Know Your Wage Order (and hang it on the wall with your new all-in-one labor poster!)
As the new year approaches, many employers purchase a new "all-in-one" employment poster with state and federal labor notices printed on a single sheet of paper. But most employers forget an important item essential to every California workplace: their wage order.
Unlike most states, California does not closely follow federal wage laws (though federal rules also apply to most employers). Instead, the state has adopted “wage orders” regulating different types of employment within the state. These orders cover overtime, work hours, child labor, reporting-time pay, recordkeeping, uniforms, meal and rest periods, and many other aspects of the employment relationship. They frequently require employers to pay more, or to provide more benefits, than federal law.
The orders also differ by industry and type of employer.
Employees working at a manufacturing facility, for example, are covered under an “industrial” wage order typically covering everyone who works in the establishment.
Employees at a workplace not covered by an “industrial” wage order are covered by “occupational” wage orders tied to particular types of jobs. For example, employees working in most office environments are considered “professional, technical or clerical employees” – and are covered by one wage order – even though non-clerical employees working for the same employer may be covered by a completely different order.
It is essential for employers to determine which wage order applies to each of their employees. The applicable wage order(s) must be posted in the workplace and – because they vary – usually are not included with publishers’ all-in-one employment posters.
More important, because the wage orders were drafted to reflect practices in specific industries and occupations, the requirements of each wage order differs from at least some of the others and may even provide flexibility. Certain agricultural employees may (for the next few years, at least) work more than eight hours a day without incurring overtime liability. Retail sales employers may not need to pay overtime where half an employee’s income comes from commissions and the employee makes at least one-and-a-half times the state minimum wage. Sheepherders must be provided “regular mail service” at least once every seven days. These rules, and many more, are drawn from individual wage orders.
And failure to follow wage order requirements have an even bigger bite under the state's Labor Code Private Attorneys General Act, which can result in a $100 - $200 per pay period penalty for every employee subject to a breach of wage order requirements. (One of our presentations discussing this can be viewed here.)
The state Division of Labor Standards Enforcement publishes a booklet – “Which Wage Order” – identifying wage orders applicable to particular types of businesses. The booklet and many other publications, such as the Division’s own enforcement manual, are online at the Labor Commissioner's website. The actual wage orders, published by the now-defunct Industrial Welfare Commission, can be viewed at this site. It is well worth most employers’ time to review the resources on these free public websites.
The state has not collected all its employment laws in one easy-to-find location. Identifying and carefully reading the wage order(s) applicable to your business is a quick and effective way to review at least some of the most important rules affecting your business, large or small.