Making a living is hard, particularly if you work in a difficult job like manufacturing. It can be back-breaking work and you are entitled to every cent you earned. If you stayed late or agreed to work overnight shifts, then your employer must pay in accordance with all the terms and conditions of your employment as well as all applicable wage and hour laws. If you live in the state of California, Stop Unpaid Wages can help you recover that pay you are owed.

What is the Manufacturing Sector?

This is the employment sector of the national economy that employs people who manufacture or produce a variety of goods. The United States is the second largest manufacturer in the world (second only to China) with a financial output of $2 trillion in the first quarter of 2018. As of December 2017, this sector employs approximately 12.35 million people, which translates to about 8.8% of the total working population.

Manufacturing jobs are considered to be a form of physical labor and are usually done in factories. They frequently consist of tasks like loading raw materials onto production lines, assembling various goods, performing sub-assembly operations in conjunction with a machine, operating equipment by hand, transporting raw materials on pallet jacks, and inspecting the various products for any kind of mistakes in production or assembly. These jobs are almost always paid on an hourly basis in the range of $10.76 to $22.68 per hour. The average hourly rate nationwide is $15.05 per hour.

Despite some recent growth in the past few years, it has experienced a near-catastrophic decline in size since its peak in the 1970s. From 2001 to 2009, an estimated one-third (1/3) of manufacturing jobs disappeared from the United States.

This shrinking of the manufacturing sector is largely due to the fact that these jobs are being lost to overseas competitors like China. Companies have determined that it is more profitable to outsource their labor costs by paying significantly lower wages in these other countries. Because the profit margins are sometimes razor-thin, companies will frequently resort to unscrupulous business practices to maintain their bottom line. As a result, employees in this sector are more susceptible to “wage theft” than nearly any other sector in the United States.

The Right to Recover Unpaid Wages

Manufacturing employees, just like any other workers in this country, have every legal right to recover unpaid wages due to wage theft. In California, this is explicitly codified under the California Labor Code, Section 1194 LC. There is also the federal law known as the Fair Labor Standards Act (commonly referred to as the FLSA) that protects employees from wage theft. There are various means of recourse, all of which are best done with the help of an attorney who specializes in unpaid wages cases. This is largely due to the fact that there is a wide variety of laws on the books and any unpaid wages case may quickly overwhelm a person who is not specifically trained to deal with these types of cases.

The various labor laws that are in place are collectively known as “wage and hour laws”. These laws all consider wages to be a fundamental right of all workers and that the failure to pay these wages is an illegal act that is subject to various punitive measures. It is also considered to be in direct violation of the employment contract. The employee in question has the right to sue for and receive all unpaid wages owed to them (collectively known as “back pay”) as well as compensatory damages to cover other costs that have been incurred.

The employee may also file a complaint with several state or federal regulatory agencies that may impose fines on the offending employer. All of these actions are protected from retaliation under the California Labor Code, Section 98.6 LC (commonly known as the “whistleblower statute”).

What Is Wage Theft?

Wage theft can take various forms, including:

1. Failure to pay overtime (federal and/or state).
2. Failure to pay minimum wage (federal and/or state).
3. Failure to provide mandatory meals and/or breaks.
4. Requiring employees to work “off the clock” (either by explicitly requiring it or pressuring them to do so).
5. Claiming an employee is “exempt” so as to avoid paying premium rates.
6. Failure to provide paychecks in a timely manner.
7. Failure to pay bonuses and/or commissions (these are common in manufacturing in order to incentivize productivity).
8. Failure to pay vacation time (or “paid time off”) that has accumulated.
9. Failure to pay for work-related duties done outside the physical location of employment.

As you can see, wages encompass more than just the dollar amount rendered for each hour, or fraction thereof, of work done. They also encompass various benefits and actions that are protected under both federal and state laws.

For manufacturing employees, this is particularly important due to the higher possibility of being injured on the job. Working in a factory is significantly more dangerous than working in an office. This means that the health plans of employees must be protected from unscrupulous employers who may try to cheat them out of proper medical coverage.

It also means that mandatory meals and breaks must always be provided. If a person working on the assembly line becomes too tired to properly concentrate, this may have disastrous results. They may become injured, maimed, or even killed. Any workers further down the assembly line may also suffer serious bodily harm if the entire production system malfunctions.

This also means that the working conditions in the factory must always be up to standard and that the employer not cut corners in their operations budget. Various studies have shown that if an employer is shorting their employees on wages, they are most likely shorting the company in other areas as well. These actions may result in unsafe working conditions that likely need to be investigated by a regulatory agency as well as provide a strong basis for a liability lawsuit.

Shift Pay and the Manufacturing Sector

The manufacturing sector is primarily made up of employees who work in factories. Because of extensive competition from overseas production companies, the manufacturing sector in the United States has faced some serious challenges. Companies are constantly trying to find ways to maintain their productivity and remain profitable. This is doubly true following the Great Recession of 2008.

One such method has been to comprehensively adjust operation hours and the configuration of work shifts. There is tremendous overhead associated with operating a factory; power costs are extremely high to power all the machinery needed to manufacture the goods. Most factories are profitable if the machines are run on a continuous basis and there are rotating groups of employees to operate them (as well as managers to supervise them). There also need to be transportation workers to move the completed goods to distribution hubs.

Consequently, most manufacturing companies have adopted shift configurations that are atypical when compared to other employment sectors. They do this in order to maintain productivity and keep operation output high. For example, most “white collar” office work is done Monday through Friday, 9 AM to 6 PM. Facilities in the manufacturing sector, however, have adopted operating shifts that fall well outside these standard hours. This is also known as “rotating shift schedule” and financial analyses have determined that it has the potential to double productivity.

These shifts may start in the afternoon, usually at 4 PM, and end at night, usually at 12 AM. They are commonly known as “second shifts” or “swing shifts”. Overnight shifts are referred to as either “third shifts” or “graveyard shifts” and they usually begin at 12 AM and end at 8 AM. These are generally considered to be less desirable for a variety of reasons, not least among them the fact that an employee’s health and wellbeing may suffer from working these odd hours. It may also put a strain on the workers’ families as they are essentially working a schedule that is the exact opposite of everyone else, including any school-aged children they may have.

As a result, in order to entice employees to work this alternative schedule, many companies offer what is known as “shift pay”. This is a premium rate of pay that is calculated on top of the employee’s regular rate of pay. Because most manufacturing jobs are paid hourly wages, not salaries, this shift pay is calculated by adding some predetermined dollar amount to the base level wage. The difference between the regular rate and the premium rate is commonly referred to as a “shift differential”.

Shift pay is used in other employment sectors, though it is by far the most common in manufacturing and production with over eighty percent (80%) of companies offering some form of shift differential. Second shifts are usually seven and a half percent (7.5%) more than the regular rate of pay while third shifts are usually ten percent (10%) more than the regular rate of pay. These are just averages, however, and the specific shift differential depends on the arrangement with the employer. This arrangement is not required by labor law on either the federal or the state level, so this is up to the employer to decide whether they offer it or not.

The decision to pay shift differentials is determined by the arrangement between employer and employee. If it is a verbal agreement (or “implicit agreement”) then California labor law still considers this to be legally binding and requires employers to adhere to the terms of the agreement. A written agreement (or “explicit agreement”) is a kind of contract, meaning that the specific provisions of the shift differential structure are outlined therein. California labor law considers all valid contracts to be legally binding and that all parties subject to the contract act in good faith. Violation of any of these provisions is grounds for a formal complaint, lawsuit, or both.

Many manufacturing jobs are part of a union, meaning that the employees will have “collective bargaining”. This gives them a greater degree of power and more leverage in determining various factors of their term of employment. Union contracts will explicitly delineate any shift differentials as well as other provisions that the employer must follow. If the employer fails to do so, then the Department of Labor (also referred to as the DOL) could impose punitive measures under the federal law known as the Fair Labor Standards Act (also referred to as the FLSA).

The Garment Industry and Manufacturing

It should be noted that the garment industry is part of the overall manufacturing sector. This is particularly relevant for workers in California as Los Angeles is the largest manufacturer of garments in the entire country. Unfortunately, the garment industry is rife with wage theft and employer misconduct.

There are forty-five thousand (45,000) workers in the LA-based garment industry. Of this number, over seventy percent (70%) are immigrants, mostly from Mexico and Central America. Because these immigrants may have difficulties with the English language, or even not speak it all, as well as being nervous about their immigration status, unscrupulous companies are more likely to abuse them by not paying wages or withholding benefits and mandatory breaks.

In 2016, the Department of Labor investigated seventy-seven (77) garment manufacturers in Los Angeles and found that a shocking eighty-five percent (85%) of the time they committed one or more of these abuses. They also found that not only were they violating state minimum wage requirements, but they were also violating the federal minimum wage (which is far lower than the minimum wage in California and Los Angeles). This means that a good number of these workers were making half of what they should have been making per hour.

An industry watchdog known as the Garment Worker Center interviewed a large number of these workers, sixty percent (60%) of which complained about substandard working conditions as well as various wage and hour violations. Further investigations, done with over five-thousand (5,000) workers, found that the amount of total stolen wages was over eight million dollars ($8,000,000). Because of these shocking figures, an investigator declared that “Los Angeles is the wage theft capital of the country”.

Many of these workers do not know their rights or are afraid to speak out for fear of retaliation. It is important to note that state and federal labor laws protect all workers from wage theft. This extends even to undocumented workers, especially in California. Not only do the wage and hour laws protect them, but there are various State Assembly bills that make clear that at no point in the investigation process is a worker’s immigration status even considered. No investigator or regulator will even ask and everyone has the right to earn the money they worked so hard for.

Filing a Federal Complaint

You may file a federal complaint of a wage and hour violation with the Wage and Hour Division (widely known as the WHD) of the United States Department of Labor. This is the regulatory agency tasked with enforcing the FLSA. The district office for this agency is located in Los Angeles at 915 Wilshire Boulevard and its direct line is 213-894-6375.

The WHD will begin its investigation process, all the while keeping your identity and complaint totally confidential. This is to ensure that people feel confident to act as whistleblowers. As with any other step in the complaint process, it is absolutely imperative that you keep as much evidence as possible. Creating a paper trail that clearly indicates your employer’s misconduct will help the case immensely. This includes copies of pay stubs, records of how many hours you worked, or even notes you took while speaking to your supervisor about these issues. If you have misplaced these, then you should calculate out how much you are owed. Not having this paperwork does not necessarily mean that you will not win your case.

Under the FLSA, the WHD will then oversee the payment of your unpaid wages. The Secretary of Labor (also known as the Labor Commissioner) may also file a lawsuit on your behalf to recover said wages as well as an equal amount in liquidated damages. You will also be entitled to have your attorney’s fees and court costs covered by the offending party. Furthermore, the Labor Commissioner may also get a court injunction to keep the offending party from further violating the FLSA, including the failure to pay your minimum wage and/or overtime rates.  

You will always be protected from retaliation. This misconduct usually takes the form of “wrongful termination”, or the unlawful firing of an employee, though it may also consist of a demotion, a reduction in pay, harassment, or the creation of a hostile work environment. When the employee feels that they have to quit due to employer mistreatment, this is known as “constructive discharge” and is also illegal under wage and hour laws.

Even if your complaint is ultimately dropped because the investigation determined that the employer did not violate wage and hour laws, if they retaliated against you because you lodged a complaint then they will be held liable for that action. You will have grounds for a separate lawsuit beyond just unpaid wages and you may be entitled to significant compensation for pain and suffering. In this case, you must get a labor lawyer to help you develop your case and increase your chances of securing said compensation.

You have two (2) years from the date of misconduct to file for the recovery of back pay. This is assuming that your employer acted in good faith, meaning that your unpaid wages were an honest mistake. If it was a malicious act, meaning that your employer knowingly and willfully withheld your pay, then you have three (3) years to seek your unpaid wages.

Your employer may also face significant penalties, including one-thousand dollars ($1,000) each time they violated the minimum wage and/or overtime provisions. This fine will be leveled for each violation, not cumulatively, meaning that the final penalties can be astronomical for the company.  If they maliciously and/or willfully violated the FLSA, then they may be subjected to criminal charges, prosecution, and a fine of ten thousand dollars ($10,000) for each instance. If it is their second conviction for the willful violation of the FLSA, they may face prison time.

Filing a State Complaint

All of these various wage and hour violations are also prohibited under California labor laws. You may file multiple complaints simultaneously while also pursuing a private lawsuit concurrently. Your unpaid wages lawyer will advise you on how best to approach the overall case and can help you navigate the various ins and outs of the overlapping laws and statutes.

The state of California also has a Labor Commissioner who is tasked with investigating and prosecuting wage and hour law violations. There is a district office in Los Angeles, located at 320 West 4th Street, Suite 450. They may also be reached by phone at 213-620-6330.

Because wage theft in the garment industry is so rampant in Los Angeles and California, the Department of Labor’s website has a specific form known as the “Garment Initial Claim”. This is geared specifically for garment industry workers who have suffered malfeasance and misconduct from their employers. This can include failure to pay overtime, failure to pay minimum wage, and/or failure to provide compulsory breaks and meals.

Following the shocking results of the investigation in 2016, California regulators take these claims very seriously. There has been a widespread effort to overhaul the entire industry and to keep these various manufacturing companies accountable. Furthermore, because most of the employees in question are Hispanic immigrants, there is also a consensus that they are more vulnerable to abuse and misconduct.

Following the initial complaint, the claim will go to what is known as a “settlement conference”. A deputy from the state Department of Labor will help you interface with your employer to see if you may be able to reach a settlement agreement. It is important to remember that this deputy is there to help you and to serve your interests. Furthermore, you should also have an unpaid wages lawyer working with you and the deputy to give you the best chance of receiving your back pay and any additional damages. 

If this settlement agreement is not satisfactory to you, then your claim will go to a hearing. The Labor Commissioner will hear your case and review any evidence you supply. Again, having an unpaid wages lawyer at this point greatly increases your chances of winning the case. The commissioner will make a decision and issue an “Order, Decision or Award” (known commonly as an ODA) that will specify the terms of repayment (if any). If either party does not file an appeal within fifteen (15) days, then the ODA becomes official, final, and legally binding.

Is There An Unpaid Wages Lawyer Near Me?

Wage theft is unfortunately common in the manufacturing sector. It is unfair and unjust that unscrupulous companies are not held accountable for stealing from their employees. Stop Unpaid Wages can help you fight back against dishonest employers in California. Reach our unpaid wage attorney at 424-781-8411 and receive a free consultation.