The process of determining back pay amounts

| Aug 24, 2018 | Firm News, wage and hour |

Sometimes, employers in California refuse to pay their workers. The reasons for this range from the personal to the financial, but the law rarely accepts a company’s decision to withhold pay without a very convincing argument in favor of the action. However, since employers are seldom willing to distribute money they have decided to keep, one should expect to expend some resources in the pursuit of compensation.

It is very often in an employee’s favor to make an attempt to reclaim unpaid wages. In addition to the principal sum, the state mandates that companies pay interest on the money they have withheld. This is equitable, but interest is rarely a large amount, as the statute of limitations on wage and hour actions is relatively short — four years, to be exact.

Interest, which the state would handle, could be difficult to calculate. It might be easier to determine overtime, however. The State of California Department of Industrial Relations lists the current rules governing overtime pay:

  • Double pay after 12 hours in a day, or after eight hours on the seventh consecutive day in a week
  • Time-and-a-half pay for the first eight hours on the seventh consecutive day, and also for any time between eighth and twelfth hours on a single day

For those interested in calculating the entirety of overtime and back pay a company might owe them, the online personal finance publication PocketSense has a brief guide on how to do so in the context of California labor law. However, the simplicity of the process as it is described belies the time one might spend poring over records in order to reach a reliable estimate.

Four years, the time limit on wage and hour claims, is a relatively long time in terms of calculating back pay. For those who were constantly employed, the period would likely represent 96 paychecks and 208 weekly schedules. Some of these, as mentioned in the PocketSense article, might require the application of a weighted average wage before any calculation of overtime.