Seyfarth Synopsis: The DLSE enforces California labor laws. In two recent enforcement actions, the DLSE collectively recovered over one million dollars, so California employers should read on to find out more about this robust administrative agency.

What Is The DLSE And Why Should Employers Care?

The California Division of Labor Standards Enforcement (aka the DLSE or the Labor Commissioner’s Office) is a recurring character in our blog. Usually we discuss new guidance the DLSE has offered. But the DLSE serves another function as well: it enforces the statutory provisions governing wages, hours, and working conditions of employees, and enforces the wage orders promulgated by the Industrial Welfare Commission. The DLSE’s mission is to “ensure a just day’s pay in every workplace in the State and to promote economic justice through robust enforcement of labor laws.”

To carry out its mission, the DLSE has free access to “all places of labor.” The Labor Commissioner can issue subpoenas to compel the attendance of witnesses and parties or the production of books, papers, and other records. And if employers do not comply with the subpoena, the DLSE can go to court to force compliance. In a nutshell, the DLSE has broad authority to inspect workplaces for wage and hour violations, investigate retaliation complaints, adjudicate wage claims, and prosecute actions on behalf of employees in civil court.

So How Does That Work?

The DLSE executes its mission through various mechanisms. During the 2015-16 fiscal year, the DLSE inspected over 2,400 worksites and issued citations for 2,100 violations. Most citations were for failure to carry workers comp insurance or to issue an itemized wage statement. The inspections led to over $18 million in penalties.

The DLSE also conducts payroll audits, to identify wage violations based on misclassification of employees or misreporting of time. Last year DLSE audits resulted in over $25 million in wage and civil penalty assessments.

What Are The DLSE’s Priorities?

Given the breadth of the DLSE’s authority, and the number of penalties assesses, it has a wide array of enforcement priorities. We focus here on cases that the Labor Commissioner has deemed significant enough to highlight on the DLSE website.

On June 27, 2017, the DLSE announced it recovered over $48,000 in back wages for a convenience store clerk after the DLSE hearing officer found the clerk was owed minimum wage and premium pay for overtime work. The clerk, acting without an attorney, filed a wage claim in March to seek $14,520 in unpaid regular wages. The hearing officer, finding the clerk was actually owed much more, awarded him $42,980—$22,162 in regular and overtime wages, $14,707 in liquidated damages, $3,586 in interest, and $2,524 in waiting time penalties. The Labor Commissioner noted: “This case shows that when workers exercise their labor rights and come forward to report wage theft, they can do so on their own without an attorney, they can receive the wages they are owed, and in some cases even more.”

The DLSE has also recently defended a judgment it won for five truck drivers on the basis that they had been misclassified as independent contractors and were entitled to reimbursement for expenses and unlawful deductions. The defendant appealed the administrative award, arguing that the Labor Commissioner lacked authority because the claim was preempted by the Federal Aviation Administration Authorization Act. The trial court rejected that argument and found all five drivers were misclassified as independent contractors. The judgment in their favor was for $958,660 plus attorney’s fees and costs.

These cases highlight a few important reminders:

  • An employee does not need an attorney to prosecute claims for wage and hour violations.
  • The DLSE focuses on adjudicating wage and hour claims and is not afraid to pursue these claims in court.
  • California employers should ensure their wage and hour practices remain compliant and that any potential misclassification issues are properly reviewed—or risk judgment by the DLSE and the payment of attorney’s fees and costs if an adverse ruling is appealed and the DLSE succeeds in court.