they’re cheating. They build their business model on breaking the law, and every legitimate contractor pays the price.

Let’s break down the “advantage” an illegal operator has. While you are paying for the essential costs of doing business legally, they are simply pocketing the difference. These costs include:

  • Workers’ Compensation Insurance: Depending on the trade, this can add a significant percentage to your payroll costs. It’s a non-negotiable expense that protects your workers and your business, yet your illegal competitor treats it as optional.
  • Payroll Taxes: You pay your share of Social Security, Medicare, and state and federal unemployment taxes for every employee. By paying “cash under the table,” an illegal operator avoids this entirely, instantly giving them a massive price advantage.
  • Licensing and Bonds: You’ve invested the time and money to get licensed by the CSLB and carry the necessary bonds, proving your professionalism and providing a layer of consumer protection. They operate with none of these safeguards.
  • Liability Insurance: You carry liability insurance to protect your clients and your assets. It’s a fundamental part of responsible business ownership that they simply ignore.

When you add it all up, an illegal competitor can have 20% to 40% lower overhead before the job even starts. They aren’t more efficient; they’re just operating illegally. This isn’t fair competition. It’s theft—theft from their workers, from the government, and directly from your bottom line.

A Powerful, Overlooked Tool

For too long, honest contractors have felt helpless, believing that reporting these operators to overwhelmed state agencies is their only recourse. But there is a powerful and direct tool designed for this exact situation: California’s Unfair Competition Law (UCL).

Found in the Business and Professions Code § 17200, the UCL is a broad statute that prohibits any “unlawful, unfair or fraudulent business act or practice.” The key word here is unlawful. When a competitor operates without a required license or fails to carry legally mandated workers’ compensation insurance, they are, by definition, committing an unlawful business act.

The UCL allows businesses that have been harmed and have lost money as a result of this illegal competition to take direct legal action. It’s not just about consumer rights; it’s about business rights. It gives you the standing to sue a competitor whose illegal shortcuts are directly taking business away from you. Think of it as a rule that says you can’t win a race by taking a shortcut that’s off-limits to every other runner. The UCL is the referee that can penalize them for it.

The Power of Alliance

So, if this powerful tool exists, why isn’t every honest contractor using it? The answer is simple: fighting alone is daunting, expensive, and time-consuming. Hiring attorneys and building a legal case against a single competitor can cost tens of thousands of dollars with no guarantee of success. For a small business, it’s a risk that’s often too great to take on.

This is precisely why the Workers’ Rights Compliance Alliance was formed.

We are a non-profit association founded on a simple principle: there is strength in numbers. Instead of one small business trying to fight a systemic problem alone, the Alliance pools resources from its members to create a dedicated legal fund. We work with legal experts to identify clear-cut cases of unfair competition and take targeted legal action on behalf of all our members.

By joining forces, we transform an impossible individual fight into a manageable and powerful collective action. Your modest membership fee combines with others to create a war chest that illegal operators cannot ignore. We handle the legal legwork, reducing your individual risk and allowing you to focus on what you do best—running your business.

Stop Feeling Helpless. Start Fighting Back.

The frustration you feel every time you lose a bid to an illegal operator is justified. But frustration alone won’t change anything. The cycle of unfair competition will continue as long as honest contractors feel isolated and powerless. It’s time to change the dynamic.

You don’t have to accept this as the cost of doing business anymore. You have the law on your side, and now, you have an alliance ready to fight with you. It’s time to level the playing field.

Visit https://workersrightscompliancealliance.com/ to learn how to join the fight. Don’t just get mad. Get even.

fraud by design workers cheated rinse & repeat:The Science of Cheating: How Employers Systematically Evade Workers’ Compensation

The Science of Cheating: How Employers Systematically Evade Workers’ Compensation
In California, workers’ compensation insurance isn’t optional. It’s the law.

But some employers—especially those in staffing, agriculture, security, janitorial, and food production—have turned breaking that law into a business strategy. Not only do they cheat the system, they do it on purpose, following a pattern that repeats itself year after year, worker after worker.

🧩 The Playbook: How It Works
Step 1: Create a shell company.
They start a staffing agency or labor outfit, often with a vague name, sometimes even using a family member as the front.

Step 2: Skip workers’ comp.
By not buying legally required workers’ compensation insurance, they avoid tens or hundreds of thousands of dollars in premiums. Some falsely claim their workers are “independent contractors.” Others just lie outright.

Step 3: Hide injuries, silence complaints.
Workers who get injured are told to “go home and rest.” They’re discouraged from filing claims, sometimes even threatened with termination or deportation.

Step 4: Run it for 2–3 years.
The company grows fast—because it’s illegally cheap to operate. No comp premiums. No benefits. No accountability.

Step 5: Get caught.
Eventually, a whistleblower speaks up, or the state audits them, or someone gets seriously injured and files a public complaint.

Step 6: Declare bankruptcy.
Here’s the kicker: once they’re caught, they shut down the company, walk away from the debts, and start all over again under a new name.

⚠️ The Consequences
For the workers, the damage is devastating:

No medical care for serious injuries.

No wage replacement during recovery.

No protection from retaliation.

While the workers are left hanging, the employers walk free. Sometimes they’re fined. Occasionally they’re charged. But more often than not, they negotiate down their penalties, avoid jail, and return under a new corporate identity.

This isn’t just unethical.
It’s a calculated abuse of the system—and it’s happening across California.

🛡️ How to Fight Back
If you or someone you know was injured working for a company without workers’ comp insurance, there’s still hope:

File a claim through California’s Uninsured Employers Benefits Trust Fund (UEBTF)

Document everything—witnesses, pay stubs, text messages, medical visits

Seek legal help—you may have the right to sue the employer personally

Join forces with organizations like the Workers Rights Compliance Alliance (WRCA)

We investigate these employers, expose their fraud, and connect victims with real legal help.

📣 We Need to Talk About This
These scams don’t just hurt individual workers—they damage the entire economy. Law-abiding employers get priced out. Workers’ trust in the system erodes. And fraud becomes normalized.

It’s time to name it. Shame it. And stop it.

Best Sources for Workers’ Rights Articles in California

Best Sources for Workers’ Rights Articles in California

  1. California Department of Industrial Relations (DIR)
    • Why it’s valuable: The DIR oversees labor law enforcement in California, including the Labor Commissioner’s Office (Division of Labor Standards Enforcement). It provides official resources on wage theft, minimum wage, overtime, meal and rest breaks, and protections against retaliation, regardless of immigration status. The DIR’s website offers brochures, FAQs, and updates on new labor laws, making it a primary source for accurate information.
    • Content for a feed: News releases, “Know Your Rights” brochures (available in multiple languages), and updates on labor law enforcement actions (e.g., wage theft lawsuits against companies like Uber and Lyft).dir.ca.govdir.ca.govdir.ca.gov
    • How to access: Subscribe to the DIR’s newsroom (Communications@dir.ca.gov) or follow their social media accounts on platforms like X (@CA_DIR) for real-time updates. Downloadable resources are available at www.dir.ca.gov.
  2. California Labor Commissioner’s Office
    • Why it’s valuable: A division of the DIR, the Labor Commissioner’s Office focuses on enforcing wage and hour laws, combating wage theft, and protecting workers from retaliation. It publishes detailed FAQs and resources on topics like minimum wage increases (e.g., $16.50/hour in 2025, $20/hour for fast food workers) and workplace safety.dir.ca.gov
    • Content for a feed: Press releases on enforcement actions, minimum wage updates, and worker protection guides (e.g., “How the Labor Commissioner’s Office Can Help Garment Workers Recover Their Unpaid Wages”).dir.ca.govdir.ca.gov
    • How to access: Check www.dir.ca.gov/dlse for updates or contact their toll-free number (833-526-4636) for new publications. Follow their X account for announcements.
  3. California Chamber of Commerce (CalChamber)
    • Why it’s valuable: CalChamber provides compliance tools, HR resources, and updates on California labor laws, particularly for employers and HR professionals. Their HRCalifornia platform covers topics like meal and rest breaks, workers’ compensation, and harassment prevention training, offering a balanced perspective for both employers and employees.calchamber.com
    • Content for a feed: Articles from the HRCalifornia Library, quizzes on compliance (e.g., meal and rest breaks), and updates on new laws like the Workplace Violence Prevention Plan requirement effective July 1, 2024.calchamber.com
    • How to access: Visit www.calchamber.com for free resources or subscribe to their HRCalifornia service for deeper insights. Follow their blog or social media for regular updates.
  4. Center for Workers’ Rights
    • Why it’s valuable: Based in Sacramento, this nonprofit advocates for workers’ rights and provides direct support to employees facing issues like wage theft or unemployment benefit disputes. They focus on practical resources and updates relevant to California workers, including part-time and temporary employees.rightscenter.org
    • Content for a feed: Blog posts on paid sick leave increases (e.g., changes effective January 1, 2024), case studies (e.g., supporting a leasing consultant in an unemployment hearing), and event announcements like union job fairs.rightscenter.org
    • How to access: Visit www.rightscenter.org for blog updates or contact them at info@rightscenter.org. Follow their social media for community-driven content.
  5. Labor Occupational Health Program (LOHP) at UC Berkeley
    • Why it’s valuable: LOHP collaborates with the DIR to produce accessible workers’ rights materials, particularly for vulnerable populations like low-wage or non-English-speaking workers. Their resources focus on workplace safety, heat illness prevention, and general employee rights, available in English, Spanish, Korean, Chinese, and Vietnamese.lohp.berkeley.edu
    • Content for a feed: Booklets on workers’ rights, updates on workplace safety standards (e.g., heat protection for indoor and outdoor workers), and articles on occupational health research.lohp.berkeley.edu
    • How to access: Check lohp.berkeley.edu for downloadable booklets and news. Follow their partner, El Tímpano (@eltimpano_bayarea), on X for local labor coverage.
  6. Legal Blogs and Law Firms Specializing in Employment Law
    • Why it’s valuable: Firms like Kingsley & Kingsley, Myers Law Group, and CDF Labor Law LLP provide detailed articles on California labor laws, covering topics like wrongful termination, discrimination, and overtime pay. These blogs often break down complex laws for employees and include updates on new legislation.cdflaborlaw.comkingsleykingsley.commyerslawgroup.com
    • Content for a feed: Blog posts on employee rights (e.g., privacy, fair wages, protection against harassment), updates on 2025 labor laws, and guides on filing claims with the California Civil Rights Department (CRD) or EEOC.kingsleykingsley.commyerslawgroup.com
    • How to access: Subscribe to blogs from reputable firms like www.kingsleykingsley.com, www.myerslawgroup.com, or www.cdflaborlaw.com. Follow firms like @natlawreview on X for legal updates.
  7. Shift Project (Harvard Kennedy School and UCSF)
    • Why it’s valuable: The Shift Project conducts research on hourly workers’ conditions in California, highlighting labor law violations like unpaid overtime and denied sick leave. Their reports offer evidence-based insights into enforcement gaps, making them a critical source for understanding real-world challenges.hks.harvard.edu
    • Content for a feed: Research reports (e.g., 91% of hourly workers experience labor violations), policy briefs, and articles on improving enforcement of labor standards.hks.harvard.edu
    • How to access: Visit www.hks.harvard.edu for reports or subscribe to their newsletter for public policy insights.
  8. Oxfam America
    • Why it’s valuable: Oxfam’s Best and Worst States to Work index ranks California’s labor policies, focusing on wages, protections, and union rights. While not California-specific, their reports provide context on how the state’s laws compare nationally, useful for a broader perspective.oxfamamerica.org
    • Content for a feed: Annual index updates, articles on minimum wage ratios, paid leave, and protections against sexual harassment.oxfamamerica.org
    • How to access: Check www.oxfamamerica.org for reports and sign up for their newsletter or follow @OxfamAmerica on X.

Tips for Building a Feed

  • RSS Feeds and Newsletters: Many of these sources (e.g., DIR, CalChamber, Shift Project) offer RSS feeds or email subscriptions for automatic updates. Set up an RSS reader like Feedly to aggregate content.
  • Social Media Monitoring: Follow X accounts like @CA_DIR, @natlawreview, and @eltimpano_bayarea for real-time posts on labor law changes and worker stories. Use hashtags like #CaliforniaLaborLaws or #WorkersRights to track discussions.
  • Custom Alerts: Set up Google Alerts for terms like “California workers’ rights” or “California labor laws 2025” to capture articles from additional sources like news outlets (e.g., Los Angeles Times, El Tímpano).
  • Verify Sources: Cross-check information from advocacy groups or law firms with official DIR resources to ensure accuracy, as some blogs may prioritize legal services over impartiality.

Why These Sources?

These sources were selected for their authority (government agencies like DIR), practical focus (e.g., Center for Workers’ Rights), and research depth (e.g., Shift Project). They cover key workers’ rights topics like minimum wage ($16.50/hour in 2025, higher for fast food and healthcare workers), overtime, meal/rest breaks, anti-discrimination laws, and safety protections, ensuring a comprehensive feed. They also provide multilingual resources and updates on new laws (e.g., Workplace Violence Prevention Plan, effective July 1, 2024).shouselaw.comlegal.thomsonreuters.comhks.harvard.edu

Overview of the Regular Rate of Pay Under the Fair Labor Standards Act (FLSA)

December 2019

This fact sheet provides general information regarding the regular rate of pay under the FLSA.

The FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at not less than time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek.  Fact Sheet #22 provides general information about determining hours worked. 

The amount of overtime pay due to an employee is based on the employee’s regular rate of pay and the number of hours worked in a workweek. Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment (except for the statutory exclusions) in any workweek by the total number of hours actually worked to determine the regular rate.  Fact Sheet #23 provides additional information regarding overtime pay.

The regular rate of pay is based upon actual facts and cannot be circumvented by an agreement. The regular rate may not be lower than the FLSA minimum wage or, where applicable, a higher state or local minimum wage.  If the regular rate is higher than the federal FLSA minimum wage, overtime compensation must be calculated using that higher regular rate.  Fact Sheet #23 provides additional information regarding the calculation of overtime pay.

The formula to compute the regular rate is:

Total compensation in the workweek (except for statutory exclusions) ÷ Total hours worked in the workweek = Regular Rate for the workweek

Exclusions from the regular rate

Under the FLSA, the regular rate includes “all remuneration for employment paid to, or on behalf of, the employee.”  The FLSA (29 USC § 207(e)) provides an exhaustive list of types of payments that can be excluded from the regular rate of pay when calculating overtime compensation.  Unless specifically noted, payments that are excludable from the regular rate may not be credited towards overtime compensation due under the FLSA.  Additional information regarding exclusions from the regular rate may be found in the regulations, 29 C.F.R. § 778

.200-.225.  The following types of payments are excludable from the regular rate:

Gifts and payments in the nature of gifts on special occasions

Sums paid as gifts, including payments in the nature of gifts made on holidays or on other special occasions, or as a reward for service may be excluded from the regular rate, provided the amounts of the gifts (or payments) are not measured by or dependent on hours worked, production, or efficiency.  Examples include, but are not limited to, coffee, snacks, coffee cups, t-shirts, raffle prizes, certain sign-on bonuses, and certain longevity bonuses.  

Payments for occasional periods when no work is performed due to vacation, holidays, or illness; reimbursable business expenses; and other similar payments

Payments for Leave:  Employers may exclude from the regular rate certain payments made for occasional periods when no work is performed.  This includes paid vacation, holiday, sick leave, and other paid time off.  It also includes payments for occasional periods when the employer fails to provide sufficient work, such as when machinery breaks down, expected supplies do not arrive, or there is inclement weather.

Similarly, payments for unused paid leave (also known as paid leave buy-backs) or payments when the employee works instead of taking leave or a paid holiday, are not required to be included in the regular rate.  In the case where an employee reports to work on the holiday and is paid for hours worked plus the holiday payment, the holiday payment is excludable from the regular rate, because it is not considered a payment for hours worked.  Pay for unused leave is similarly excludable.  The pay must be approximately equivalent to the employee’s normal earnings for the period of time that is being “bought back.”  Such payment may be made during the same period when the employee forgoes leave or during a subsequent pay period as a lump sum.

Some employers provide paid meal breaks when employees are relieved from their work duties.  Bona fide meal breaks are not hours worked and these payments do not automatically convert the time to hours worked.  The pay for these meal breaks may be excluded from the regular rate, unless an agreement or established practice indicates the parties have treated the time as hours worked, in which case the payments must be included in the regular rate.

Reimbursement for business expenses:  Reimbursement of the actual or reasonably approximate amount of expenses that an employee incurs while furthering the employer’s interests may be excluded from the regular rate.  Examples include, but are not limited to:

  • Business supplies, materials, or tools
  • Cell phone plans
  • Membership dues in a professional organization
  • Credentialing exam fees
  • Travel expenses

Other similar payments that are not compensation for employment: 

“Show-up” or “reporting” pay compensates an employee for when the employee reports to work as scheduled but is sent home early because there is insufficient work or the employee is not needed to complete the shift.  Such payments may be excluded from the regular rate provided they are made on an infrequent and sporadic basis. 

“Call-back” pay is extra compensation paid to an employee for responding to a call from the employer to perform extra work that was unanticipated by the employer.  Such pay is in addition to the compensation for the time actually worked.  Call-back pay may be excluded from the regular rate provided the call-back was not prearranged.  Payments may be considered prearranged if the scheduling issue that necessitated the payment was anticipated and could have been reasonably scheduled in advance. The specific facts of the situation determine whether the employer anticipated the work and could have scheduled the work. 

Some penalties imposed under state and local scheduling laws are similar to “show up” pay or “call-back” pay, and therefore may be excludable from the regular rate. See Fact Sheet #56B for additional information regarding state and local scheduling law penalties.

Additionally, a payment or the cost of a convenience provided to employees is excludable as an “other similar payment” only if there is no connection to hours worked, services rendered, job performance, or other criteria linked to the quality or quantity of the employee’s work.  These conveniences, often referred to as “perks,” include, but are not limited to:

  • On-the-job medical care and on-site treatment from specialists such as chiropractors, massage therapists, personal trainers, physical therapists, counselors, or Employment Assistance Programs
  • Recreational facilities, such as gym access, gym memberships, and fitness classes
  • Wellness programs, such as health risk assessments, vaccination clinics, nutrition and weight loss programs, smoking cessation, and financial counseling, and mental health wellness programs
  • Employee discounts on retail goods or services
  • Parking benefits and spaces
  • Tuition payments, which includes payments for an employee’s or an employee’s family member’s tuition, regardless of whether the payments are made to the employee, an education provider, or a student-loan repayment program
  • Adoption assistance

Discretionary Bonuses

Such bonuses may be excluded from the regular rate only if:

  • Both the fact that the bonus payment is to be made and the amount of the bonus payment are at the sole discretion of the employer at or near the end of the period; and
  • The bonus payment is not made according to any prior contract, agreement, or promise causing an employee to expect such payments regularly. 

The label assigned to the bonus and the reason for the bonus do not conclusively determine whether the bonus is discretionary.  More information regarding discretionary bonuses is available in Fact Sheet #56C.

Profit-sharing plans

Payments made pursuant to a bona fide profit-sharing plan or trust or a bona fide thrift saving plan may be excluded from the regular rate.   

Employer Contributions to Benefit Plans

Employers may exclude from the regular rate contributions irrevocably made by an employer to a trustee or third person as part of a bona fide plan for death, disability, advanced age, retirement, illness, medical expenses, hospitalization, accident, unemployment, legal services, or other events that could cause significant future financial hardship or expense.  

Premium Payments for Non-FLSA Overtime

Extra compensation paid at a “premium rate” for certain hours worked by the employee because such hours are hours worked in excess of eight in a day, in excess of 40 hours in the workweek, or in excess of the employee’s normal working hours or regular working hours, as the case may be, may be excluded from the regular rate of pay.  Such payments may be credited towards overtime compensation due under the FLSA.

Extra compensation paid at a “premium rate” for work on Saturdays, Sundays, holidays, or regular days of rest, or on the sixth or seventh day of the workweek may be excluded if the premium rate is at least equal to one and one-half times the rate established in good faith for like work performed in nonovertime hours on other days.  Such compensation may be creditable toward overtime pay due under the FLSA.

Extra compensation provided by a “premium rate” under an applicable employment contract or collective bargaining agreement for work outside of the hours established in good faith by the contract or agreement as the basic, normal, or regular workday (not exceeding eight hours) or workweek (not exceeding 40 hours) if the premium rate is at least equal to one and one-half times the rate  established in good faith by the contract or agreement for like work performed during such workday or workweek.  Such extra compensation may be creditable toward overtime pay due under the FLSA.

Stock Options

Any value or income derived from employer-provided grants or rights provided through a stock option, stock appreciation right, or bona fide employee stock purchase program meeting certain criteria may be excluded from the regular rate.  See Fact Sheet #56 for more information.

General Principles:

  • All compensation for hours worked, services rendered, or performance must be included in the regular rate.
  • When a payment is a wage supplement, even if not directly related to employee performance or hours worked, it is still compensation for “hours of employment” and must be included in the regular rate.
  • The determination of whether a particular payment, perk, or benefit may be excluded from the regular rate is made on a case-by-case basis applying the requirements set out in the statute to the specific circumstances.
     

Hotel and Motel Establishments Under the Fair Labor Standards Act (FLSA)

Revised January 2020

This fact sheet contains general information on how the FLSA applies to employees of hotels and motels.

Characteristics

The primary function of a hotel or motel is to provide lodging facilities to the general public. In addition, most hotels or motels provide food to guests and many sell alcoholic beverages. These establishments may also earn revenue from other activities such as valet services offering cleaning and laundering of garments for guests, news stands, and renting out rooms for meetings, lectures, trade exhibits, and weddings.

Coverage

The FLSA includes two methods for applying its provisions to employees of hotels or motels. The “enterprise” basis of coverage provides that if the employer’s annual dollar volume of sales or business is $500,000 or more, whether from only a single establishment or from an enterprise with multiple establishments, and the employer has at least two employees engaged in commerce or in the production of goods for commerce or handling such goods, all employees of the enterprise are covered by the FLSA. The FLSA also provides an “individual employee” basis of coverage that applies even if the annual volume of sales or business is less than $500,000. Employees may still be covered if they individually engage in interstate commerce or produce goods for interstate commerce. Interstate commerce includes such activities as transacting business across state lines via interstate telephone calls or the U.S. Mail, ordering or receiving goods from an out-of-state supplier, or handling the accounting or bookkeeping for such activities. It would also include handling credit card transactions that involve the interstate banking and finance systems.

Requirements

Minimum Wage: Covered nonexempt workers must be paid at least the minimum wage of $7.25 per hour effective July 24, 2009. Wages are due on the regular payday for the pay period covered. Deductions from wages for items such as required uniforms are illegal if they reduce the employee’s wages below the minimum wage or cut into any overtime pay. Tips may be included as part of wages for employees who regularly receive more than $30 a month in tips. However, the employer must pay at least $2.13 an hour in direct wages to tipped employees and make sure that the amount of tips actually received by tipped employees is enough to meet the remainder of the minimum wage (or otherwise pay the difference in wages).

Overtime: Overtime must be paid at not less than one and one-half times the employee’s regular rate of pay for each hour worked in excess of 40 a week. A tipped employee’s regular rate for overtime purposes must include the amount of tip credit claimed by the employer, plus the reasonable cost or fair value of any facilities furnished to the employee as allowed by the FLSA (such as the cost of meals), and the cash wages including any commissions and certain bonuses paid by the employer.

Tips: Tipped employees are those who customarily and regularly receive more than $30 a month in tips. If the employer elects to claim a tip credit, the employer must inform employees in advance, advise them of the amount of tip credit to be claimed, and pay them at least the applicable minimum wage when wages and tips are combined. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.

Youth Minimum Wage: Employers may pay a youth minimum wage of not less than $4.25 an hour to employees under 20 years old during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain prohibitions against employers displacing any employee in order to hire someone at the youth minimum wage.

Youth Employment: The FLSA child labor regulations forbid the employment of minors under age 14 in non-agricultural jobs, restrict the hours of work and limit the occupations for 14- and 15-year olds, and forbid the employment of minors under age 18 in hazardous occupations.

Records: The FLSA requires employers to keep records of wages, hours, and other items, as specified in the record keeping regulations, 29 CFR Part 516

.

Exemptions: Section 13(a)(1) of the FLSA exempts bona fide executive, administrative, professional, and outside sales employees from the minimum wage and overtime pay requirements of the FLSA, if they meet certain tests regarding their job duties and responsibilities and are compensated “on a salary basis” at not less than stated amounts. Further information concerning these exemptions can be found in Regulations, 29 CFR Part 541

.

Typical Problems Causing Non-Compliance Include:

  • Employees placed on salary and classified as exempt without regard to the duties performed.
  • Failure to maintain records of, or pay overtime to, non-exempt salaried employees.
  • Failure to record and pay employees for all hours suffered or permitted to be worked.
  • Illegal deductions from pay for items like cash register shortages, uniforms, errors, bad checks, etc.
  • Failure to pay the correct overtime rate to tipped employees, or failure to pay the correct overtime rate that includes all service charges, commissions, bonuses and all other remuneration.
  • For employees paid with the tip credit: Tips not sufficient to make up the difference between the employer’s direct wage obligation and the minimum wage; employees receiving tips only; and sharing a portion of tipped employees’ tips with employees who are not eligible because they do not normally receive tips such as dishwashers, cooks, chefs, and janitors.
  • Paying straight time for hours worked beyond 40 per week instead of required overtime pay, or averaging the number of hours worked over two or more weeks to avoid overtime pay.
  • Failure to pay minimum wage/overtime to temporary help or employee leasing firm workers who are jointly employed by the hotel. Information concerning joint employment can be found in Regulations, 29 CFR Part 791

.

Manufacturing Establishments Under the Fair Labor Standards Act (FLSA)

Revised July 2008

This fact sheet provides general information concerning the application of the FLSA to manufacturers.

Characteristics

Employees who work in manufacturing, processing, and distributing establishments (including wholesale and retail establishments) that produce, handle, or work on goods for interstate or foreign commerce are included in the category of employees engaged in the production of goods for commerce. The minimum wage and overtime pay provisions of the Act apply to employees so engaged in the production of goods for commerce.

Coverage

The FLSA applies to employees of a manufacturing business covered either on an “enterprise” basis or by “individual” employee coverage. If the manufacturing business has at least some employees who are “engaged in commerce” and meet the $500,000 annual dollar volume test, then the business is required to pay all employees in the “enterprise” in compliance with the FLSA without regard to whether they are individually covered.

A business that does not meet the dollar volume test discussed above may still be required to comply with the FLSA for employees covered on an “individual” basis if any of their work in a workweek involves engagement in interstate commerce or the production of goods for interstate commerce. The concept of individual coverage is indeed broad and extends not only to those employees actually performing work in the production of goods to be directly shipped outside the State, but also applies if the goods are sold to a customer who will ship them across State lines or use them as ingredients of goods that will move in interstate commerce. Additionally, employees who handle interstate calls, mail, invoices, or receive packages, etc., are individually covered. Other persons, such as guards, janitors and maintenance employees who perform duties which are closely related and directly essential to such interstate activities are also covered by the FLSA.

It has been the experience of the Wage and Hour Division that virtually all employees of manufacturers are covered by the Act’s provisions.

Requirements

Covered, nonexempt employees must be paid the Federal minimum wage. This minimum rate must be met regardless of whether the employees are paid by time, piece, job, incentive, or any other basis. The cost of tools, uniforms or other similar requirements may not be borne by the employee where such cost would reduce the wages paid in the workweek below the required minimum wage or in any way reduce the wages due for overtime hours.

Youth Minimum Wage: The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of not less than $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the youth minimum wage.

Unless specifically exempt, all covered employees must receive overtime pay for hours worked in excess of 40 in a workweek at a rate of not less than one and one-half times their regular rates of pay, regardless of the payroll frequency (bi-weekly, semi-monthly etc.). The regular rate of pay is defined as all remuneration (including production bonuses, shift differentials, attendance bonuses) divided by the total hours of work in the workweek.

Typical Problems

  1. Hours Worked: Failure to count and pay for all the hours as work time such as time spent oiling, greasing, cleaning or installing machines at the start or end of the workday; time spent in travel from job site to job site; or time spent at a designated place to receive instructions or to pick up and carry tools to a designated place.
  2. Exemptions: Employees treated as exempt simply because they have impressive titles or are paid on a salary basis.
  3. Minors under the age of 18 employed in restricted occupations, work areas, or improper hours and times of work.
  4. Employees performing work in their private homes in restricted industries without prior certification from Wage and Hour.
  5. Recordkeeping: Failure to make and keep the required records on wages, hours and other items listed in the recordkeeping regulations (29 CFR Part 516
  1. ).

Some Other Pertinent Labor Laws:

  1. The Immigration Reform and Control Act requires employers to complete and maintain I-9 forms to verify the employment eligibility of all individuals hired after November 6, 1986.
  2. The Wage Garnishment Law limits the amount of an individual’s income that may be garnished and prohibits firing an employee whose pay is garnished for a single debt.
  3. The Employee Polygraph Protection Act prohibits most private employers from using any type of lie detector tests either for pre-employment screening or during the course of employment.
  4. The Family and Medical Leave Act requires covered employers to provide up to 12 weeks of unpaid, job protected leave to “eligible” employees for certain family and medical reasons. Where to Obtain Additional Information

Retail Industry Under the Fair Labor Standards Act (FLSA)

Revised May 2020

This fact sheet provides general information concerning the application of the FLSA to employees of the retail industry.

Characteristics

A retail establishment is an establishment 75% of whose annual dollar volume of sales is not for resale and is recognized as retail in the particular industry. The Wage and Hour Division applies the analysis in 29 CFR Part 779

to all establishments when determining whether an establishment qualifies as a retail establishment.

Coverage

Employees of retail establishments may be covered by the Act in either of two ways. Any retail establishment that is part of an enterprise with an annual dollar volume of sales of at least $500,000 (exclusive of excise taxes at the retail level that are separately stated) must abide by the Act’s requirements. Any employee of a retail establishment, regardless of its sales volume, who is engaged in interstate commerce activities is “covered” on an individual basis. Some examples of interstate commerce activities are:

  • Ordering goods from out-of-state;
  • Verifying and processing credit card transactions;
  • Using the mail or telephone for interstate communications;
  • Keeping records of interstate transactions; or
  • Handling, shipping, or receiving goods moving in commerce.

Requirements

Covered, non-exempt retail establishments are required to meet certain standards under the Act relative to wages and employment of minors.

Covered, non-exempt employees are entitled to the Federal minimum wage. Overtime pay at a rate not less than one and one-half times the employee’s regular rate of pay is required after 40 hours are worked in a workweek. Certain retail or service employees paid by commissions may be exempt from overtime pay.

Youth Minimum Wage: The FLSA allows employers to pay a youth minimum wage of not less than $4.25 an hour to employees who are under 20 years old during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee to hire someone at the youth minimum wage.

The FLSA youth employment regulations prohibit the employment of minors under 14 years old in non-agricultural jobs, restrict the hours of work and limit occupations for 14- and 15-year-olds, and prohibit the employment of workers under 18 years old in hazardous occupations.

The Act requires employers to keep records of wages, hours, and other items, as specified in the recordkeeping regulations. Employers must keep records for employees subject to the minimum wage and overtime provisions as outlined in 29 CFR Part 516

. Records required for exempt employees differ from those for non-exempt workers, for employees working under uncommon pay arrangements, or for employees to whom lodging or other facilities are furnished.

Typical Problems

Hours Worked: Employers must record and pay for all hours worked by employees including any time controlled by the employer, such as time spent “engaged to wait.” Where employees report to work at their scheduled time, the employer must begin counting that as work time. However, if the employer immediately tells the employees that they are not needed, completely relieves them of duty, and gives them a specific report-back time which enables the employees to use the time for their own benefit, this time does not have to be counted as working time. If employees are only told to wait until they are needed, and are not given a specific report-back time that is long enough to use for their own benefit, all of the waiting time is to be counted as hours worked.

Illegal Deductions: Deductions made from employees’ wages for such items as cash or merchandise shortages, required uniforms, and tools of the trade are not legal to the extent that they reduce the wages below the statutory minimum wage or reduce the amount of overtime pay.

Salaried Employees: A salary, by itself, does not exempt employees from the minimum wage or overtime. Whether employees are exempt from minimum wage and overtime depends on their job duties and responsibilities, as well as the salary paid. Often, in retail businesses, salaried employees do not meet all the requirements specified by the regulations to be considered as exempt from overtime pay. The regulations at 29 CFR Part 541 contain a discussion of the requirements for several exemptions under the FLSA (i.e., executive, administrative, and professional employees – including computer professionals, and outside salespersons).

Real Estate and Rental Agencies Under the Fair Labor Standards Act (FLSA)

Revised July 2008

This fact sheet provides general information concerning the application of the FLSA to real estate and rental agencies.

Characteristics

A real estate/rental agency is one which represents both in-state and out-of-state clients in negotiating the purchase or sale of property within the State in which the broker is located, or negotiates for the purchase or sale of property in other states, or collects or remits rents or other monies for property owners.

Coverage

Employees of real estate/rental agencies are individually covered by the Act if they regularly engage in work which is considered to be interstate commerce. This includes, for example, handling goods coming in from outside the state or which will be sent outside the state either by direct shipment or by a customer. Clerical and janitorial employees whose work is closely related and directly essential to such interstate operations are also covered, as are employees regularly engaged in interstate communication by telephone, telegraph, or the mails.

An enterprise is defined in the FLSA to mean the related activities performed, either through unified operation or common control, by any person or persons for a common business purpose. The FLSA applies to enterprises that have employees who are engaged in interstate commerce, produce, handle, sell, or work on goods that have been moved in or produced for interstate commerce, have $500,000 in annual business volume, are named in the FLSA. Covered non exempt employees must be paid in accordance with requirements of the FLSA.

In determining the annual business volume, gross receipts from rental property owned and gross fees from rental property managed should be included. Gross receipts from the sale of property and property insurance should also be included.

Requirements

The FLSA requires the payment of the Federal minimum wage to covered non-exempt employees and overtime pay at a rate of not less than one and one-half times the regular rate of pay after 40 hours of work in a workweek. Wages required by FLSA are due on the regular payday for each pay period. Employers are required to keep records containing information specified in the regulations (29 CFR Part 516

).

The FLSA youth employment regulations forbid the employment of minors under 14, restrict the hours of work and certain occupations for 14 & 15 year olds, and forbid the employment of 16 & 17 year olds in hazardous occupations.

Exemptions from various provisions of the FLSA are provided for employees who meet certain requirements. Among the employees who may be exempt from minimum wage and overtime pay are executive, administrative, professional, and outside sales employees. Each of these categories of employee must meet specified requirements before the exemption may be applied.

Typical Problems

Some problems and misconceptions which Wage and Hour investigations commonly find in this type of business are:

  • Employees being charged for meals, lodging, and other facilities which are actually furnished for the benefit of the employer.
  • Employees being charged full retail cost for facilities furnished for their benefit. They may only be charged actual cost.
  • Improper computation of gross business volume. With respect to the sale of any property or commodity (such as insurance) or the rental of property owned by the employer, gross receipts are counted in determining business volume. In the rental of property owned by someone else, only the commission paid is counted in the gross business volume.

Security Guard/Maintenance Service Industry Under the Fair Labor Standards Act (FLSA)

Revised July 2008

This fact sheet will briefly cover how the FLSA applies to the Security Guard and Maintenance Service Industries.

Characteristics

The security guard service industry includes those firms that provide protection to firms or individuals. Normally, the guard obtains a State license which is portable from firm to firm. The guards cover a post daily and are usually paid on an hourly basis.

The maintenance service industry includes those firms that provide janitorial services in general. Normally, the firm provides the necessary materials to do the cleaning. The employees generally perform work at one or more locations during the work shift.

Coverage

If the security guard or maintenance worker is employed in an establishment that is engaged in commerce or in the production of goods for commerce, such as a warehouse, factory, bank, insurance company, etc, he/she is covered by the FLSA.

If the security guard or maintenance firm has sales or projects sales in excess of $500,000 per year, or is part of other related businesses where there is common ownership, control, or business purpose and the combined sales or projected sales are in excess of $500,000 per year, then the FLSA will apply to all employees of the firm/enterprise.

Requirements

The FLSA requires the payment of the Federal minimum wage and the payment of time and one-half the regular rate of pay for hours worked in excess of 40 in the workweek. The FLSA also requires the firm to make, keep and preserve certain records among which are the hours worked on a daily and weekly basis by non-exempt employees.

There are also certain restrictions in the employment of minors under age 18, such as the number of hours worked per day/week, how late they can work in the day, and the work they may engage in.

Youth Minimum Wage: The 1996 Amendments to the FLSA allow employers to pay a Youth Minimum Wage of not less that $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. The law contains certain protections for employees that prohibit employers from displacing any employee in order to hire someone at the Youth Minimum Wage.

Typical Problems

Security Guard Firms: The security guard cannot bear the cost of the uniform, gun, whistle, belt, and other employer/industry required tools if by purchasing them he/she receives less than the applicable minimum wage or such purchasing would cut into any overtime wages earned. This applies whether she\he buys the uniform directly or if it is sold to the employee by the firm.

The cost of dry cleaning the uniform cannot be borne by the employee if in doing so he/she receives less than the minimum wage or the costs would cut into any overtime wages.

Overtime must be calculated on a workweek basis, and the hours cannot be averaged over a two week period.

The hours worked by guards in more than one post in the same week must be counted together for overtime purposes.

Travel time between work sites must be treated as hours worked..

All hours of work must always be recorded; sometimes they are hidden by showing “expense” payments for hours over 40 in a week, which is illegal.

Maintenance Service Firms: Every person who works must receive payment. If a man and wife team, and/or other family members work together, each member of the team must be carried on the payroll and each must receive proper compensation for their hours worked.

Minors under the age of 16 cannot work past 7:00 p.m., except from June 1st through Labor Day, when they may work until 9:00 p.m.

If minors work, they must also receive proper compensation for the hours they work.

Overtime must be paid after 40 hours of work in the workweek to all non-exempt employees regardless of the method of compensation, i.e., hourly, piece rate, task basis, salary, etc.

The hours worked by a janitor who works in more than one establishment must be counted together for overtime purposes.

Professional Offices Under the Fair Labor Standards Act (FLSA)

Revised July 2008

This fact sheet contains information to assist in determining how the Fair Labor Standards Act (FLSA) applies to Professional Offices, e.g., doctors, lawyers, accountants, etc.

Characteristics

Professional offices provide services to their customers, clients, patients which may or may not involve the sale of “goods” or “products”. Many such offices are small, with few employees, and are local in nature. Others may be part of a larger enterprise with more than one office or establishment.

Coverage

The FLSA provides two methods for determining whether provisions of the Act apply to employees of a given employer.

If the annual dollar volume of sales or business done is $500,000 or more, whether from an enterprise made up of only one establishment or one with multiple establishments, all employees of the enterprise are covered by the Act on an “enterprise” basis.

Additionally, the Act also provides an “individual employee” basis of coverage. If the gross sales or volume of business done does not meet the requisite dollar volume of $500,000 annually, employees may still be covered if they individually engage in interstate commerce, the production of goods for interstate commerce, or in an occupation closely related and directly essential to such production. Interstate commerce includes such activities as transacting business via interstate telephone calls or the U. S. Mail (such as handling insurance claims), ordering or receiving goods from an out-of-state supplier, or handling the accounting or bookkeeping for such activities. It would also include the handling of credit card transactions since that involves the interstate banking and finance systems.

Requirements

Employees who are covered by the FLSA are entitled to be paid at least the Federal minimum wage as well as overtime pay at time and one-half the regular rate of pay for all hours worked over 40 in a workweek. (This may not apply to certain executive, administrative, and professional employees including computer professionals and outside sales). The Act also contains youth employment provisions regulating the employment of minors under the age of 18 in covered work, as well as recordkeeping requirements.

Typical Problems

(1) Paying non-exempt employees a salary and not paying time and one-half for hours over 40 a week, (2) not paying employees for all hours they work, e.g., reporting early or working through lunch break or staying late without being paid for such extra time, (3) not paying for the time employees spend performing work at home or not including such hours for overtime purposes.

Some Other Pertinent Labor Laws:

(1) The Immigration Reform and Control Act requires employers to complete and maintain I-9 forms to verify the employment eligibility of all individuals hired after November 6, 1986. (2) The Wage Garnishment Law limits the amount of an individual’s income that may be garnished and prohibits firing of an employee whose pay is garnished for a single debt. (3) The Employee Polygraph Protection Act prohibits most private employers from using any type of lie detector tests either for pre-employment screening or during the course of employment. (4) The Family and Medical Leave Act requires covered employers to provide “eligible” employees up to 12 weeks of unpaid, job-protected leave each year for specific family and medical reasons.

Child Labor Rules for Employing Youth in Restaurants and Quick-Service Establishments Under the Fair Labor Standards Act (FLSA)

Revised July 2010

This fact sheet provides general information concerning the application of the federal child labor provisions to restaurants and quick-service establishments that employ workers who are less than 18 years of age. For detailed information about the federal youth provisions, please read Regulations, 29 CFR Part 570

.

The Department of Labor is committed to helping young workers find positive, appropriate, and safe employment experiences. The child labor provisions of the FLSA were enacted to ensure that when young people work, the work does not jeopardize their health, well-being, or educational opportunities. Working youth are generally entitled to the same minimum wage and overtime protections as older adults. For information about the minimum wage and overtime e requirements in the restaurant and quick-service industries, please see Fact Sheet 2 in this series, Restaurants and Quick Service Establishment under the Fair Labor Standards Act.

Minimum Age Standards for Employment

The FLSA and the child labor regulations, issued at 29 CFR Part 570

, establish both hours and occupational standards for youth. Youth of any age are generally permitted to work for businesses entirely owned by their parents, except those under 16 may not be employed in mining or manufacturing and no one under 18 may be employed in any occupation the Secretary of Labor has declared to be hazardous.

18 Years of AgeOnce a youth reaches 18 years of age, he or she is no longer subject to the federal child labor provisions.
16 & 17 Years of AgeSixteen- and 17-year-olds may be employed for unlimited hours in any occupation other than those declared hazardous by the Secretary of Labor. Examples of equipment declared hazardous in food service establishments include: Power-driven meat and poultry processing machines (meat slicers, meat saws, patty forming machines, meat grinders, and meat choppers), commercial mixers and certain power-driven bakery machines. Employees under 18 years of age are not permitted to operate, feed, set-up, adjust, repair, or clean any of these machines or their disassembled parts. Motor Vehicles . Generally, no employee under 18 years of age may drive on the job or serve as an outside helper on a motor vehicle on a public road, but 17-year-olds who meet certain specific requirements may drive automobiles and trucks that do not exceed 6,000 pounds gross vehicle weight for limited amounts of time as part of their job. Such minors are, however, prohibited from making time sensitive deliveries (such as pizza deliveries or other trips where time is of the essence) and from driving at night. (See See Fact Sheet #34: Child Labor Provision and the Driving of Automobiles and Trucks under the Fair Labor Standard Act.) Balers and Compactors . Minors under 18 years of age may not load, operate, or unload balers or compactors. Sixteen- and 17-year-olds may load, but not operate or unload, certain scrap paper balers and paper box compactors under certain specific circumstances. (See Fact Sheet #57, in this series, Hazardous Occupations Order No. 12. Hazardous Occupations Order No. 12, Rules for Employing Youth and the Loading, Operating, and Loading of Power-Driven Balers and Compactors under the Fair Labor Standards Act (FLSA)).
14 & 15 Years of AgeFourteen- and 15- year-olds may be employed in restaurants and quick-service establishments outside school hours in a variety of jobs for limited periods of time and under specified conditions. Child Labor Regulations No. 3, 29 C.F.R. 570, Subpart C limits both the time of day and number of hours this age group may be employed as well as the types of jobs they may perform. Child Labor Regulations No. 3, 29 C.F.R. 570 outside school hours; no more than 3 hours on a school day, including Fridays; no more than 8 hours on a nonschool day; no more than 18 hours during a week when school is in session; no more that 40 hours during a week when school is not in session; between 7 a.m. and 7 p.m.-except between June 1 and Labor day when the evening hour is extended to 9 p.m. They may perform cashiering, table service and “busing,” and clean up work, including the use of vacuum cleaners and floor waxers. They may perform kitchen work and other work involved in preparing food and beverages, including the operation of devices used in such work, such as dish-washers, toasters, milk shake blenders, warming lamps, and coffee grinders. They may perform limited cooking duties involving electric or gas grills that do not entail cooking over an open flame. They may also cook with deep fat fryers that are equipped with and utilize devices that automatically raise and lower the “baskets” into and out of the hot grease of oil. They may not operate NEICO broilers, rotisseries, pressure cookers, fryolators, high-speed ovens, or rapid toasters. They may not perform any baking activities. They may dispense food from cafeteria lines and steam tables and heat food in microwave ovens that do not have the capacity to heat food over 140º F. They may not operate, clean, set up, adjust, repair or oil power driven machines including food slicers, grinders, processors, or mixers. They may clean kitchen surfaces and non-power-driven equipment, and filter, transport and dispose of cooking oil, but only when the temperature of the surface and oils do not exceed 100º F. They may not operate power-driven lawn mowers or cutters, or load or unload goods to or from trucks or conveyors. They may not work in freezers or meat coolers, but they may occasionally enter a freezer momentarily to retrieve items. They are prohibited from working in any of the Hazardous Orders (discussed above for 16- and 17-year-olds
Under 14 Years of AgeChildren under 14 years of age may not be employed in non-agricultural occupations covered by the FLSA, including food service establishments. Permissible employment for such children is limited to work that is exempt from the FLSA (such as delivering newspapers to the consumer and acting). Children may also perform work not covered by the FLSA such as completing minor chores around private homes or casual baby-sitting

Work Experience and Career Exploration Program (WECEP)

WECEP is a program designed to provide a carefully planned work experience and career exploration program for 14- and 15-year-old youths who can benefit from a career oriented educational program designed to meet the participants& needs, interests and abilities. The program is aimed at helping youths to become reoriented and motivated toward education and to prepare them for the world of work

State Departments of Education are granted approval to operate a WECEP by the Administrator of the Wage and Hour Division for a 2-year period. Certain provisions of child labor provisions are modified for 14- and 15-year-old participants during the school term.

Students enrolled in an authorized WECEP:

  • They may work during school hours.
  • They may work up to 3 hours on a school day; and as many as 23 hours in a school week.
  • May work in some occupations that would otherwise be prohibited under a variance issued by the Administrator, but they may not work in manufacturing, mining or any of the 17 Hazardous Occupations.

Individual employers may partner with participating local school districts in those states authorized to operate WECEPs

Work-Study Program (WSP)

WSP is a program designed to help academically oriented students enrolled in a college preparatory high school curriculum pursue their college diplomas. Some of the hours standards provisions of Child Labor Regulation No. 3 are varied for certain 14- and 15-year-old students participating in a Department of Labor approved and school-supervised and administered WSP. Participating students must be enrolled in a college preparatory curriculum and identified by authoritative personnel of the school as being able to benefit from the WSP.

Students enrolled in an authorized WSP:

  • May work no more than 18 hours in any one week when school is in session, a portion of which may be during school hours, in accordance with the following formula that is based upon a continuous four-week cycle.
    • In three of the four weeks, the participant is permitted to work during school hours on only one day per week, and for no more than for eight hours on that day.
    • During the remaining week of the four-week cycle, such minor is permitted to work during school hours on no more than two days, and for no more than for eight hours on each of those two days
    • The employment of such minors would still be subject to the remaining time of day and number of hours standards contained Child Labor Regulation No. 3 and discussed earlier in this fact sheet.
  • Are held to all the occupation standards established by Child Labor Regulation No. 3

Operating Without Workers’ Compensation Insurance in California

I. The Problem: Operating Without Workers’ Compensation Insurance in California

  • Legal Mandate: California Labor Code Section 3700 unequivocally states that all employers with one or more employees must provide workers’ compensation benefits. This explicitly includes employees hired through staffing agencies. Both the staffing agency and the client company can share responsibility for worker safety and workers’ comp coverage.
  • Tactics to Avoid Coverage:
    • Misclassification: A common tactic, especially for staffing agencies, is to misclassify employees as “independent contractors” to avoid paying workers’ comp premiums, payroll taxes, and other employee benefits. California has been aggressive in cracking down on this.
    • “Underground Economy”: Some businesses simply operate completely off the books, without any insurance.
  • Risks and Consequences of Non-Compliance: California imposes some of the most severe penalties in the nation:
    • Criminal Offense: Failing to have workers’ compensation coverage is a misdemeanor under California Labor Code Section 3700.5.
      • Punishment: Up to one year in county jail, and/or a fine of up to double the amount of the premium that would have been necessary to secure coverage (but not less than $10,000).
      • Subsequent violations lead to even harsher penalties (e.g., up to one year in jail and a fine of triple the premium, but not less than $50,000).
    • Civil Penalties (Fines):
      • Stop Order: The California Division of Labor Standards Enforcement (DLSE) can issue a “stop order,” prohibiting the use of any employee until coverage is obtained. Failure to observe a stop order is a misdemeanor (up to 60 days in jail and/or a $10,000 fine).
      • Stop Order Penalty: A penalty of $1,500 per employee on the payroll at the time the stop order is issued, up to $100,000.
      • Penalty Assessment Order: The greater of (1) twice the amount the employer would have paid in premiums during the uninsured period, OR (2) $1,500 per employee. If an injured worker files a claim, the uninsured employer can be assessed a penalty of $10,000 per employee on the payroll at the time of injury, up to a maximum of $100,000.
    • Personal Liability: If an employee is injured while the employer is uninsured, the employer is personally responsible for all medical bills, lost wages, and disability benefits. This can be financially devastating.
    • Civil Lawsuits: Injured employees can file a civil action against the uninsured employer in addition to filing a workers’ compensation claim. In these civil cases, the employer is presumed negligent and loses common law defenses. The employee may also be entitled to have their attorney’s fees paid by the employer.
    • Uninsured Employers Benefits Trust Fund (UEBTF): This state fund pays benefits to injured workers of illegally uninsured employers. However, the UEBTF then aggressively pursues the uninsured employer for full reimbursement, plus penalties.
    • Business Reputation: Operating without proper insurance can severely damage a business’s reputation and trust among employees and clients.

II. Prosecution and Enforcement in California

California employs multiple agencies and strategies to prosecute uninsured employers, including staffing agencies:

  1. California Department of Insurance (CDI) – Fraud Division:
    • The CDI’s Fraud Division is a key player in investigating workers’ compensation fraud, including “premium fraud” (employers misstating payroll or employee classifications) and “uninsured employer fraud.”
    • They work closely with local district attorneys’ offices across the state to prosecute violators.
    • The CDI maintains a public website listing Workers’ Compensation Fraud Convictions, detailing the name, case number, county, description of offense, and amount defrauded. This is a valuable resource for finding specific prosecution examples. (e.g., you can browse monthly conviction lists from 2020-2024 on their site).
    • Source: Workers’ Compensation Fraud Convictions – California Department of Insurance
  2. Local District Attorneys’ Offices (DA’s):
  3. California Division of Labor Standards Enforcement (DLSE):
  4. Workers’ Compensation Appeals Board (WCAB):
    • If an injured worker files a claim against an uninsured employer, the WCAB hears the case. If an award is made to the worker, the UEBTF pays, and the employer is then pursued for reimbursement and penalties.
    • Recent legislative efforts (like the Senate Bill S847 mentioned in one search result from May 2025) are aimed at strengthening the Director of the DIR’s ability to identify uninsured employers, place liens on their property, and recover funds for the UEBTF.

III. Resolution and Solutions

When a staffing agency or other employer is found operating without workers’ compensation insurance in California, the resolution typically involves:

  1. Securing Immediate Coverage: The business is compelled to obtain workers’ compensation insurance. Stop-work orders remain in effect until this is done.
  2. Payment of Fines and Penalties: Substantial civil penalties and administrative fines are assessed for the period of non-compliance.
  3. Restitution: If an employee was injured, the employer must reimburse the UEBTF for any benefits paid to the injured worker.
  4. Criminal Prosecution: Depending on the severity and intent, individuals responsible within the staffing agency can face misdemeanor charges, potentially leading to jail time. Felony charges are possible for more severe fraud or repeat offenses (e.g., lying to reduce premiums, as mentioned by the Shasta County DA).
  5. Liens and Asset Forfeiture: The state can place liens on the employer’s property (including real estate) to recover unpaid benefits and penalties.
  6. Increased Scrutiny: Staffing agencies, in particular, face ongoing scrutiny due to the shared responsibility for temporary workers and the historical issue of misclassification.

In essence, California’s system is designed to make operating without workers’ compensation insurance extremely costly and legally perilous for any employer, including staffing agencies, with a focus on protecting injured workers and maintaining a fair business environment.

find specific articles of these happenings and prosecutions in california

You’re in luck! California is very active in prosecuting workers’ compensation fraud, including cases where employers (sometimes staffing agencies or companies using their services) operate without proper coverage. The California Department of Insurance (CDI) is a key player and publishes information on convictions.

Here are some specific articles and resources detailing prosecutions in California:

1. Recent Convictions and Press Releases from the California Department of Insurance (CDI):

The CDI has a dedicated section for “Workers’ Compensation Fraud Convictions” where they list recent cases. This is an excellent source for specific examples.

  • San Jose security company owner sentenced in $3.4 million workers’ compensation fraud case (May 19, 2025):
    • Details: Raul Chavez, owner of Tactical Operations Protective Services (a company providing security guard, staffing, and patrol services), was sentenced for a six-year scheme to underreport payroll and avoid paying workers’ compensation premiums. He concealed over $3.4 million in payroll, resulting in $205,565 in unpaid premiums. He pleaded guilty to felony premium fraud, received 180 days in county jail, two years probation, and ordered to pay restitution.
    • Relevance: This is a very recent and highly relevant example, as it directly involves a company that performs “staffing” services.
    • Source: California Department of Insurance Press Release
  • CDI Workers’ Compensation Fraud Convictions Database:
    • The CDI explicitly states they post convictions for violations of various codes, including Labor Code Section 3700.5 (failure to secure payment of compensation). You can browse monthly lists of convictions.
    • How to use it: Go to the CDI’s website and navigate to their “Workers’ Compensation Fraud Convictions” page. From there, you can select specific years and months to see detailed lists of convictions, often including the name of the convicted party, the county, a description of the offense (which often includes operating without coverage or premium fraud), the amount defrauded, and the punishment imposed.
    • Source: Workers’ Compensation Fraud Convictions – California Department of Insurance

2. Local District Attorney (DA) Offices Prosecutions:

California’s county District Attorney offices are on the front lines of prosecuting these cases. Many have dedicated fraud units. While I can’t link to every single case, here are examples of their programs and what they report:

  • Merced County District Attorney: Their website highlights that it is illegal for an employer to operate without workers’ compensation insurance (CA Labor Code Section 3700.5) and outlines the penalties, including up to one year in jail and/or a fine of up to double the premium owed, but not less than $10,000. They also mention that they receive reports from the CA Department of Insurance Fraud Hotline.
  • Shasta County District Attorney: Also has a Workers’ Compensation Insurance Fraud Program and details penalties for both employees and employers, including for “Employer Fraud” (lying to their insurance company about the number of employees, which leads to underpaying premiums or operating uninsured).

3. Precedent-Setting Cases (Employer Liability for Bogus PEOs):

Sometimes, the “staffing agency” itself might be operating illegally, or an employer might contract with a “Professional Employer Organization (PEO)” that is bogus and doesn’t provide legitimate workers’ comp. California courts have addressed this.

  • “Precedent: Employer Held Liable For Bogus PEO” (February 12, 2025):
    • Details: This article from Workers’ Comp Executive discusses a landmark decision where an employer, Garcias Pallets, was held liable for over $1.3 million in penalties for operating without valid workers’ comp coverage, despite having contracted with PEOs whose coverage was “bogus.” This highlights the due diligence required by businesses when using labor contractors or staffing solutions.
    • Relevance: This shows how an employer can be held liable even when they thought they were getting coverage through a third party (like a PEO or staffing agency) that was not legitimate.
    • Source: Precedent: Employer Held Liable For Bogus PEO | Workers’ Comp Executive

4. Large-Scale Fraud Rings (often involving shell companies/labor brokers):

While not always explicitly “staffing agencies,” many large workers’ compensation fraud schemes involve networks of shell companies, labor brokers, or fake businesses designed to avoid premiums or exploit workers.

How to find more specific cases:

  • Directly search the CDI’s “Workers’ Compensation Fraud Convictions” database. It’s the most direct route for official convictions.
  • Search District Attorney websites: Look for press releases from California county DAs, specifically for their “Workers’ Compensation Fraud Unit” or “White Collar Crime” sections.
  • Use more targeted keywords: If you know a specific county, industry (e.g., construction staffing, agricultural labor contractors), or a time frame, add those to your search.

These resources provide concrete examples and demonstrate the rigorous enforcement efforts in California against employers, including those in the staffing industry, who attempt to operate without the legally mandated workers’ compensation insurance. Sources

Workers’ Comp Executive

www.wcexec.com

PEO Caught With No Coverage By WCAB Judge | | Workers’ Comp Executive

“The insurance in place that EO referenced in the Objection dated December 22, 2023 referred to coverage by co-employer and EO affiliated company, Simplify HR, …

California Department of Insurance

www.insurance.ca.gov

Workers’ Compensation Fraud Convictions – California Department of Insurance

Enforcement Overview / Fraud Division Overview / Workers’ Compensation Fraud Convictions.

Yrulegui & Roberts

www.rjylaw.com

What is the Legal Definition of Workers’ Compensation Fraud in California?

Some of the most common examples of workers’ compensation fraud in California include: A False Claim by an Employee: As an example, someone might claim they …

California Department of Insurance – CA.gov

www.insurance.ca.gov

San Jose security company owner sentenced in $3.4 million workers’ compensation fraud case – California Department of Insurance

News: 2025 Press Release. For Release: May 19, 2025. San Jose security company owner sentenced in $3.4 million workers’ compensation fraud case. SAN JOSE, Calif …

Merced County

www.countyofmerced.com

Workers’ Compensation Insurance Fraud | Merced County, CA – Official Website

– District Attorney. – About Us. – Units. – Fraud Unit. – Workers’ Compensation Fraud.

www.wcexec.com

PEO Caught With No Coverage By WCAB Judge | | Workers’ Comp Executive

Operating Without Workers’ Compensation Insurance New York

I. The Problem: Operating Without Workers’ Compensation Insurance

  • Legal Requirement: New York law generally requires all employers with one or more employees to carry workers’ compensation insurance. This specifically includes staffing agencies, as they are considered the employer of the temporary workers they place.
  • Risks of Non-Compliance:
    • Financial Penalties: Substantial fines can be imposed, often $2,000 for every 10-day period without coverage, or up to two times the cost of compensation for the payroll during the period of failure. These can quickly accumulate.
    • Criminal Charges:
      • For businesses with five or fewer employees, failure to secure coverage is a misdemeanor, punishable by fines and potentially jail time.
      • For businesses with more than five employees, it can be a Class E felony, with higher fines and potential incarceration.
      • Repeat offenders can face even more severe penalties, including Class D felonies.
    • Civil Liability: If an employee is injured, the uninsured employer is personally responsible for all medical bills, lost wages, and potential disability benefits, which can be devastating. Injured workers can also sue the employer directly.
    • Stop-Work Orders: The state can issue stop-work orders, shutting down the business until proof of insurance is provided.
    • Personal Liability: Corporate officers can be held personally liable for claims and penalties.
    • Misclassification Fraud: A common tactic used by some staffing agencies to avoid workers’ comp is to misclassify employees as “independent contractors.” New York actively cracks down on this, as it deprives workers of benefits and gives dishonest companies an unfair advantage.

II. Prosecution and Enforcement in New York

New York employs a multi-pronged approach to combat staffing agencies operating without workers’ compensation insurance:

  1. New York State Workers’ Compensation Board (WCB) Investigations:
    • The WCB is the primary agency responsible for enforcing workers’ compensation laws.
    • They conduct investigations, often initiated by inquiries when an employer’s coverage information is missing.
    • If non-compliance is found, they issue penalty notices.
    • Cases investigated by the WCB are often referred to the New York State Office of the Attorney General for prosecution.
  2. Office of the New York State Attorney General (OAG) Prosecutions:
    • The OAG plays a crucial role in prosecuting employers, including staffing agencies, for workers’ compensation fraud and non-compliance.
    • They bring civil and criminal charges, often seeking significant fines and restitution for unpaid wages or benefits.
    • The OAG may work in coordination with district attorneys’ offices across the state.
  3. Task Forces and Coordinated Efforts:
    • New York has established task forces, such as the Wage Theft Task Force (a collaboration between the Department of Labor, the Attorney General, and District Attorneys), which also addresses issues related to workers’ compensation by cracking down on misclassification and wage theft.
    • There have been increased efforts to conduct random audits of companies’ business records and surprise audits to deter non-compliance.
  4. Increased Penalties and Enforcement:
    • New York has significantly increased the penalties for non-compliance over time to act as a stronger deterrent.
    • The state has invested in new technologies and systems to identify businesses that have failed to register or pay into the workers’ compensation system.
  5. Public Awareness and Reporting:
    • The state promotes awareness among workers about their rights, including the right to workers’ compensation.
    • Hotlines and online reporting tools are available for workers to report wage theft or suspected non-compliance.

III. Resolution and Solutions

When non-compliance is identified and prosecuted, the solutions generally involve:

  1. Securing Coverage: The primary goal is to compel the staffing agency to obtain the required workers’ compensation insurance coverage. In some cases, stop-work orders are lifted only after proof of insurance is provided.
  2. Payment of Fines and Penalties: Agencies are assessed substantial civil fines for the period they operated without coverage.
  3. Restitution: If employees were injured while the agency was uninsured, the agency will be held responsible for covering medical expenses and lost wages, either directly or by reimbursing the Uninsured Employers’ Fund if it paid out benefits.
  4. Criminal Convictions: For more severe or repeated violations, criminal convictions can lead to higher fines, probation, and even jail time for responsible individuals.
  5. Debarment: Businesses found in violation may be debarred from bidding on or being awarded public works contracts.
  6. Policy Reforms: The state continually reviews and reforms policies to make it harder for businesses to evade workers’ compensation obligations and to enhance enforcement capabilities.

In essence, New York’s approach to staffing agencies operating without workers’ compensation insurance involves aggressive enforcement through fines, criminal prosecution, civil penalties, and a focus on preventing misclassification, all aimed at protecting workers and ensuring a fair playing field for compliant businesses. Sources

Can Intel be fixed

Summary

Intel, once the world’s largest chipmaker for 25 years, is currently grappling with substantial challenges in both chip manufacturing and designing, evident from its alarming cash flow situation which saw nearly $16 billion drained from the company last year. The predicament stems from a historical technological monopoly that the company held since its inception in 1968 but has since eroded as competitors like AMD, Nvidia, and TSMC have surged ahead by splitting specialization between chip design and manufacturing. This transformation has led to rising costs and reduced technological advancements for Intel, particularly from 2014 to 2020, during which competitors caught up by providing cheaper and faster CPUs. Intel’s recent moves, including significant investments in new factories and upgrading existing facilities, appear to be strategic. However, they risk leaving the company’s design side vulnerable, especially in the burgeoning AI chip market. Despite reporting a record loss in its 56-year history and the ousting of CEO Pat Gelsinger, newly appointed CEO Lip-Bu Tan remains optimistic about reinvigorating Intel’s competitiveness and recovering from these multifaceted challenges.

Highlights

  • 📉 Significant Cash Flow Issues: Intel burned through nearly $16 billion last year, signaling severe financial distress.
  • 🏗️ Aggressive Infrastructure Investments: Intel announced plans for new factories worth $120 billion, aiming to revitalize manufacturing capabilities despite risks.
  • 🚀 Shift in Industry Dynamics: Competitors like TSMC have outpaced Intel in chip design and manufacturing, capturing market share effectively.
  • ⚖️ Struggles in AI Market: Intel’s failure to innovate in AI chip design has severely impacted its sales, particularly with the lackluster performance of its Gaudi product.
  • 🔄 Leadership Change Amid Crisis: The departure of CEO Pat Gelsinger reflects deeper organizational tumult, as new CEO Lip-Bu Tan takes on monumental challenges ahead.
  • ⏳ Historical Context of Stagnation: Intel’s technology update cycle slowed significantly between 2014 and 2020, causing a competitive lag.
  • 🔍 Long-Term Recovery Uncertain: Investors face immense pressure as Intel’s valuation struggles to match its asset worth, raising questions about future profitability and sustainability.

Key Insights

  • 💰 Deep Financial Challenges: Intel’s cash burn of $16 billion illustrates a worrying trend, suggesting inefficiencies and misalignments in both its manufacturing and product development strategies. This significant cash drain could hinder investments necessary for revitalizing its core business operations and maintaining competitive edge.
  • ⚙️ Ineffective Strategic Shifts: The company’s focus on building new factories while neglecting the crucial area of chip design and innovation showcases a flawed corporate strategy. This misallocation of resources indicates an inability to balance short-term manufacturing needs with long-term competitive positioning in the technology sector.
  • 📈 Competitors Quickly Adapting: The rise of specialized firms like TSMC, which capitalize on low-cost foreign labor and cutting-edge manufacturing techniques, has put immense pressure on Intel. This shift highlights the importance of adaptability in the tech industry, especially when demand for sophisticated chip designs increases.
  • 🧠 AI Chip Market Missed Opportunity: With the dawn of artificial intelligence, Intel’s failure to innovate in the AI chip sector is a critical misstep. The Gaudi AI product’s poor performance suggests the company must enhance its focus on parallel processing capabilities, which GPUs excel at, in order to reclaim relevancy in a swiftly evolving market.
  • 📉 Historic Loss Dynamics: The largest recorded loss in Intel’s 56-year history indicates a significant erosion of shareholder confidence and brand strength. Such losses can lead to diminished investment in R&D and innovation, further perpetuating a cycle of decline.
  • 🎯 Leadership Changes Reflect Institutional Issues: The shift from Pat Gelsinger to Lip-Bu Tan as CEO points to deeper institutional challenges within Intel. Leadership changes often signify not just new strategic directions but also the extent of turmoil that may prevent quick recoveries.
  • 🚀 Long-Term Investment Risks: The ambitious plans for new manufacturing facilities come with great risks, especially regarding technological competitiveness. Uncertain investor patience could lead to further financial instability if the promised returns on these investments do not materialize within expected time frames.

Overall, Intel’s current standing in the semiconductor landscape reflects a culmination of past decisions, technological stagnations, and strategic miscalculations. The path forward for the company will likely require a reevaluation of its core competencies and a multifaceted approach to restoring its competitive edge in both manufacturing and design.

Are Legal Aid Sites Exploiting Vulnerable Clients?

Are Legal Aid Sites Exploiting Vulnerable Clients?

Legal aid organizations are often portrayed as lifelines for individuals who cannot afford legal representation. They promise access to justice, fairness, and support for marginalized communities. But behind this noble veneer, a troubling pattern has emerged: many legal aid websites and services operate as bait and switch schemes, prioritizing profit for attorneys over genuine assistance for those in need. Let’s unpack this controversial issue and explore why skepticism toward some legal aid platforms may be warranted.

The Promise vs. The Reality

Legal aid sites market themselves as advocates for the underprivileged, offering free consultations, pro bono services, or low-cost legal help. Yet, for many users, the experience unfolds differently:

  • Bait: Attractive promises like “free case reviews” or “no upfront fees” draw in desperate individuals.
  • Switch: Once engaged, clients face pressure to pay retainers, upgrade to “premium” services, or are shuffled to private attorneys with steep hourly rates.

This tactic preys on vulnerable populations—low-income families, immigrants, or victims of discrimination—who lack the resources to navigate complex legal systems independently.

How the Bait and Switch Works

  1. Misleading Advertising
    Many sites use emotionally charged language (“Get the compensation you deserve!”) or guarantees (“100% success rate!”) to attract clicks. Buried in fine print, however, are disclaimers that services are “contingent on case details” or require payment after initial contact.
  2. The “Free Consultation” Trap
    A free consultation often serves as a sales pitch. Attorneys may spend minimal time assessing the case before pushing for paid representation, even if the client’s chances of success are slim.
  3. Aggressive Upselling
    Clients seeking straightforward help (e.g., drafting a will or fighting an eviction) are funneled into costly litigation strategies or unnecessary services.
  4. Referral Kickbacks
    Some platforms monetize user data by selling leads to law firms. Clients expecting nonprofit support are instead handed off to attorneys who prioritize profit margins over justice.

Why Does This Happen?

  • Underfunded Systems: Legitimate legal aid nonprofits often struggle with funding, creating gaps that opportunistic actors exploit.
  • Lack of Oversight: Many online legal platforms operate in regulatory gray areas, avoiding scrutiny by classifying themselves as “matching services” rather than legal providers.
  • Profit Motive: For attorneys, low-income clients may be seen as easy targets for volume-driven cases (e.g., personal injury, bankruptcy) where settlements are prioritized over client outcomes.

Red Flags to Watch For

Not all legal aid organizations are unethical, but these warning signs should prompt caution:

  • Vague Fee Structures: Hidden costs revealed only after commitment.
  • No Clear Nonprofit Status: Legitimate aid groups are transparent about funding (e.g., grants, donations).
  • High-Pressure Tactics: Urgency to sign contracts or pay fees immediately.
  • Lack of Transparency: Refusal to provide attorney credentials or success metrics.

The Cost of Exploitation

When legal aid becomes a profit-driven hustle, the consequences are severe:

  • Erosion of Trust: Vulnerable communities grow disillusioned with the justice system.
  • Worsened Inequities: Those already facing systemic barriers are further marginalized.
  • Ethical Decay: The legal profession’s reputation suffers when attorneys prioritize revenue over duty.

How to Find Legitimate Help

  1. Verify Nonprofit Status: Use tools like Guidestar or the IRS Tax-Exempt Organization Search to confirm legitimacy.
  2. Seek Local Recommendations: Community organizations, libraries, or bar associations often vet reputable services.
  3. Ask Direct Questions: “Is this service free?” “What percentage of your clients pay fees?”
  4. Report Predatory Practices: File complaints with state bar associations or the FTC.

Conclusion: Demand Accountability

While many legal aid attorneys and organizations do heroic work, the industry’s darker corners must be exposed. Clients deserve transparency—not empty promises designed to line pockets. By calling out bait-and-switch tactics and advocating for stronger oversight, we can realign legal aid with its original mission: justice for all, not just those who can pay.

What’s your experience with legal aid services? Share your story in the comments.

Challenge Your Lender… Now!

Don’t delay – Opt in to the follow Blog and gain access to over 680 ideas and posts to hold your Lender accountable new post every day!

Do you want to hold your lender responsible for their illegal actions?

Challenge Your Lender… Now!

image003

My name is Timothy McCandless, and I’m here to tell you what most banks and mortgage loan servicers don’t want you to know: More than 65 million homes in the US may not be subject to foreclosure after all, and your home is very likely one of the “safe” homes. The reason these homes are not technically subject to foreclosure is because the lenders, mortgage companies, mortgage servicers, and title companies broke the law throughout the process of managing your loan, both at the inception of your loan and throughout the life of the loan. Because of their fraudulent actions, they are unable to produce a title for, or show ownership of, your property. This causes what we call a “defect of title”, and legally prohibits your lender or servicer from foreclosing, regardless of whether or not your loan is current.

This situation is all over the news, and now, starting today, you can learn how to protect yourself from unlawful foreclosure.

WE CAN TRAIN YOU HOW TO CHALLENGE YOUR LENDER

Most Mortgage Assignments are Illegal

In a major ruling in the Massachusetts Supreme Court today, US Bank National Association and Wells Fargo lost the “Ibanez case”, meaning that they don’t have standing to foreclose due to improper mortgage assignment. The ruling is likely to send shock waves through the entire judicial system, and seriously raise the stakes on foreclosure fraud. Bank stocks plummeted after this ruling. These assignments are what people need to challenge in their own mortgages.

I am prepared to show you the most amazing information on how you can actually Challenge Your Lender. Once you opt in for our free ebook (just enter your email address above and to the right), you’ll get immediate access to our first, very informative webinar, as well as to our free ebook. You’ll learn more about the Challenge Your Lender program, and more importantly, how the US mortgage system is rigged to take advantage of you and how to can fight back. My program will show you exactly how to get a copy of your loan documents that your lender or loan servicer currently has in their possession, and then how to begin examining these documents to learn more about how your lender, as well as other parties involved, has used your name and credit to make millions of dollars. Analyzing your loan documents is a crucial first step in beginning the Challenge Your Lender process.


Save your home from foreclosure

The information that you will be receiving in my free material and webinar will further your knowledge on what most lenders are doing to homeowners, and how you can save yourself from foreclosure. You will have the opportunity to acquire a free copy of my Challenge Your Lender workbook and learn how to begin building the paper trail that you will need to defend yourself and to prove the wrongdoings of your lender and loan servicer. Once you go through the workbook and listen in on the free webinar, you will be on top of your Challenge and ready to begin the program.

The Challenge Your Lender program will help put you in a position of power and control over your loan, and will allow you to decide what you would like to do with your property. This leverage will be advantageous when you begin negotiating your foreclosure. Most importantly, your lender or loan servicer should not be able to foreclose on you once you notify them that you have identified fraudulent activity. My program is your first step in saving your property from foreclosure.

Don’t wait – opt in today. Every day counts in the battle against your lender.

Best regards,
Tim

Related articles

The lawyer is not competend to testify

If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

So you sent a QWR and you know the loan is securitized. The orignating lender says talk to the servicer and the servicer declines to answer all the questions because they didn’t originate the loan. Or you are in court and the lawyer is trying to finesse his way past basic rules of evidence and due process by making representations to the Judge as an officer of the court.

He’s lying of course and if you let it go unchallenged, you will lose the case. Basically opposing counsel is saying “trust me Judge I wouldn’t say it if it wasn’t so.” And your answer is that the lawyer is not a witness, that you don’t trust the lawyer or what he has to say, that if he is a witness he should be sworn in and subject to cross examaintion and if he is not a witness you are entitled to be confronted with a real witness with real testimony based upon real knowledge.

First Questions: When did you first learn of this case? What personal knowledge do you have concerning the payments received from the homeowner or third parties? What personal knowledge do you have as to who providing the actual cash from which the subject loan was funded?

Only when pressed relentlessly by the homeowner, the servicer comes up with a more and more restrictive answer as to what role they play. But they always start with don’t worry about a thing we control everything. Not true. Then later after you thought you worked out a modification they tell the deal is off because the investor declined. The investor is and always was the lender. That is the bottom line and any representation to the contrary is a lie and a fraud upon the court.

So whoever you sent the QWR to, always disclaims your right to ask, or tells you the name of the investor (i.e., your lender) is confidential, or that they have authority (but they won’t show it to you). That doesn’t seem to be a lender, does it? In fact they disclaim even knowing enough to answer your questions.

So AFTER THEY SERVE YOU with something file a motion to compel an immediate full answer to your QWR since under TILA service on the servicer is the same as service on the lender. You argue that everyone seems to be claiming rights to be paid under the original obligation, everyone seems to be claiming the right to enforce the note and mortgage, but nobody is willing to state unequivocally that they are the lender.

You are stuck in the position of being unable to seek modification under federal and State rules, unable to sell the property because you don’t know who can sign a satisfaction of mortgage or a release and reconveyance, unable to do a short-sale, and unable to refinance — all because they won’t give a simple answer to a simple question: who is the lender and what is the balance claimed by the real lender on the obligation? At this point you don’t even know that any of the real lenders wish to make a claim.

This is probably because they received TARP funds and insurance proceeds on defaults of pools that they had purchased multiple insurance policies (credit default swaps). But whether they are paid by someone who acquired rights of subrogation or they were not paid, you have a right to a FULL accounting and to know who they are and whether they received any third party money. If they were paid in part or otherwise sold their interest, then you have multiple additional unknown parties.

The reason is simple. They are not the lender and they know it. The lender is a group of investors who funded the transaction with Petitioner/Homeowner and others who purchased similar financial products from the same group of participants in the securitization chain relating to the subject loan.

The people currently in court do not include all the real parties in interest for you to make claims against the lender. Cite to the Massachusetts case where Wells Fargo and its lawyer were subject to an $850,000 sanction for misrepresenting its status to the court.

It is not enough for them to bluff their way by saying that they have already answered the interrogatories. When they lost and it came time to allocate damages and attorneys fees, Wells suddenly said they were NOT the lender, beneficiary or current holder and that therefore the damages and attorneys fees should be assessed against the real lender — who was not a party to the pending litigation and whom they refused to disclose along with their misrepresentation that they were the true lender.

It is not enough that the lawyer makes a representation to the court as an officer of the court. That is not how evidence works. If the lawyer wants to represent facts, then he/she should be sworn in and be subject to (1) voir dire to establish that he/she is opposing counsel that it came from some company.

The witness must be a competent witness who takes an oath, has personal knowledge regarding the content of the document, states that personal knowledge and whose testimony conforms to what is on the document.

There is no such thing as foundation without a witness. There is no such thing as foundation without a competent witness. So if the lawyer tries to finesse the subject by making blanket representations to the court(e.g. the property is “underwater” by $xxx,xxx and we need a lift of stay…yet, there is no certified appraisal entered into evidence with a certified appraiser that can be cross examined…just a statement from opposing counsel) point to Wells, or even point to other inconsistencies between what counsel has represented and what now appears to be the truth, and demand an evidentiary hearing. If the lawyer is not a competent witness with personal knowledge, then he should shut up and sit down.

File a motion to extend time to file adversary proceeding(in BK situation), answer, affirmative defenses and counterclaim UNTIL YOU GET A FULL AND COMPLETE ANSWER TO YOUR QWR so you can determine the real parties in interest and serve them with process. Otherwise, we will have a partial result wherein the real owner of the loan can and will claim damages and injunctive relief probably against all the current parties to this action including the Homeowner.

In short, the opposing counsel cannot just make statements of “fact” and have them accepted by the court as “fact” if they don’t pass the sniff test of real evidence corroborated by a competent witness. …and with every pleading ask for an evidentiary hearing and attorneys fees. Follow rule 11 procedure in Federal Court or the state law counterpart so you can get them later.

Usury is comming back as a viable cause of action

Loans
Loans (Photo credit: zingbot)

USURY: The trial court improperly granted a motion for summary judgment on the basis that the loan was exempt from the usury law.

1. The common law exception to the usury law known as the “interest contingency rule” provides that interest that exceeds the legal maximum is not usurious when its payment is subject to a contingency so that the lender’s profit is wholly or partially put in hazard. The hazard in question must be something over and above the risk which exists with all loans – that the borrower will be unable to pay.
2. The court held that the interest contingency rule did not apply to additional interest based on a percentage of the sale price of completed condominium units because the lender was guaranteed additional interest regardless of whether the project generated rents or profits.
3. The loan did not qualify as a shared appreciation loan, permitted under Civil Code Sections 1917-1917.006, because the note guaranteed the additional interest regardless of whether the property appreciated in value or whether the project generated profits.
4. The usury defense may not be waived by guarantor of a loan. (No other published case has addressed this issue.)wri_opportunityloans_v_cooper

Charged minorities thousands of dollars more Hispanic’s borrower charges 55% more

GreenPoint Brokers Targeted by New York
HCI Mortgage, Consumer One Mortgage settle with attorney general
January 5, 2009

Two New York mortgage brokers have settled charges that they charged minorities thousands of dollars more in fees, while a third broker faces a lawsuit by the state and more brokers face investigations. The actions were prompted by an investigation into defunct wholesaler GreenPoint Mortgage Funding Inc.
HCI Mortgage and Consumer One Mortgage have entered an agreement with New York’s attorney general, a press release today said. Between the two companies, there are more than 20 branches throughout the state.
The two brokers will pay $665,000 in restitution to around 455 black and Hispanic borrowers, according to the announcement. The also agreed to establish a standard fee schedule, monitor pricing to minorities and report lending details to the state.
Both brokers are accused of charging minorities higher fees than similarly-situated White borrowers.
The attorney general conducted an investigation with the New York State Department of Banking into discriminatory practices by mortgage brokers. The investigation was triggered by the state’s investigation into GreenPoint Mortgage Funding Inc. after it found that Home Mortgage Disclosure Act data indicated discrimination had occurred on GreenPoint mortgages. GreenPoint, which was shut down by parent Capital One in August 2007, settled the charges in July for $1 million.
Statistical analyses conducted on loans originated by HCI found that black borrowers were charged around 46 percent more than similarly situated whites, which worked out to around $2,260. Hispanic borrowers saw fees that were an average of 55 percent higher, which worked out to $2,280.
“These customers were charged significantly higher fees for no reason other than being a minority — something that is explicitly against the law in New York State,” Attorney General Andrew Cuomo said in the statement.
In addition, the attorney general has filed a lawsuit in federal district court against U.S. Capital Funding LLC. A state investigation also found discriminatory practices at U.S. Capital, but the company refused to provide restitution to more than 100 minority borrowers — prompting the lawsuit by the attorney general.
U.S. Capital reportedly brokered 300 loans between January 2006 and July 2007, including around 100 mortgages for black and Hispanic borrowers. Minorities were allegedly charged 58 percent more than whites, costing them an average of $3,500 each.
“HCI Mortgage, Consumer One, and U.S. Capital Funding all did substantial business with GreenPoint,” the statement said. “The office is continuing its investigation into potential discriminatory pricing by other mortgage brokers.