Tag: labor

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

Comprehensive Directory of Workers’ Rights Resources in California

State Agencies & Government Resources

California Department of Industrial Relations (DIR): Oversees wage, hour, safety, and compensation standards.  [Website](https://www.dir.ca.gov/)

Labor Commissioner’s Office (DLSE): Enforces wage and working condition laws.  [Website](https://www.dir.ca.gov/dlse/)

California Civil Rights Department (CRD): Handles discrimination, harassment, and retaliation protections.  [Website](https://calcivilrights.ca.gov/)

California Labor & Workforce Development Agency (LWDA): Coordinates DIR, EDD, Cal/OSHA.  [Website](https://www.labor.ca.gov/)

Agricultural Community-Based Organizations: Farmworker support groups listed by DIR.  [Website](https://www.dir.ca.gov/dlse/Agriculture-Community-Based-Organization-List.htm)

USA.gov Worker Protection Overview: Federal portal for workplace laws.  [Website](https://www.usa.gov/labor-laws)

Legal Aid & Advocacy Organizations

California Rural Legal Assistance (CRLA): Supports low-income and farmworkers.  [Website](https://www.crla.org/)

Legal Aid at Work: Employment law clinics and helplines.  [Website](https://legalaidatwork.org/)

Bet Tzedek Legal Services: Wage theft and unsafe conditions support.  [Website](https://www.bettzedek.org/)

Employee Rights Center (San Diego): Local legal aid for disadvantaged workers.  [Website](https://weberc.net/)

Equal Rights Advocates: Gender justice, fair pay, harassment.  [Website](https://www.equalrights.org/)

Worksafe: Focus on workplace health and safety.  [Website](https://worksafe.org/)

Community-Based Worker Centers

Los Angeles Worker Center Network (LAWCN): Coalition of immigrant worker centers.  [Website](https://laworkercenternetwork.org/)

La Raza Centro Legal: Workers’ Rights Program in San Francisco.  [Website](https://www.lrcl.org/workers-rights)

Koreatown Immigrant Workers Alliance (KIWA): Immigrant labor advocacy in LA.  [Website](https://kiwa.org/)

Warehouse Workers United: Warehouse advocacy in Inland Empire.  [Website](https://warehouseworkers.org/)

Los Angeles Black Worker Center (LABWC): Black worker equity and union access.  [Website](https://lablackworkercenter.org/)

Bay Area Worker Centers: Includes La Colectiva, Filipino Advocates, etc.  [Website](https://calaborlab.ucsf.edu/tackling-workplace-challenges-resources-bay-area-workers)

Civil Rights & Identity-Based Advocacy

Asian Law Caucus: Free legal counseling for immigrant workers.  [Website](https://www.advancingjustice-alc.org/)

Asian Americans Advancing Justice – Southern California: Legal aid and advocacy for API communities.  [Website](https://www.ajsocal.org/)

Out & Equal Workplace Advocates: LGBTQ workplace equality.  [Website](https://outandequal.org/)

Center on Race, Poverty & the Environment (CRPE): Environmental justice and worker rights.  [Website](https://crpe-ej.org/)

Farmworker-Specific Organizations

United Farm Workers (UFW) Foundation: Farmworker legal and community support.  [Website](https://ufwfoundation.org/)

California Farmworker Foundation (CFF): Education and scholarships for farmworkers.  [Website](https://californiafarmworkers.org/)

Worker Advocacy Networks & Coalitions

California Coalition for Worker Power (CCWP): Coalition of worker centers and unions.  [Website](https://www.californiaworkerpower.org/)

National Day Laborer Organizing Network (NDLON): Day laborer rights organizing.  [Website](https://ndlon.org/)

California Strategic Enforcement Partnership: Collaboration to fight wage theft.  [Website](https://s27147.pcdn.co/app/uploads/2018/11/CA-Enforcement-Document-Letter-11-27-18-1.pdf)AFL-CIO California Constituency Groups: Labor advocacy for retirees, LGBTQ, youth.  [Website](https://calaborfed.org/constituency-groups-allied-organizations-and-part

California’s Hidden Workforce Crisis:

Home Care Workers Are Being Exploited—Now’s the Time to Fight Back

Every day in California, home care workers—mostly immigrant women—quietly perform some of the hardest and most vital labor in our state. They care for our elderly, our disabled, and our most vulnerable. And yet, many of these workers are underpaid, overworked, and unlawfully denied their rights.

🚨 Real Cases. Real Exploitation.

  • Sacramento Region (2024):
    The California Labor Commissioner fined four residential care providers $860,000 for wage theft and illegal labor practices affecting 58 home care workers. These companies failed to pay minimum wage, overtime, and denied lawful meal and rest breaks.
  • Los Angeles County:
    Employers forced home care workers to work 24-hour shifts while only paying them for a fraction of that time—violating California labor law and robbing workers of sleep, health, and dignity.
  • Statewide Pattern:
    Many agencies misclassify home care workers as “independent contractors” to avoid paying workers’ compensation, unemployment insurance, and taxes. This practice not only cheats workers—it puts public health and safety at risk.

⚖️ WRCA Is Fighting Back

The Workers Rights Compliance Alliance (WRCA) is a California nonprofit formed to expose and challenge employers who exploit workers through misclassification, wage theft, and labor fraud. We are building a statewide coalition to hold abusive employers accountable—and we want you to be part of it.

💥 Why This Matters

  • Without fair pay and legal protections, California’s care economy collapses on the backs of immigrant women—many of whom suffer in silence.
  • The cost of exploitation is passed on to all of us: Medicaid fraud, public health risks, and increased poverty among caregivers.
  • Unscrupulous employers are getting rich while cheating the system and abusing the very people who care for our loved ones.

✊ Join the Fight

WRCA is calling on:

  • Home care workers who’ve been mistreated—your voice matters.
  • Allies and advocates who want to help protect this essential workforce.
  • Lawyers, unions, and healthcare professionals who want to end the culture of silence.

📝 Become a Free Member Today

By joining WRCA, you’ll gain access to:

  • Legal support and case review
  • Advocacy campaigns and public exposure
  • Community forums and educational resources
  • Opportunities to take part in lawsuits against abusive employers

👉 Join WRCA for free at WorkersRightsComplianceAlliance.com

Let’s end the exploitation of home care workers in California—because dignity is not optional, and justice cannot wait.

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

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).