By: Ann Tran-Lien, JD, Managing Director of Legal Affairs
Originally published in The Therapist May/June 2016Updated
May/June 2024

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Understanding one’s rights and obligations under California employment and labor laws can be daunting. CAMFT’s legal department regularly fields questions from members who are employers, employees, and volunteers regarding pertinent labor laws and claim filings with the California Labor Commissioner’s Office. This article provides a brief discussion of the process and procedures for a wage claim filed with the labor commissioner.

Employee vs. Volunteer in California
An important issue for many registered associates and employers of associates is whether associates can be unpaid volunteers or must be classified as W-2 employees and paid accordingly. Individuals considering filing wage claims have relayed that they were misclassified as volunteers and/or not paid in accordance with California labor laws and wage orders.

Two relevant California Labor Commissioner’s Office rulings provide guidance on this issue:

• In a June 2020 ruling, the Labor Commissioner applied the Six-Criteria Test to determine if an AMFT who was an unpaid intern providing psychotherapy at a counseling center should have been paid as an employee for their work. The Commissioner looked at the totality of the circumstances and ruled that the AMFT should not have been classified as an “exempt intern” but rather as an employee entitled to the protection of wage and hour laws. To read more about this ruling and the Six-Criteria Test, see “Labor Commission Reviews Unpaid AMFT Internships” at https://www.camft.org/Resources/Legal- Articles/Chronological-Article-List/ labor-commission-reviews-unpaid-amftinternships.
• In a 2013 ruling, Johanna Workman v. Regents of the University of California, San Francisco Branch, the Labor Commissioner referenced and applied the Six-Criteria Test to determine whether a postdoctoral psychology intern who provided counseling services at UCSF should have been paid at least minimum wage for each hour she was required to work or should have been classified as a volunteer. The Labor Commissioner concluded that UCSF’s associateship program did not satisfy all six criteria required to classify someone as a volunteer and thus found that the intern should have been classified as an employee and not classified as exempt from the state’s minimum wage law. For further reading on this ruling, see “Recent Labor Board Ruling Sets Precedent for California Internships” at https://www.camft.org/Resources/ Legal-Articles/Chronological-Article-List/ recent-labor-board-ruling-sets-precedent-forcalifornia- internships.

Note: These rulings do not address agencies that have MFT trainees providing counseling while enrolled in a degree program.

In addition, employers and registered associates have sought guidance on whether employed registered associates can be “charged” for overhead expenses and supervision. CAMFT’s opinion on this matter is that employers should not require employees to pay back a portion of their wages to cover the employer’s operating costs, including supervision time provided. California Labor Code section 221 prohibits employers from requiring employees to relinquish or pay back a portion of their wages to their employers. In addition, Labor Code sections 450 and 2802 prohibit employers from charging employees for anything that benefits the employer or could be considered an obligation of the employer.

As with every legal issue that arises, the specific facts and circumstances of the case are extremely important. CAMFT recognizes that each employer is unique in their organization, funding, and day-to-day operation. It is recommended that employers who hire registered associates review their specific situation and compensation policies with an attorney whose area of expertise is labor and employment law.

Procedures and Process of a Wage Claim
The California Labor Commissioner’s Office (aka the Division of Labor Standards Enforcement (DLSE)) adjudicates “wage theft” on behalf of workers. Individuals who believe they have experienced wage theft may file a claim with this office.

The following are examples of wage theft in California:

• Being paid less than minimum wage per hour
• Not being allowed to take meal breaks, rest breaks, and/or preventative cool-down breaks
• Not receiving agreed-upon wages (this includes overtime on commissions, piecerate,and regular wages)
• Not accruing or not being allowed to use paid sick leave
• Failing to be reimbursed for business expenses
• Not being paid promised vacations or bonuses
• Having unauthorized deductions from paycheck
• Not being paid split-shift premiums
• Receiving a paycheck that bounces
• Not receiving final wages in a timely manner
• Not receiving reporting time pay
• Having unauthorized deductions from pay
• Failing to receive timely access to personnel files and payroll records

Time Periods for Filing

The following are time limits for claim filing that apply to specific situations:

• Within one year for penalties regarding a bounced check or a failure to provide access to, or a copy of, payroll or personnel records
• Within two years for an oral promise to pay more than minimum wage
• Within three years for violations of minimum wage, overtime, unpaid rest and meal breaks, sick leave, illegal deductions from pay, or unpaid reimbursements
• Within four years for a written contract

Forms and Other Required Documents
An individual filing a claim for nonpayment of wages or other compensation must first file a claim with a local DLSE office. The list of district offices can be found here: http:// www.dir.ca.gov/dlse/DistrictOffices.htm. The form can also be completed and submitted online: https://cadir.my.site.com/oc/s/ login/?language=en_US&ec=302&startURL= %2Foc%2Fs%2F.

The following additional forms should also be submitted if the situation is applicable:

• DLSE Form 55 (if the employee’s work hours or days of work varied per week or were irregular and the employee is seeking unpaid wages or pay for meal or rest period violations)
• DLSE Form 155 (if the claim involves commission pay)
• DLSE “Vacation Pay Schedule” (if the claim involves vacation wages) In addition, copies of the following documents, when relevant, must be submitted to support the claim:
• Time records the employee kept of the hours and dates worked that support the claim
• Paychecks and pay stubs showing the wages paid during the claim period
• Bounced paychecks during the claim period
• Notice of employment information that was provided to the employee by the employer • Collective bargaining agreement, if the employee was in a union

Once the case is assigned, the deputy labor commissioner will determine the appropriate next steps. Within 30 days of the claim being filed, the deputy will notify the individual and the employer of the initial action the office will take, which could be referral to a conference, referral to a hearing, or dismissal of the claim. Many cases are resolved informally before a conference or hearing is scheduled.

The Conference
If the deputy refers the claim to a conference, a Notice of Claim Filed and Conference will be sent to both the individual and the employer that provides a description of the claim; the date, time, and place of the conference; and notification that both parties are expected to attend the conference.

A conference is an informal meeting during which the deputy meets with the parties to determine if they can reach a settlement agreement to resolve the wage claim. The parties will not be under oath when answering questions but should be prepared to discuss the claim with the deputy. Both parties should bring documentation that supports their position. The deputy will facilitate discussion and attempt to determine the merits of the claim. These conferences are less formal than court proceedings, and according to the DLSE, parties frequently appear at conferences without attorneys even though it’s permissible to bring one.

Parties who receive a Notice of Claim Filed and Conference should make all attempts possible to attend the conference. In most cases where the employer fails to attend, the claim is scheduled for a hearing. If the individual claimant fails to attend, and good cause cannot be shown, the claim will be dismissed.

In the event the claim is not resolved at the conference, the deputy may refer the claim to a hearing or dismiss it if there are no legal grounds to proceed. To read more about the conference, visit: https://www.dir.ca.gov/dlse/ lseSettlementConf.html#page_tabs.

The Hearing
If a hearing is scheduled, the parties will receive a Notice of Hearing that sets the date, time, and place of the hearing. The notice may be sent via U.S. mail or personally served on the parties.

Hearings are formal proceedings. Parties and witnesses testify under oath, and the proceeding is recorded. The hearing officer has sole authority and discretion for the conduct of the hearing and is not bound by formal rules of evidence. Thus, the hearing officer has discretion in accepting or refusing evidence offered by the parties and has the authority to determine whether the assessment of penalties is appropriate in the case. Parties can expect the hearing officer to do the following at the hearing: explain the issues and the meaning of terms; set forth the order in which parties and witnesses will testify, cross-examine, and rebut; question parties and witnesses; assist parties in the cross-examination of the opposing party and witnesses; accept and consider testimony and documents offered by the parties; take notice of well-established matters of common knowledge and/or public record; and determine whether there are stipulations by the parties that can be entered into the record.

Each party may be represented by an attorney or another party of their choosing. Each party should bring documents to support their position and can have witnesses testify. Witnesses may attend voluntarily or upon issuance of a personal subpoena that compels their attendance. Subpoenas for documents, records, and witnesses must be issued by the labor commissioner. If a party is requesting issuance of a subpoena, they must submit Form DLSE 564 (Information for Subpoena), which includes the reasons that the documents, records, or witnesses are relevant or necessary. The party requesting the subpoena must also pay the witness fees and mileage, as well as the costs incurred in serving the subpoena.

It is important for both parties to make all attempts possible to attend the hearing. Requests for changes to the hearing’s date, time, and place are generally not granted absent extraordinary circumstances. The rare decision to grant the request is at the discretion of the hearing officer and the senior deputy. If the employer fails to attend, the hearing officer decides the matter on the evidence received from the employee. If the individual claimant fails to appear, the case is dismissed. To read more about the hearing, visit: https://www.dir. ca.gov/dlse/dlseWageHearing.html#page_tabs.

After the hearing, the hearing officer issues an Order, Decision or Award (ODA) that sets forth the decision and the amount awarded, if any. The ODA is filed in the DLSE office within 15 days of the hearing, and the parties are served a copy. If neither party appeals within that time, the decision becomes final and enforceable as a court judgment. Either party may appeal the ODA. The appeal must be filed within 15 days of the date on the certification of service by mail (or 20 days, if the ODA was served to an address outside California).

Appeal to Superior Court
If a party decides to appeal, they must obtain a Notice of Appeal (DLSE Form 537) from the DLSE office and serve a copy to both the labor commissioner and the opposing party. It is recommended that parties interested in appealing an ODA to superior court consult with an attorney. If the employer appeals the ODA, the DLSE may represent the employee if they’re unable to afford counsel in the appeal proceedings. DLSE legal staff has discretion whether to represent the employee. The DLSE has set forth the financial criteria that the employee must meet to be represented by the DLSE. The assigned deputy for the case sends the employee a Request for Attorney Representation and a Statement of Financial Status to be completed and sent back.

The court hearing is held at the date, time, and department indicated on the Notice of Hearing provided by the superior court. The hearing is heard de novo, meaning “starting anew,” by a judge of the superior court who will not take into consideration anything that took place at the prior labor commissioner hearing, including the ODA that was issued. At the end of the hearing, the superior court issues a judgment that supersedes the ODA.

California employment and labor laws are complex. Individuals seeking advice regarding their situation may consider obtaining legal representation or discussing their issues with a representative at a DLSE office.

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Ann Tran-Lien, JD, is a staff attorney and the Managing Director of Legal Affairs at CAMFT. Ann is available to answer member calls regarding legal, ethical, and licensure issues.

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This article is not intended to serve as legal advice and is offered for educational purposes only. The information provided should not be used as a substitute for independent legal advice and it is not intended to address every situation that could potentially arise.