“Wage Theft” in California – What Workers Need to Know

Wage theft occurs when employers intentionally fail to pay you for your work. In California alone, each year employees and independent contractors lose about $2 billion through wage theft.¹

Yet California workers file only about 30,000 wage theft claims a year, seeking just $320 million. Ultimately, workers recover about only $40 million – just two percent of what they are owed.²

However, you now have an additional weapon to pressure your employer into paying up: With the passage of Assembly Bill 1003 by state lawmakers in 2021, wage theft of more than $950 is now a grand theft crime. This means if your back wages total more than $950, your employer could face felony charges.

The new law reads:

2. How can I get my money?

Most victims of wage theft choose to file a wage claim with the California Labor Commissioner, part of the Division of Labor Standards Enforcement (DLSE). You can complete the entire process online relatively quickly, or you can complete the process in person or by mail.

You will have to provide the date(s) the theft occurred and the amount you are owed. The Labor Commissioner will also want supporting documentation such as pay stubs, time sheets, unpaid commission records, etc.

If the Labor Commissioner agrees that you are a wage theft victim, it will demand that your employer finally pay you. If your employer still refuses, the Labor Commissioner will go to court on your behalf.

Note that there is a statute of limitations for filing wage complaints:

Type of Wage Theft in California	Time Limit for Filing Wage Claim
Bounced checks or withheld personnel/payroll records	1 year
Breaking an oral promise to pay above minimum wage	2 years
Failure to pay minimum wage, overtime, or reimbursements Failure to provide rest breaks, meal breaks, or sick leave Making illegal deductions	3 years
Breaking a written contract	4 years4

If you do not wish to involve the Labor Commissioner, you can pursue your lost wages by filing a wage and hour lawsuit instead. However the court system is very complicated, so it is recommended you hire an attorney to represent you.

Whether you file a wage complaint or bring a lawsuit, you are entitled to liquidated damages. This is double the back pay you are owed, plus interest. If you bring a lawsuit, the court can also award you:

• attorney’s fees, and
• court costs.⁵

Your attorney can help you determine how soon you must bring the lawsuit based on the facts of your case.

Additional legal recourses

You may have grounds to bring a PAGA lawsuit as well, which allows you to recover civil penalties separate and apart from your back pay.

Also, if your employer violated a federal labor law, you can file a wage claim with the U.S. Department of Labor’s Wage and Hour Division.

Using the criminal justice system

Since wage theft is a crime, you also have the option of reporting your employer to the police. Then if your employer is charged and convicted, the judge would order your employer to pay you your back wages as restitution (unless you have already recovered your back pay through the Labor Commissioner or a lawsuit).

The statute of limitations for a district attorney to prosecute employers for wage theft is:

• one year after the theft if you are owed $950 or less;
• three years after the theft if you are owed more than $950.

So if you wait too long to inform the police, the D.A. may be time-barred from bringing charges.

Note that if you report your employer to the police, you can still file a complaint with the Labor Commissioner or pursue a lawsuit. Criminal cases are entirely separate from civil actions.⁶

3. Is wage theft a crime?

Yes. Under Assembly Bill 1003, intentionally not paying workers in California is prosecuted as grand theft if the employer withheld more than:

• $950 from you in a 12-month period, or
• $2,350 from you and at least one other worker in a 12-month period.

Grand theft is a crime no matter whether you are an exempt or non-exempt employee or an independent contractor. It also does not matter whether your employer is a large company or a small business.

Grand theft penalties

As a wobbler, grand theft can be charged as a misdemeanor or felony. Misdemeanor grand theft carries:

• up to 364 days in county jail and/or $1,000 in fines to the court, and
• restitution to you for the back wages you are owed.

Felony grand theft carries:

• felony probation with up to 364 days of county jail time, or
• a county jail sentence of 16 months, 2 years or 3 years.

In addition, your employer may have to pay:

• up to $10,000 in fines to the court, and
• restitution to you for the back wages you are owed.⁷

Predictably, employers are a lot more scared of felony charges than misdemeanor charges. Plus, felony charges allow prosecutors additional resources when investigating wage thefts – including using grand juries. Therefore, Assembly Bill 1003 is hopefully deterring employers from committing wage theft in the first place.

Wage theft of $950 or less

Employers who withhold $950 or less in back wages face misdemeanor charges. Penalties include:

• up to 6 months in county jail and/or $1,000 in fines, and
• restitution to you for the back wages you are owed.⁸

How employers fight wage theft allegations

The primary defense employers use when fighting California wage theft charges is that they did not intentionally fail to pay you. If it appears your employer made an innocent mistake and paid you as soon as you pointed it out to them, then likely no crime occurred.

Whether your employer purposely withheld wages is something prosecutors determine on a case-by-case basis. Since AB 1003 is a new law, there is not much guidance as to what employer actions qualify as willful or accidental.

4. Should I report my employer to the police?

It is advised you speak with a California employment lawyer to discuss the pros and cons of reporting your employer to the police for wage theft.

Some advantages of involving the police are:

• Reporting an injustice to the police may make you feel better;
• Being investigated or prosecuted could prompt your employer to pay you right away in an effort to get the charges dropped;
• If your employer is convicted, you may feel validated.

Some disadvantages of involving the police are:

• Criminal cases can take several weeks, months, or longer;
• You may be subjected to interviews by police, and you may have to testify if the case goes to trial;
• If your employer is jailed and fined, that could potentially delay your being able to receive restitution.

In most wage theft cases, you can recover your back wages through the Labor Commissioner or a lawsuit without involving the police at all.

If you do decide to report your employer to law enforcement, a private attorney can help you fill out the police report in a way that will grab the officers’ attention.

5. Can I be fired for reporting wage theft?

California law prohibits your employer from retaliating against you for reporting wage theft. Examples of retaliation include:

• firing you (wrongful termination);
• demoting you;
• denying you a promotion;
• reducing your pay or work hours; and/or
• discriminating against you.

If you have been retaliated against by your employer, you can submit a complaint with the Labor Commissioner or file a lawsuit. The statute of limitations is one year from the retaliatory act.

If you win your case, you could be reinstated to your old job (if you were fired or demoted) and be compensated for any unpaid wages.⁹

Learn more about retaliation protections in California.

What is the Wage Theft Protection Act?

Passed in 2011, California’s Wage Theft Prevention Act requires private employers to inform non-exempt employees of:

• the employee’s rate of pay and overtime rates,
• the employee’s basis of payment (for example, hourly, piece-rate, etc.),
• the employee’s payday,
• whether the employer claims allowances (such as for meals or lodging) as part of the minimum wage, and
• all trade names the employer does business as.

Non-exempt employees must receive this information in writing and in their preferred language once they are hired. If this information changes, employees must receive notice in writing (such as on their pay stubs).

Additional reading

For more in-depth information, refer to these scholarly articles:

• Democratizing the FLSA Injunction: Toward a Systemic Remedy for Wage Theft – Yale Law Journal.
• Wage Theft Criminalization – U.C. Davis Law Review.
• Facilitating Wage Theft: How Courts Use Procedural Rules to Undermine Substantive Rights of Low-Wage Workers – Vanderbilt Law Review.
• The Problem of Wage Theft – Yale Law and Policy Review.
• Wage Theft in Lawless Courts – California Law Review.

Also see our related articles on pay stub violations, discrimination lawsuits, and California wage and hour laws.

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Legal References