Posted on May 8th, 2017
THE DIRTY LITTLE SECRET ABOUT THE CALIFORNIA LABOR BOARD
The California Labor Board is only in place to protect the rights of workers in California. That’s it.
There. I said it.
Now they claim they are advocating as a neutral party but any business owner that has stepped foot in a California Labor Board office will see from the videos being played in the waiting room that they are in enemy territory.
From there it only gets worse.
THREE STEPS TO INJUSTICE
STEP 1:
The first document you will likely receive as an employer if a current or former employee files a claim with the Labor Board is a Notice of Filed Claim.
This document will tell you:
- who filed the claim,
- the date they filed the claim,
- who they are filing against
- and the wrongdoing they are complaining about.
Do not be at all surprised;
- if the hours claimed to have been worked are more hours than they actually worked;
- some of the hours are on days or at times the business is not even open;
- the amount of overtime claimed is impossible using simple math;
- and the employee claims that they never received meal or rest breaks ever.
These are all labor complaints we see over and over again, made against employers.
STEP 2:
The Second document you will receive is a Notice of Claim and Conference.
This document is very important because it is the first document that sets a date and time for you the employer and the complainant to sit in front of a Deputy Commissioner to discuss the claim.
The only purpose of the Notice of Claim and Conference is to pressure you into paying the employee some money to avoid a hearing.
You didn’t do anything wrong? It doesn’t matter.
The Deputy Commissioner is going to explain to you that the deck is stacked against you and that you should pay a negotiated sum of money to avoid a large judgment that is “likely” after a hearing.
You will not be able to present evidence at the Notice of Claim and Conference and the only thing that the Deputy Commissioner will have reviewed at that time is the information submitted by the employee irrespective of how outrageous the claim may seem to you.
How can the Deputy Commissioner be a fair neutral when they have only reviewed the evidence submitted by one side you ask?
You know the answer.
The Deputy Commissioner will likely also start adding claims that the employee didn’t have on the original complaint while he interviews the employee in front of you.
Not only does this serve to intimidate you into settling but it also adds additional risk in the event you elect to have a hearing and defend yourself.
STEP 3:
If you have the audacity to refuse to pay a settlement when you know you have not done anything wrong, you will be scheduled for a hearing in front of a Labor Board Hearing Officer.
At the hearing, you will be allowed to present your evidence to exonerate yourself, however, irrespective of how outrageous a claim, if you cannot refute a claim with direct evidence, you will likely be held liable.
Guilty unless proven innocent.
Many times, the only evidence against you is a claim form provided by the Labor Board to the employee to fill out.
Even if the employee is only going from memory and the dates and hours worked are wildly inaccurate, the employer must have the documentation or other evidence to refute the claims or the information on that sheet will be what the hearing officer will use to issue an award.
INNOCENT UNTIL PROVEN GUILTY?
Not in a labor board hearing. The Labor Board is an administrative body and a hearing is not subject to most civil procedure rules.
In other words, the employee can claim anything they want and unless the employer can prove that they did not commit the bad acts claimed, judgment will be for the employee.
Guilty unless proven innocent.
JUDGE DREDD
Like Judge Dredd, Hearing Officers are the judge, the jury and the executioner.
All that power in the hands of an employee.
That’s right, the person responsible for your case and the judgment is an employee.
An employee that has not likely ever owned a business or employed anyone but has likely been an employee all their life.
Unless the employer can prove with irrefutable evidence the contrary, the hearing officer will likely grant a decision and award in favor of the employee irrespective of how outrageous the claim.
There are employers that are mistreating workers and breaking California labor laws and those employers should be punished to the full extent of the law.
You know who shouldn’t be punished? The good employer who hasn’t done anything wrong.
The problem with the Labor Board is that it is wrought with fraudulent claims and often, these claims become judgments against good employers with very severe penalties attached because the Deputy Labor Commissioners and the Hearing Officers that are the judge, jury and executioner are trained to favor the employee over the employer irrespective of the facts.
EXTRA! EXTRA! READ ALL ABOUT IT….Minimum Wage Employee Hits The Labor Board Lottery!
How can a minimum wage dispute turn into a five-figure award?
Penalties, fees and interest.
Most notorious of all penalties is the Wait Time Penalties. All wages are due to an employee on discharge.
If the Hearing Officer rules in favor of the employee, those wait time penalties are applied and they are huge. The Wait Time Penalties are the employee’s daily wage multiplied by a maximum of 30.
Even for a minimum wage employee, that becomes a very large number.
Now add any other penalties, fees and interest and even a small wage issue can become a large award in favor of the employee.
They Will Never Collect From Me, I Will Just Shut My Business Down!
If it were only that simple. The Labor Code can hold the direct supervisor/owner personally responsible for a labor claim even if the company is set up as a corporation or LLC.
That’s right you can be personally named in the claim and even if you bankrupt your business, they can still collect from you personally.
The labor board also has some very wicked collection powers. The worst of which is the power to shut your business down until you pay the judgment.
What Can You Do To Avoid Labor Board Problems?
- Keep detailed accurate records of employees work hours and breaks.
- Pay an employee immediately upon termination.
- If you know that there is a potential problem, enter into a severance agreement with a waiver of claims with the employee if possible.
- Have an arbitration agreement that shifts attorney’s fees with all your employees.
- Never appear in front of the Labor Board alone. Many of the problems above can be avoided with competent counsel making sure the Labor Board does not take advantage of you.
Remember, the Labor Board is not on your side. Even though they claim to be an impartial body our experience has shown us time and time again that they are almost always on the side of the employee.
We are fighting back. We have dedicated our entire mission to protecting California employers and business owners.
If you have any employee issues please reach out. We offer a FREE 15 minute consultation to any California business owner.
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