California Labor Code 1197 Overview & Examples
Legally reviewed by: Jessica Anvar Stotz, JD, MBA
California Labor Code 1197 is a short California law that states the minimum wage shall be set by local or state law and must be followed by employers. It also states that paying lower than the minimum wage is unlawful.
California Labor Code 1197 Explained in 90 Seconds
This Labor Code requires employers to abide by whatever minimum wage is set by the state or locality in which the employer is located. Failing to pay employees the set minimum wage is considered unlawful under California Labor Code 1197.
Understanding Minimum Wage
Minimum wage requirements are in place so that employees can rely on a baseline level of stable income to support themselves with. The minimum wage of an area, typically a state but sometimes a city or county, is the lowest amount per hour that an employee can be paid. Having a minimum wage in place helps ensure that basic living standards are accessible to people within a particular area.
What Does Labor Code 1197 Say About Minimum Wage?
The core of Labor Code 1197 is that the minimum wage, set by the California Labor Commission (or other local laws), cannot be modified or ignored in any way by any employer. An employer must pay their employees at least the minimum wage or face legal consequences according to CA Labor Code 1197.
How Much is the Minimum Wage in California?
As of the time of writing, May 2024, California’s minimum wage is $16.00 per hour. It was raised to that level on January 1st, 2024, and will continue to be adjusted for inflation as time goes on.
What if My Employer Pays Less than the Minimum Wage?
An employer paying less than minimum wage is violating California law by going against California Labor Code 1197. It is also worth noting that employees cannot agree to be paid less than the minimum wage, and even if you make more than the minimum wage, being paid less is a violation of California Labor Code 1197.
How to Recover Unpaid Minimum Wages
Employees generally have two options in pursuing their unpaid minimum wages. Their first option is to file a wage claim with the California Divison of Labor Standards Enforcement, sometimes also called the Labor Commissioner or DLSE. An employee can file a wage claim online on their website, through the mail or e-mail, or in person. Employees should expect to provide some documentation and information like the name and address of the employer in violation of the law and any responsible parties, like an employee’s manager.
The other option for an employee is to file an action against their employer in court for the unpaid wages. For minimum wage claims specifically, employees need to file such an action within three years of the violation to be within the statute of limitations period. An employee who waits longer than three years to bring a claim will likely be barred from doing so. If this is the route an employee chooses, they should be prepared to hire an experienced employment attorney to have the best chance at winning their case.
What About Tips? Can They Count Towards Minimum Wage?
Under California law, tips do not count towards an employee’s minimum wage. While some other states have laws that allow an employer to essentially cover the difference between an employee’s earned tips and the minimum wage in that state to satisfy the minimum wage laws, California law requires that employers pay their employees minimum wage plus tips. For more information, the Division of Labor Standards Enforcement has a helpful page covering various common tip questions employees might have. That page can be found here and, in the section, covering resources for employers and employees.
Knowing Your Rights and Taking Action
California Labor Code 1197 protects employees and their right to be paid a minimum wage. Employees in California must be paid a minimum wage according to California law. If an employer fails to do so, they are in violation of California law and an employee is entitled to file a wage claim or pursue an action against their employer in court. If you are an employee and suspect you are being underpaid, be aware of your rights under California law so you can ensure a satisfactory outcome for yourself.
Example Scenarios
Example 1: Employee is Hired and Agrees to be Paid Less Than Minimum Wage
- Scenario: A cashier at a department store is hired and agrees to be paid less than the minimum wage in exchange for a discount deal on goods the store stocks. The employer assures her this is legal, and the employee thinks nothing of it, deciding to continue working as normal.
- Violation: Employees cannot agree to be paid less than minimum wage.
- How Labor Code 1197 Protects: Employees cannot be paid less than minimum wage under any circumstances, even if they agree to be paid less. The employer in this case would be in violation of California law.
Example 2: Employee is Hired and Makes Less Than Minimum Wage Because of Tip Inclusion
- Scenario: A waiter at a fine dining restaurant is hired and is told that he will be paid wages according to how much he makes in tips: the tips will make up the first portion of his wages, and the employer will pay the difference to get the total to the requirement for minimum wage laws. This takes place in California.
- Violation: Employer cannot use tips to pay the difference between tip wages and minimum wage.
- How Labor Code 1197 Protects: As before, employees cannot be paid less than the minimum wage by their employer in any situation. The tip-difference-minimum-wage scheme is permitted in some states, but not in California.
Example 3: City With Its Own Minimum Wage Separate from the Rest of the State
- Scenario: A coffee shop worker in San Francisco is paid according to California’s minimum wage law despite San Francisco having its own unique minimum wage that is a dollar an hour higher. The worker’s employer claims that they only have to follow California law, not local laws.
- Violation: Local minimum wage laws take precedence over state minimum wage laws.
- How Labor Code 1197 Protects: Labor Code 1197 recognizes local minimum wage laws as legitimate, and when they exist, employers must abide by them. Even when a more general minimum wage law exists, such as one that covers the state as a whole, local laws take precedent.
It is important to note that the above three examples are merely examples to illustrate the function of California Labor Code 1197. They should not be taken as legal conclusions or advice.
Resources for Employers and Employees
- California Labor Code 1197
- California Department of Industrial Relations
- California Department of Industrial Relations – Division of Labor Standards Enforcement
- California Department of Industrial Relations – Division of Labor Standards Enforcement: File a Wage Claim
- California Department of Industrial Relations – Division of Labor Standards Enforcement: Tips and Gratuities
Connect with an Attorney
Minimum wage violations are serious and can have significant impacts on an employee’s ability to live a stable life and support themselves. If you are an employee who has experienced such a violation, seeking legal advice and counsel for your claim may be the best way for you to be compensated for your losses. LawLinq is a California state bar certified lawyer referral service. At LawLinq, we connect employees like you to successful and skilled employment attorneys that know California employment law like the back of their hand. Contact us today via phone at (855) 997-2588 or by filling out an online form to get a free case evaluation with one of LawLinq’s panel member attorneys!
