Is It Illegal Not to Pay Overtime In California ?
An employee's right to wages and overtime compensation clearly have different sources. Straight-time wages (above the minimum wage) are a matter of private contract between the employer and employee.
Entitlement to overtime compensation, on the other hand, is mandated by statute and is based on an important public policy.
In Gould v. Maryland Sound Industries, Inc., supra, 31 Cal. App. 4th 1137 the court stated:
"The duty to pay overtime wages is a duty imposed by the state; it is not a matter left to the private discretion of the employer. ( Lab. Code, 1173; Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal. App. 3d 16, 29 273 Cal. Rptr. 615.)
California courts have long recognized that wage and hours laws 'concern not only the health and welfare of the workers themselves, but also the public health and general welfare.'In Monzon, supra, we observed one purpose of requiring payment of overtime wages is ' "to spread employment throughout the work force by putting financial pressure on the employer . . . ." ' (224 Cal. App. 3d at p. 39.)
Thus, overtime wages are another example of a public policy fostering society's interest in a stable job market.
Furthermore, as we have previously explained, the Legislature's decision to criminalize certain employer conduct reflects a determination that the conduct affects a broad public interest. . . . for example, under Labor Code sections 1174 and 1175 it is a crime for an employer to fail to keep or refuse to furnish payroll records showing the hours worked daily by, and wages paid to, its employees.
Under Labor Code section 1199 it is a crime for an employer to fail to pay overtime wages as fixed by the Industrial Welfare Commission." (Id. at pp. 1148-1149, 37 Cal. Rptr. 2d 718.)
There can be no doubt that the one-way fee-shifting rule in section 1194 was meant to "encourage injured parties to seek redress--and thus simultaneously enforce the minimum wage and overtime laws in situations where they otherwise would not find it economical to sue." (Covenant Mutual Ins. Co. v. Young (1986) 179 Cal. App. 3d 318, 325 225 Cal. Rptr. 861.)
To allow employers to invoke section 218.5 in an overtime case would defeat that legislative intent and create a chilling effect on workers who have had their statutory rights violated.
Such a result would undermine statutorily-established public policy.
That policy can only be properly enforced by a recognition that section 1194 alone applies to overtime compensation claims.