Over the past two weeks, California workers have filed over 600 wage claims with the Labor Commissioner’s Office against construction firms, restaurants, nursing facilities and other employers across the state.
The hundreds of complaints, ranging from unpaid overtime to denied breaks from work, are investigated by commissioners at the labor office, who may eventually render a decision as to whether employers have stolen their workers’ livelihoods.
But for years, the division has struggled to meet the task of enforcing California’s progressive labor protections due to an understaffed labor office, according to a recent state audit. The effect, the audit found, is that it takes years to investigate claims of wage theft and even longer to recover the stolen wages from those employers who failed to pay workers.
The blistering report from the California State Auditor, which state lawmakers requested in 2023, found that it took over two years on average for the state to issue a decision over wage theft claims. That means the hundreds of California workers who filed a formal complaint with the state this month could be waiting until October 2026 for the LCO to determine if their employer stole wages from them.
The department overseeing the labor office says improvements are coming. Of the audit’s 22 recommendations, 19 were already in progress by the time the auditors completed their review, said the Department of Industrial Relations, which oversees the Labor Commissioner’s Office.
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The delays stem, in part, from persistently understaffed field offices that are unable to process the sheer volume of complaints, state auditors found. According to their report, the majority of the LCO’s 17 wage claim adjudication units across the state had a vacancy rate of 30% or more last year. The state auditor said the labor enforcement office would require hundreds more employees to work through the backlog of claims.
As of fiscal year 2022–23, labor officers were shifting through a backlog of 47,000 claims.
“The Labor Commission is all we have and the people who work there are very dedicated,” said Ruth Silver Taube, a supervising attorney with the Workers’ Rights Practice at the Santa Clara University School of Law’s Katharine and George Alexander Community Law Center. But, Silver Taube said, it’s difficult for the LCO to attract qualified employees simply because “the pay is not very good.”
Since the audit found non-competitive salaries and lengthy application times were hampering the state’s ability to process wage claims, the LCO has expanded the number of staff at the office’s headquarters who are dedicated to hiring and retention at the department. By this December, the LCO’s hiring and recruitment operations should be fully staffed, DIR said.
But it will be years before the labor office will be able to make the changes necessary to efficiently sort through the thousands of wage claims filed by Californians, according to the state audit.
Contributing to that timeline is a delayed classification study of the LCO’s employees who process wage claims. State auditors reported that DIR would complete the study by the summer of 2024.
But the study — which DIR said will lead to revised job duties and minimum qualifications as a way to retain employees and minimize the number of workers who seek jobs in other state agencies — is not complete.
“The extended timeline reflects our commitment to a thorough and accurate review, as we aim to ensure that we get this right,” said Charles Hamilton, a DIR spokesperson.
An increasingly complex process
For over a decade Daniela Urban has helped workers navigate the bureaucracy of the LCO as the founder and executive director of the Center for Workers’ Rights, an organization that provides representation to workers in the Sacramento region .
“As long as I’ve been doing these claims, there have been delays and there have been staffing shortages,” said Urban.
In meantime, Urban said, employment law in California has grown more expansive and complicated, which has increased the workload of deputy labor commissioners tasked with adjudicating the wage theft claims. Compared to state employees who handle similar cases, such as those at the California Unemployment Insurance Appeals Board, LCO officers’ jobs have grown more onerous over the years, Urban said.
The state’s multi-step process for processing claims that an employer has withheld wages or required laborers to work more hours than they’re compensated for begins at the LCO’s Wage Claim Adjudication Unit.
Within 30 days of the complaint, the state determines if a hearing is necessary to resolve the claim. If the worker and employer don’t agree to settle, the claim moves forward to a hearing.
Both sides of the complaint have the opportunity to present evidence at a hearing, which is supposed to occur within 120 days of the claim. A deputy labor commissioner makes a decision over the wage theft complaint, which employers can appeal or pay whatever is owed to the employee.
If the employer does neither, the LCO files an order with a Superior Court which then issues a judgment.
The Enforcement Unit, which is responsible for the payment collection, faces similar staffing challenges as the other branch of the LCO.
The state audit found that of the cases referred to the enforcement arm of the LCO between 2018 and 2023, the state successfully collected the entirety of unpaid wages 12% of the time.
Over the years, California has underfunded both the enforcement of wage protections units, Urban said. It has compounded into the current situation of underpaid and overworked public servants.
In January 2023, DIR put new expectations that each month hearings officers were to conduct between 30-40 “Berman” hearings, which is an informal adjudication process meant to quickly resolve disputes. The expectation was aimed at providing consistent guidance to employees across the state, the department said.
Reversing the vacancy rates
Urban has noticed recent improvements in the efficiency at which the state can clear claims. The state began to hold remote conferences in which workers can present their wage claims, which Urban said have helped to speed up the process.
The state has also conducted what it calls “concentrated conferences,” in which the LCO directs its staff’s efforts to process a high volume of claims in a short period of time. Urban said she didn’t see a drop in the quality of officers’ investigations when the LCO expedited cases through the concentrated conferences.
When asked, the state said it was still determining if this model improved the efficiency of processing claims.
“We will continue conducting thorough reviews of our internal procedures and take critical steps to streamline recruitment and strengthen our operations, all to better serve California’s workers,” Labor Commissioner Lilia García-Brower said in a statement.
To reverse the staffing challenges of the labor office, DIR began the process of studying its employees’ classification and compensation. Though the classification studies have been delayed, DIR expects to submit the compensation review to the California Department of Human Resources by this December.
DIR said the studies are essential tools to assess how competitive its roles are with other agencies. The audit completed earlier this year suggested discrepancies are contributing to the office’s high vacancy rates.
State auditors found that salaries for hearing officers, who preside over hearings, listen to witnesses, and issue decisions, was $4,000 per month less than that of administrative law judges who have similar qualifications and responsibilities. When auditors compared salaries of LCO employees to those with similar positions in other public sectors, it reported the state’s compensation isn’t competitive.
As a result, employees have sought promotions or transfers out of low-paying roles, the audit reported.
The union representing hearing officers urged the state to offer recruitment and retention incentive pay. Another strategy to financially encourage qualified applicants to join the labor division would be to hire new employees above the minimum pay for those positions.
While there’s no quick solution to the compensation challenges, these changes would be a step in the right direction, said Tim O’Connor, the president of California Attorneys, Administrative Law Judges and Hearing Officers in State Employment, which represents hundreds of employees at the LCO.
“The bottom line is: Find ways to offer more money, to get people into the job and to retain people in the job,” said O’Connor
The complaints California never hears
While the audit focused on issues at the state-level to investigate wage theft and enforce judgments, labor researchers suggest that the number of complaints that come to the state are far fewer than the number of instances of wage theft taking place in California.
A report from University of California, San Francisco and Harvard University researchers found that 41% of California workers reported they were forced to work off the clock, denied required overtime pay, not paid for hours worked or subjected to other serious labor violations.
Of those workers who experienced violations, 23% made a report. A fraction of that number went to local, state or federal authorities to report the labor law violations. Researchers said when workers approached their employers, they often faced reprisals such as being assigned bad shifts or less work overall.
Often, the vulnerable workers who are in most need of protection from wage theft are the least likely to report it, said David Weil, one of the report’s authors and a professor at Brandeis University’s Heller School for Social Policy and Management. Fears about immigration status and a lack of local and state officials who can speak the same language as the worker deter many from reporting stolen wages, Weil said.
The study, which surveyed nearly 1,000 workers in the largest firms of California’s food, retail and other service sectors, found employers regularly undermined protections outlined in the federal Fair Labor Standards Act.
“Progressive laws can be nice on paper,” said Weil. But “with progressive laws comes the need for more enforcement.”
Editor’s note: A previous version of this story incorrectly labeled the federal Fair Labor Standards Act as a state law.
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