California Labor Code 1194 entitles employees who receive less than legal minimum wage or legal overtime pay to sue their employer for back pay plus interest, reasonable attorney’s fees, and court costs. But employees who signed an employment contract with a valid arbitration clause may have to rely on arbitration to pursue their unpaid wages.
The full text of the statute reads as follows:
1194. (a) Notwithstanding any agreement to work for a lesser wage, any employee receiving less than the legal minimum wage or the legal overtime compensation applicable to the employee is entitled to recover in a civil action the unpaid balance of the full amount of this minimum wage or overtime compensation, including interest thereon, reasonable attorney’s fees, and costs of suit.
(b) The amendments made to this section by Chapter 825 of the Statutes of 1991 shall apply only to civil actions commenced on or after January 1, 1992.
California labor law guarantees that non-exempt employees get paid at least minimum wage for all hours worked plus overtime (if applicable). Currently in California, minimum wage is:
- $13 an hour at companies with 25 or fewer employees (overtime pay is $19.50 an hour); or
- $14 an hour at companies with 26 or more employees. (overtime pay is $21 an hour).1
If an employer pays an employee less than minimum wage or OT rates, then California Labor Code 1194 permits the employee to sue the employer for the following damages:
- all unpaid wages and overtime, plus interest;
- reasonable attorney’s fees; and
- court costs (such as filing costs, etc.)2
However, some employers have their workers sign a contract agreeing to submit to arbitration for settling wage disputes. So unless the arbitration clause of the contract turns out to be unenforceable, these employees would be unable to sue.3
If an employer fails to pay multiple employees minimum wage, the employees can consider banding together and bringing a wage and hour class action against the employer.4 Class actions can be advantageous because the employees (“class members”) share the cost of attorney’s fees, and employers are often more willing to settle when they are facing a class action.
- See California Department of Industrial Relations, Minimum Wage.
- California Labor Code 1194 – Recovery by employee of unpaid balance of full amount of minimum wage or overtime compensation. Moreno v. Bassi (Cal. App. 5th Dist. June 8, 2021), 65 Cal. App. 5th 244. Cruz v. Fusion Buffet, Inc. (Cal. App. 4th Dist., 2020), 271 Cal. Rptr. 3d 269, 57 Cal. App. 5th 221.
- Ajamian v. CantorCO2e, L.P. (Cal. App. 1st Dist. Feb. 16, 2012), 203 Cal. App. 4th 771, 137 Cal. Rptr. 3d 773.
- Jaimez v. Daiohs USA, Inc. (Cal. App. 2d Dist., 2010), 181 Cal. App. 4th 1286, 105 Cal. Rptr. 3d 443.