Just about every employer in California, big or small, will encounter the state’s dreaded Labor Commission. Also known as the Division of Labor Standards Enforcement (DLSE), it was established to adjudicate wage claims, investigate discrimination and public works complaints, and enforce Labor Code statutes and Industrial Welfare Commission orders. Therefore any current or past employee that has a potential claim against his or her employer can easily file a claim with the DLSE and have their complaint heard in front of a mediator and/or commissioner.
Often when an employee feels mistreated, the DLSE will lend an ear. Generally the office awards money damages for violations. That is, the office will award unpaid wages, damages based on discrimination and/or penalties based on an employer’s proven wrongdoing.
The first step is the conference. A few months after a worker submits a claim, the parties will receive written notice of a conference where both parties meet in person at a DLSE office. The worker starts by explaining the reasons the claim was filed and the employer gives its defense. The hearing officer will then attempt to have the parties come to a settlement resolution. If the parties cannot come to a resolution, a hearing is set.
The second step is the hearing. A hearing is much like a “mini-trial” and is usually scheduled a few months after the conference. The rules of evidence are relaxed, and it takes place in a conference room rather than a courthouse. Nonetheless, it is important to prepare for the hearing much like you would if you were testifying in front of a judge, as the commissioner will record the entire hearing and base his or her decision on whether the plaintiff successfully met the burden as applied to the applicable labor code.
I like to prepare several sets of exhibits – one for each party and one for the commissioner. It is very important that you start from the beginning and discuss all material facts that support your claim or defense. A little advice for either side is to be honest and concise, make sure to address not only your strongest arguments but also negative facts. You should plan in advance how to argue that any negative facts are not applicable or are not as important as they seem. If you do not address them first, the other side will and the commissioner may think you have something to hide.
If you are the claimant, you must pay extra attention to the damages portion of your claim – and if you are the employer, you likewise will want to focus on dismantling the damages claim. According to Labor Code Section 203, a penalty may be assessed against an employer that willfully fails to pay wages at the conclusion of an employment relationship. The penalty is calculated by multiplying the worker’s daily rate by the number of days the employee is not paid – up to 30 days. Employers need to show that there was a good faith dispute as to payment to avoid the penalty. This can be done through documenting why the worker was not due the wages they were claiming. Penalties can add up quickly, and can often double or triple the value of a plaintiff’s claim.
Remember that throughout the process and anytime before the commissioner renders a decision, the parties may work toward a resolution. Often times a settlement before a decision will benefit both sides, alleviating the need for a third party to decide the case’s fate.
