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Can I Receive Interest on Unpaid Wages?

Posted by Eric Kingsley | Feb 12, 2023 | 0 Comments

If you believe your employer has violated wage and hour laws, you may be owed unpaid wages. These are essentially wages your employer should have paid you for work you did and not paying them is a violation of federal and state labor laws. You are also eligible to receive interest for the money that is owed to you in unpaid wages – up to 10% per year. If you are owed back pay and wages, you can recover them by filing a wage and hour lawsuit against your employer.

What Constitutes Unpaid Wages?

Unpaid wages refers to the amount of money that is owed to employees for work that they complete, but do not receive compensation for from their employer. Unpaid wages generally relate to violations of wage and hour laws. They often involve the following types of violations:

Minimum wage: This is when employers fail to pay workers the legal minimum wage. It is against the law for California employers to pay workers less than the minimum wage. In 2023, the statewide minimum wage in California is $15.50 per hour. There are counties and cities in the state, however, which have a higher rate than the state minimum. So, if you work in a city or county with a higher minimum wage, the law requires your employer to pay the higher local rate.

Overtime pay: California overtime law requires employers to pay non-exempt or hourly workers overtime pay for any work they do over the maximum number of hours of work. Non-exempt workers are entitled to overtime pay if they work more than eight hours in a single workday, more than 40 hours in a single workweek or more than six days in a single workweek.

When employees work overtime, they are entitled to receive minimum overtime pay at one-and-a-half the times their regular hourly pay rate. In addition, when they work more than 12 hours in one workday or over eight hours on the seventh day of a workweek, they are entitled to double the regular hourly rate of pay. Employers owe employees overtime pay even if they did not require it. Just the fact that the employer allowed the employee to perform the additional work requires them to pay overtime wages.

Meal and Rest Breaks: Non-exempt employees are entitled to a 30-minute meal break if they work more than five hours in a day. Employees who work more than 10 hours in a day are entitled to a second 30-minute meal break. Also under state law, hourly workers are entitled to a 10-minute rest period for each four-hour period worked in a day.

Off-the-clock work: California law prohibits employers from requiring employees to work off the clock without proper compensation. Examples of off-the-clock work include work before or after the employee's shifts, completing administrative duties such as paperwork, being on call during time off, etc. Work done off the clock must be compensated at the worker's regular hourly wage.

Other types of unpaid wages include:

  • Unpaid sick leave
  • Failure to provide employee with final paycheck
  • Misclassifying hourly employees as "exempt" or as "independent contractors" to avoid paying overtime
  • Illegal payroll deductions
  • Failure to reimburse work-related expenses

How is Interest Calculated on Unpaid Wages?

According to the California Department of Industrial Relations, Labor Code 98.1 (c) provides for interest to accrue on all unpaid wages from the date wages were due and payable at the rate of 10% per year. The "date wages were due and payable" refers to the payday when the wages were originally due.  Those looking to get compensation may want to know how to sue for unpaid wages.  To get help with your claim simply fill out the form on this page and request your free consultation.

Frequently Asked Questions

What can I do if my employer does not pay me wages due?

If you are owed unpaid wages, you may be able to recover money owed by filing a wage claim with the labor commissioner, or by filing an unpaid wages lawsuit against your employer.

How long do I have to file an unpaid wages lawsuit in California?

Under California law, the statute of limitations to file an unpaid wages lawsuit is three years from the date of the most recent violation.

How much money can I expect to get for an unpaid wages lawsuit?

The damages you can collect will depend on the law your employer violated. You may be eligible to recover interest on outstanding wages (up to 10%), back wages, attorney's fees and court costs. If your employer's labor code violation was not because of a simple mistake, you may be eligible to receive twice the damages. Liquidated damages include an amount equal to the wages you are owed in addition to interest.

Can I get fired for filing an unpaid wages lawsuit?

Your employer cannot retaliate against you for exercising your rights under California wage and hour laws. Your employer cannot take retaliatory action against including job termination, demotion, denying training opportunities, etc.

If you are owed unpaid wages, the experienced Los Angeles unpaid wage attorneys at Kingsley & Kingsley Lawyers can help you exercise your rights and explore your options. We offer a no-win-no-fee guarantee, which means you don't pay any fees unless we recover compensation for you. Call us for a free and comprehensive consultation.

About the Author

Eric Kingsley

Eric B. Kingsley is a 2023 "Best In Law" Award winner and has litigated over 150 class actions. He is also an AV peer rated attorney and a prolific speaker at various seminars on employment law.

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