The manufacturing sector is one of the pillars of economic stability and innovation. However, it is not immune to major internal issues. Among them are wage-related issues, a relatively widespread and harmful concern among its workforce. You might have had to work overtime without pay, or been misclassified, or your paycheck might have been unlawfully docked or stolen. These discrepancies are not minor. They are serious offenses that threaten your financial stability and undermine the principles of fair labor practices.

You must assert your rights under the law if you have fallen victim to wage theft. Talk to our attorneys at Stop Unpaid Wage. We will help you regain the compensation you deserve and defend your rights. Let us look at the wage-related issues in detail.

What Is Wage Theft?

Wage theft occurs when an employer fails to pay workers the full wages they are legally entitled to. This may be done in many forms, and it can be as blatant as refusing to pay the employee wages for hours worked, or as subtle, but still unlawful, as other methods. Knowing the legal minimums and how your wages are supposed to be computed is the beginning of identifying and fighting possible wage theft, enabling you to advocate for your right to the appropriate pay.

The federal minimum wage of $7.25 an hour is inapplicable to most workers because California law stipulates a higher state-wide minimum wage. As of January 1, 2025, the state’s minimum wage is $16.50 an hour regardless of the employer. It is important to note, though, that many cities and counties in California have enacted their own local minimum wage ordinance, which is higher than the state rate and is frequently raised yearly according to the Consumer Price Index.

For example, while the state minimum wage is $16.50, the minimum wage in the city of Los Angeles is $17.87 per hour as of July 1, 2025. Other regions like West Hollywood, San Francisco, and San Diego equally have unique, elevated rates applicable to employees in their jurisdictions. So it is always essential to look up the local city or county ordinances to see the exact minimum wage to apply to your employment, since it may be much higher than the state requirement. Not earning this rightful local minimum wage is obvious wage theft.

In addition to the normal hourly rate, you should also be very keen on your rights in terms of overtime compensation. Non-exempt employees in California usually have the right to one and a half times their regular wage rate on all hours worked beyond eight hours during a workday or over 40 hours in a workweek. This means that when you put in 9 hours daily, your income at the 9th hour is 1.5 times your usual rate. This is even when you have not yet attained 40 hours per week. Moreover, California law entitles workers to "double time" pay, twice their regular pay rate. This increased rate applies to any hours worked beyond 12 in a single day, and beyond 8 hours on the seventh consecutive workday in a week. Working an extra 13 hours per day would pay this 13th hour twice your standard rate. Similarly, if you work your seventh day in a row and work 9 hours, then that 9th hour on that particular day would be compensated at twice your standard rate. Accurate overtime calculations are essential to ensure you receive proper pay, and errors in this area are a common form of wage theft.

To access the most up-to-date and precise wage data, like state and local wages, and elaborate descriptions of overtime regulations, check out the California Department of Industrial Relations (DIR) page. This is an official source of labor laws and regulations in the state, which is the authoritative place to get information about labor laws and regulations in the state, and it is up-to-date and reliable to help you know what your rights are and protect them regarding wages.

Types of Wage Theft Schemes in the Manufacturing Industry

Most wage theft schemes deprive workers of their due earnings. These schemes include obvious underpayments and more subtle methods of manipulation of time and compensation, all of which increase revenues at the cost of the honest worker. Some of the most popular strategies you should know to protect your rights as a manufacturing worker include:

1. The Misclassification Scheme

Employee misclassification, especially for salaried employees, is a more advanced and common type of wage theft. Many employers mistakenly believe that a fixed salary automatically exempts workers from overtime pay. This widespread "salary myth" is addressed in California law, which clarifies that receiving a salary alone does not exempt an employee from overtime pay. This misconception is quite common and results in serious underpayment and denies many people the wages they are entitled to receive under the protective California labor laws.

Whether or not a salaried worker is exempt from overtime pay depends on a particular and strict test of duties, rather than just the fact that you are paid a salary or have a job title. The test carefully analyzes the actual job duties and the percentage of time spent on specific, qualifying duties. There are several white-collar exemptions to overtime in California, including administrative, executive, and professional exemptions. However, to qualify under these exemptions, you must primarily perform intellectual, managerial, or creative duties. In addition, the employee must regularly make independent decisions and spend over 50% of their work time on duties that qualify for the exemption.

In the same vein, to qualify as an exemption under the so-called executive exemption, you must customarily supervise the work of at least two other full-time employees, and you can hire or fire or have your recommendations as to such personnel actions given special weight.

Ask yourself: Do I spend more than half of my time on non-managerial, routine tasks that do not require independent judgment? If yes, you will likely be misclassified even when you receive a salary. This misclassification also gives you the right to unpaid overtime wages, as well as to the compensation of missed meal and rest breaks, and other basic protections that non-exempt hourly employees usually enjoy. California labor laws focus on your actual duties, not your job title, ensuring employers cannot avoid wage obligations by assigning misleading titles.

In addition to misclassifying employees as exempt from overtime, another common tactic is labeling them as independent contractors to avoid legal obligations. This is a common tactic employers use not to pay:

• Overtime

• Payroll taxes, including Social Security and Medicare contributions

• Unemployment insurance

• Workers compensation premiums

• Benefits like health insurance or paid sick leave

This practice transfers significant financial costs and risks to you, the worker. California applies the ABC test to determine whether a worker is properly classified as an employee or an independent contractor.

Under this strict standard, a worker is presumed to be an employee unless the employer can prove all three of the following:

• The worker is not subject to the control and direction of the hiring entity about the performance of the work, both under the contract to perform the work and in fact

• The work performed by the worker is not of the type generally performed by the hiring entity in its business, and

• The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

It is important that you learn these differences and the details of the “duties test” in the case of salaried exemptions and the “ABC test” in the case of independent contractor status, so that you can defend your rights and may be guaranteed the full pay and benefits you are entitled to by law.

Whether intentional or not, misclassification carries grave legal consequences, including heavy penalties and back pay.

2. Manufacturing-Only Pay Violations

Manufacturing’s round-the-clock nature often creates wage and hour issues that may violate California law. One common issue is shift differentials, which provide higher pay for less desirable hours, like swing or graveyard shifts. Although the California law does not explicitly require that shift differentials be paid, if your employer does have a policy of paying them, or it is contained in a collective bargaining agreement, then the additional payments must be calculated correctly and added to your regular rate of pay when calculating overtime so that you are correctly paid for all the hours you work.

One of the critical safeguards for you as a manufacturing employee in California is reporting time pay, as outlined in Industrial Welfare Commission (IWC) Wage Orders, namely IWC Wage Orders 1-16, Section 5. This law states that when you report to work during a scheduled shift and receive less than half of your regular or scheduled day, your employer should pay you at least half of the scheduled shift. This comes with a minimum of two hours and four hours of pay at your regular rate. This compensates you for the inconvenience and expense of reporting to work only to be sent home early, so that you are not unduly punished because of the inefficiency of your employer in its scheduling.

Moreover, time spent putting on (donning) and taking off (doffing) personal protective equipment (PPE) or safety gear is considered paid working time in California. For example, before starting your production work, you must wear steel-toed boots, safety glasses, or special clean-room suits. The time you spend putting these items on and taking them off, plus any waiting or walking time involved, is considered payable. This principle acknowledges that this is an essential part of your job, and that it is frequently mandated by your employer or the work itself.

The split shift premium is another significant safeguard for you in some manufacturing plants, especially those with unusual schedules. A split shift is any working day your employer has designated that is not a working day or a bona fide meal or rest break, during which you receive no pay. For example, a morning shift with several hours off followed by an evening one is a split shift.

In California, when your wages are less than minimum wage for all hours worked plus one hour of work at the minimum wage (higher of either state or local), your employer owes a premium amounting to one hour of pay at the minimum wage. This premium offsets the inconvenience of fragmented schedules, often preventing effective use of unpaid breaks.

3. Garment Industry and Piece-Rate Abuses

Wage violations have long plagued the garment industry due to piece-rate pay practices. Piece-rate pay often results in illegal underpayment, as the effective hourly rate can fall below the legal minimum. In your attempts to make a living wage, you might usually work very long hours under challenging conditions, only to discover that your total pay was insufficient when divided by the amount of time you had spent.

After understanding how widespread these abuses are, California passed an unprecedented regulatory framework in 2021: the Garment Worker Protection Act (Senate Bill 62). Effective January 1, 2022, this law significantly reformed garment pay by prohibiting piece-rate compensation in most cases. Instead, the law requires that, as a garment worker, you be paid at least the minimum wage applicable to all work hours, but with the additional possibility of incentive-based bonuses over your legal pay. This significant shift is meant to put you in a position where you are fairly paid regardless of the output of your time.

The most substantial and transformative part of the Garment Worker Protection Act may be its creation of joint liability. The law holds fashion brands and retailers jointly and severally liable for wage theft that their contractors commit. In the past, brands would usually outsource their production to different contractors, which introduced a chain of intermediaries that made it challenging to pursue wage theft by the beneficiaries of the work. Under joint liability, if a contractor has denied you wages, you can now sue the bigger fashion brands that contracted with that manufacturer, effectively suing the big boss in the supply chain. This system discourages wage theft and ensures those who benefit from your work are held accountable for paying fair wages.

More importantly, the Act also gives the California Labor Commissioner stronger powers to enforce the law, a crucial source of relief to workers beyond individual lawsuits. For example, an employer who violates the piece-rate prohibition may be liable to their employees to pay compensatory damages of up to $200 per employee per violation pay period. The office of the Labor Commissioner can investigate, issue citations, and even go up the supply chain in enforcement actions, which means that unethical practices are harder to get away with. This complex enforcement strategy is intended to ensure that the safeguards in the law are converted into practical benefits of working conditions and fair pay to all garment employees.

4. Unlawful Deductions and Final Pay Violations

Employer practices can unlawfully reduce your hard-earned paycheck, particularly through illegal deductions. California employers are severely restricted in the amount they can deduct from your wages. For example, your employer cannot deduct from your paychecks for damaged equipment, unintentional cash shortages, and customers who have walked out of the store without paying. Moreover, when your employer asks you to wear a particular uniform, which is either unique in its design or color, the employer bears the cost of the uniform and should not deduct it from your salary. These protections ensure that employees are not held financially responsible for ordinary business expenses and risks.

In addition to regular wages, California has strict policies on your final paycheck when your job terminates. The timing of your final paycheck depends on how your employment ends. Should your employer dismiss or lay you off, all wages owed, including vacation time accumulated but unused, will have to be paid on the final day of employment. There is no grace period for this payment. If you resign and give at least 72 hours’ notice, your final paycheck must be provided on your last work day. However, should you resign without giving 72 hours' notice, your employer must give you your final wages within 72 hours of your previous working day. These deadlines guarantee quick access to the money you have earned as you change from one job to another.

Penalties to employers who do not make these final paychecks can be harsh. California law provides waiting time penalties under the Labor Code Section 203. If your final paycheck is willfully late, your employer owes a penalty of one day’s wages for each day delayed, up to 30 days. This means that when your employer refuses to pay you your final pay, you may have a substantial amount of extra compensation, and thus, this is a strong incentive for the employer to be law-abiding.

Based on past cases, some employers who violate these final pay laws have also broken other wage laws, which is a more widespread, institutional failure to comply with labor laws. This trend indicates that an employer who is willing to shortchange an outgoing employee on their final salary is likely to be cheating in other areas, including not paying overtime, not providing mandated meal and rest breaks, misclassifying employees to avoid paying benefits, or even paying less than the minimum wage per hour worked. This conduct reflects a larger corporate culture in which no priority is given to adherence to essential worker protections. As an employee, this information makes an isolated case of unpaid final compensation into a red flag, indicating a consistent disregard for fair labor practices throughout the company's operations. This widespread non-compliance is a solid foundation to act against the employer, since it shows that the unlawful behavior is a pattern rather than a one-time accident.

Filing a Federal Complaint vs. Filing a State Complaint

If you suspect wage theft, start by collecting related documents, including pay stubs, timecards, copies of any employment agreements, text messages, emails, and any personal notes you have made about hours worked, missed breaks, or discussions about your pay. The greater the evidence, the more potent your possible claim will be.

After you have obtained your documentation, you have a couple of options to advance your claim for wages. The first is to file a federal complaint against the U.S. Department of Labor through the Wage and Hour Division (WHD). The WHD enforces federal minimum wage, overtime rules, and other labor protections. Although a federal complaint is an option, it may take longer at times, and the protections available under federal law may not be as thorough as those available under California state law. Therefore, a state-level complaint is often more favorable for California workers.

In California, filing a state complaint is the same as dealing with the California Labor Commissioner or Division of Labor Standards Enforcement (DLSE). To lodge a claim, you must fill out and file a wage claim form at a local DLSE office. A deputy labor commissioner will review your claim after it’s filed. Often, a settlement conference will be set up, at which you and your employer meet with a DLSE representative to see whether the issues can be resolved informally.

If no settlement is reached, your case may proceed to a formal legal hearing, where you and your employer can present evidence and testimony under oath before a hearing officer. This process is meant to be simple, but can be complicated and daunting.

While you can file a DLSE complaint, hiring an employment attorney is often the most effective way to recover unpaid wages and penalties.

A lawyer can also move faster than government agencies with massive backlogs. Furthermore, a lawyer will be able to carefully compute all the damages you are eligible to receive, not only unpaid wages, but also statutory penalties, including the waiting time penalties on late final pay, which can significantly add to your recovery.

An attorney will handle all paperwork, legal representation, and court proceedings, relieving you of the burden. Most importantly, an attorney will protect you from unlawful employer retaliation by your employer as you will enjoy the privilege of having your rights upheld throughout the whole process, and be in the best position to have the best possible outcome.

Find an Employment Attorney Near Me

Manufacturers face unique wage issues. California’s strong labor laws, including reporting time pay and the Garment Worker Protection Act, are designed to safeguard your wages. Do not let employer violations or illegal deductions undermine your hard work. If you believe you are a victim of wage theft, defend your rights and claim the salary you have been cheated out of. Contact Stop Unpaid Wages today at 424-781-8411 to talk to an expert about your case and learn what legal recourse you may have.