A new report released by Harvard and the University of California San Francisco, titled “Compliance and the Complaint Gap: Labor Standards Violations in the California Service Sector” by Daniel Schneider, Elizabeth Kuhlman, Kristen Harknett, and David Weil, examined the extent of compliance with labor standards among hourly service sector workers in California. Service industry workers are one of the industries known to have large rates of labor and wage pay violations. This study was based on surveys conducted with approximately one thousand employed workers, and some recently unemployed, from nearly 100 of the largest firms in the service sector. The study was performed in early 2024. 

Federal Labor Standard Act – Violations 

Nearly half of workers surveyed at least one violation of the Fair Labor Standard Act (FLSA), with 2 out of 5 reporting violations where they were required to work off the clock, did not receive overtime pay, did not receive full pay, were paid less than the minimum wage for their work, were not paid all required PTO, or they did not receive all bonuses or tips. 

A similar number of workers reported California violations, including violations regarding meal breaks, rest breaks, no overtime after 8 hours in a day, California or local minimum wage violations, and claims similar to FLSA violations. 

California Labor Law Violations 

California is recognized for having some of the highest labor standards in the United States, including high minimum wages, strict overtime pay regulations, and mandated paid sick leave. The report emphasizes the effectiveness of these laws hinges on their implementation and compliance by employers. 

California labor laws checked for violations: 

• Off clock work 
• No overtime after 8 hours in a day 
• No overtime after 40 hours in a week 
• Not paid for all hours worked 
• Time record changed 
• Auto clock out, including auto deduction of lunch 
• Unpaid PTO 
• Unpaid bonuses 
• Unpaid tips 
• Required to pay for uniform 
• Not paid for training 
• Not reimbursed for gas, insurance 
• Deduction of pay for short register 
• Deduction of pay for uneaten meals 
• Paid late 
• Paid, but told to wait to cash check 
• Paid in cash with no paystub 
• Paid by voucher check or other form requiring check casher 

The rate of violations, by category: 

Some of the most common violation allegations included eighteen percent of workers claiming they had to work off the clock. One in ten reported unpaid overtime when working over eight hours in a day in California, while seven percent reported missing overtime for working over 40 hours in a week. 

The most common complaint for pay deduction was workers being required to pay for their uniforms, followed by no overtime for work over 8 hours (California requires time-and-a-half overtime not just for work beyond 40 in a week, but also work over 8 hours in a day).

The rate of pay deduction violations:  

The most common complaint for pay deduction by far was workers claiming their job required them to pay for their uniform.

The rate of pay method violations: 

was reported by seven percent of workers in the study, the most common form of pay method violation. California allows for multiple agreed pay schedules, such as weekly pay or bi-weekly pay, but however it is decided and agreed upon, the payment must be on time. 

Reporting Labor Law Violations and Retaliation Against Workers 

Only 22% of reporting workers experiencing violations reported them. Most complaints were made internally to supervisors, managers, or human resources, with only 2% reported to state or local regulatory agencies. 

Over half of the workers who reported violations alleged facing retaliation, such as reduced work hours, worse schedules, or demotions. Retaliation was reported more among workers who were unemployed at the time of the survey. 

Employers are prohibited from retaliating against an employee for reporting wage, labor, or safety violations. 

Labor Law Firm 

Schneider Wallace Cottrell Konecky LLP is a national law firm handling a wide array of employment actions, with offices in California, Texas, and Puerto Rico.  If you have experienced a FLSA or California labor law violations, or having not been paid for all your time and labor, contact an experienced labor and employment attorney at Schneider Wallace Cottrell Konecky LLP.