California has strict laws and regulations on how you have to pay your non-exempt employees -- more stringent than federal laws. These California wage-and-hour laws cover a wide range of requirements, including minimum wage, overtime, paid sick leave, required meal and rest breaks, payment for promised vacations or bonuses, split-shift premiums, final wages, payment for travel time, and training, unauthorized deductions, and paychecks that bounce.

Employees can file claims with the DLSE alleging that you have violated any of the wage-and-hour laws. The DLSE, with its strongly pro-employee language, calls these violations “wage theft.”

If an employee or a former employee files a wage-and-hour claim against you, that will start a multi-step process including a settlement conference, administrative hearing, and possibly an appeal in state court. You have the option of ending the process by settling with the employee at any point.

Defending a wage-and-hour claim takes time and money, even if the claim turns out to be unfounded. We can help you respond to the claim effectively and efficiently so that it does the least damage to your practice. Contact us for a free consultation to find out more.

What Is the DLSE?

The DLSE is the Division of Labor Standards Enforcement. It’s a California state agency that enforces the state’s Labor Code and wage-and-hour laws and regulations. The DLSE is also called the Labor Commissioner's Office.

The Process Favors Employees

The DLSE reveals a pro-employee slant when it states that its mission is to “ensure a just day's pay” and “promote economic justice” by “robust enforcement of labor laws.”

Various aspects of the claims process favor employees. Employers have to make a cash deposit or file a bond to appeal a DLSE hearing decision. Employees do not. Employees, but not employers, can get free legal representation if they oppose an appeal. Employers have a lower bar for what counts as losing an appeal and having to pay the employee’s costs and attorney’s fees.

You can make the DLSE claim process more even-handed by consulting an experienced employment attorney who will protect your interests throughout or at any stage of the process.

Who Can File a Claim?

Only non-exempt employees can file a wage-and-hour claim. All claims must be for wage disputes. The DLSE does not have jurisdiction over other types of employment-related claims, such as discrimination or harassment including sexual harassment.

Independent contractors are not covered by California’s wage-and-hour laws and cannot receive wage awards from the state. Sometimes an independent contractor will claim they were misclassified and should have been classified as an employee. In that situation, if the employee files a wage-and-hour claim, the DLSE may hold a hearing to determine if the worker should have been classified as an employee and, therefore, be subject to the wage-and-hour laws. We can advise you on how to defend against allegations of misclassification.

What Happens If an Employee Files a Wage-and-Hour Claim With the DLSE?

When an employee or former employee files a claim with the DLSE, that sets in motion a series of steps:

1. The DLSE investigates the claim and decides whether to pursue it. If it does:
2. There will be a settlement conference. If the claim does not settle at this stage:
3. There will be a hearing.
4. The hearing officer will issue a decision.
5. After the decision, either side can file an appeal.
6. The case then moves to the state Superior Court.

The labor and employment lawyers at Dental & Medical Counsel are available to assist you at any or all stages of the process, whether you need advice, representation, or both.

DLSE Initial Investigation

An employee or former employee will start the process by filing a claim form with the DLSE. They may include documentation, if they have it, with the form. The employee has up to three years to allege violations of their rights to overtime pay, minimum wage, rest and meal break pay, and sick leave. The DLSE will investigate the claim form and documents, if any, and determine whether to proceed.

The DLSE will notify you of the claim by sending you a Notice of Claim and Conference. You can respond to the claim but are not required to. However, you or a representative are required to appear at the settlement conference on the assigned date. If you don’t appear, the case will be set for a hearing.

The Settlement Conference

If the DLSE decides to go ahead with the claim, it will usually schedule a settlement conference. This is not the hearing. At the conference, a deputy labor commissioner will discuss the employee’s allegations and your responses and will try to mediate an agreement. If you and the employee reach a settlement agreement, then the claim will be closed when you pay the employee the agreed-upon amount.

To prepare for the settlement conference, you should:

• Review the information you received from the DLSE to make sure you bring all the required documentation to the conference.
• Be prepared with evidence and documents that support your defenses to the employee’s claims.

Upon preparation, we advise you that you work with an employment attorney on what to do at the settlement conference. An attorney can:

• Help you understand the employee’s claims.
• Identify the strengths and weaknesses of the claims.
• Advise you on whether you should try to settle the claim.
• Advise you on what would be an appropriate range of settlement amounts that you should aim for.

Additionally, an attorney can accompany you to the settlement conference and help you with the negotiations. You are not required to have an attorney with you, but you may choose to, especially if you are unsure if you know enough about the state’s employment laws and regulations to determine and articulate persuasive defenses.

Another option is to go to the settlement conference without an attorney but then, if the claim doesn’t settle, have an attorney represent you at the hearing. The hearing is a more formal process and, unlike the settlement conference, is legally binding.

Should You Settle the Wage Claim?

In some situations, your best option will be to settle the claim, either for the amount the employee is claiming or for some other agreed-upon amount. From there, an attorney can:

• Advise you on whether it would be in your best interest to settle and, if so, for how much.
• Negotiate the payment terms.
• Draft a settlement agreement that will protect your interests.

The Hearing

If you and the employee don’t agree to settle, the claim moves on to the hearing stage. The hearing is an administrative procedure, not a trial. The setting may be more informal than a courtroom, but the decision of the hearing officer is legally binding unless there is an appeal. In the hearing:

• Testimony is taken under oath.
• The proceedings are recorded.
• You and the employee have the right to be represented by an attorney.
• You and the employee can present evidence, testify, present witnesses, cross-examine the other party and their witnesses, explain your evidence, and rebut the other side’s evidence.

To get ready for the hearing, you should prepare:

• Direct and cross-examination questions.
• Exhibits consisting of documents that support your defenses, such as written policies and time records.
• Any witnesses that you bring, such as the employee’s managers or co-workers.

The hearing officer will issue their decision 15 days after the hearing and notify you and the employee by mail.

Lastly, it is important to have an attorney represent you at the hearing and/or to advise and prepare you by:

• Advising what documents will support your defense.
• Preparing the evidence.
• Determining if you need witnesses.

The Appeal

You and the employee both have the right to appeal the decision, but you must do it quickly. You will usually have 15 days from the decision’s certification of service by mail to file the appeal.

If there is an appeal, the case leaves the DLSE administrative process and goes to your local Superior Court. We strongly suggest that you consult with an attorney at this stage if you haven’t already.

Contact Dental & Medical Counsel at Any Stage of the DLSE Claim Process

If you have a dental, medical, optometry, or veterinary practice in California, you need to know how to defend your practice when an employee files a DLSE claim. California wage-and-hour laws and regulations are wide-reaching and complex, and you may have questions about whether or not the employee’s claim has any legitimacy.

We can help you determine the strength of the employee’s claim and whether you should fight the claim, negotiate a lower amount, or pay the full amount of the claim. We can assist in choosing and preparing the documents and witnesses that will build a persuasive case. We can represent you at the settlement conference, hearing, and/or appeal.

Find out more about how we can help by contacting our office and scheduling a complimentary consultation with our lead attorney, Ali Oromchian.