How Do I Appeal a Labor Commissioner Decision In California?

What is a DLSE Complaint?

When employees file a claim with the DLSE, their grievance is often referred to as a “DLSE complaint.” Workers in California file these claims for a wide range of alleged reasons, and they begin the claim process. Next, the Labor Commissioner decides on the complaint, resulting in an ODA ruling. At this point, both parties can challenge the ruling with an appeal.

What are some main reasons California workers file complaints with the DLSE?

• Workers attest that they do not receive the correct payment amount
• Workers claim that their employer violates the terms of their contract
• Employees claim that they make less than the state’s minimum wage
• Employees attest that the owner, or their manager, is confiscating their tips
• Workers try depositing their paychecks, which are invalid and “bounce.”

When an employee files a complaint, it is up to the DLSE to investigate the details and circumstances of the grievance and move forward with a decision. If the DLSE thinks the claim has merit, they may very well make a favorable decision for the worker.

In this case, the employer can appeal the decision. However, for an employer to successfully appeal an ODA by the DLSE, they need to make a strong claim backed by evidence and present it in a convincing, professional manner. Typically, the worker has the advantage in this case, and it is wise for California employers to consult with an experienced attorney regarding their appeal.

What Are Additional Reasons for Employee Complaints?

In addition to the reasons listed above, California employees have other reasons for filing DLSE complaints. These include:

• Unpaid wages
• Unreimbursed work-related expenses
• Employer penalties
• Unpaid interest

California workers must be aware that if their employer does not pay them correctly for their hours worked, they can file an administrative complaint with the Labor Commissioner’s office (also known as the DLSE).

In some cases, the DLSE does not receive enough evidence to settle the claim, and they refer the case to the Deputy Labor Commissioner, who holds a hearing that involves both parties.

While workers and employers can challenge the Labor Commissioner’s decisions, this choice is typically more risky and difficult for businesses. California wants wage claim proceedings to move quickly, allowing little room for dispute. Additionally, when employers unsuccessfully appeal the DLSE’s decisions, they stand to lose money and waste time on the proceedings.

What is the Wage Claim Process?

The wage claim process consists of several steps. First, a worker files a detailed complaint with the DLSE. Next, the DLSE acknowledges receipt of the complaint and soon schedules a conference with the employer and the worker. This conference occurs before a hearing, and parties are meant to discuss possibilities for settlement or finalize the complaint.

Sometimes, the parties settle the issue at the conference, and all parties avoid the next step: a formal hearing. However, most of the time, the individual who filed the claim is serious about their accusations and wants to take their complaint to the next level. In this case, a new deputy conducts a hearing and reviews the evidence. While retaining an attorney for this hearing is not required, many parties decide to consult with their legal representatives. While the hearing is more formal than the conference that precedes it, it is also less formal. This lack of formality means that the deputy allows the hearing to be more flexible than procedural and provides more opportunity for discussion among parties.

Following the hearing, the attending deputy makes a decision. The written decision includes the following:

• A summary of the events of the hearing
• Justification for the deputy’s decision
• Summary of the financial reward (if one is awarded).

What Are the Risks of Appealing the Labor Commissioner’s Decisions?

After the Labor Commissioner makes a decision, both parties have options. After the order is served, either party can appeal the decision of the DLSE within 15 days from the date they mail the order. If the DLSE serves the order from outside the state, both parties have an additional five days to appeal. Notably, this time limit is strictly enforced, and the DLSE will not accept appeals filed outside of this range.

When one party appeals, the process differs slightly from traditional legal appeals. For example, if a company appeals to the DLSE’s decision to grant a worker a certain amount of backpay, the case goes straight to a superior court judge. This judge does not consider the Labor Commissioner’s earlier decision and considers the evidence and the appeal from a fresh and new perspective. Plus, both parties can present new evidence. However, in this hearing, the court operates more formally than in the prior hearing with the DLSE.

While sometimes it makes sense for employers to appeal the DLSE’s decision, especially if it is financially damaging, California businesses cannot ignore the inherent risks in such an appeal. Below, we list the main risks that face employers who wish to appeal the state Labor Commissioner’s decision:

• The employer must guarantee the award amount and do so within the appeal’s timeframe. This requirement means that the employer needs to get an expensive bond premium and file it simultaneously as an appeal.

• The employer risks paying more than they originally thought because the superior court may find that they owe more (or less) money to the employee who filed the complaint.

• The employer must pay all legal costs, as opposed to the worker, who usually is provided a lawyer from the DLSE as needed. The employer may have to pay the worker’s legal fees, too.

• The employer must take interest into account. Higher interest means that if the employer loses the appeal, they may have to pay more even if the amount they owe the employee did not increase.

Do Employers Have to Pay the Employee’s Legal Fees?

As stated, one of the most significant risks for California employers appealing the Labor Commissioner decides that they may have to pay the worker’s legal fees.

While some workers do not retain private attorneys, the court often charges legal fees, even if the DLSE gives the worker an attorney. In fact, the legal fees often exceed the initial wage claim amount, so employers seeking an appeal should make their decision carefully.

Recently, California’s courts have decided that unless the company’s appeal is 100% successful, the company must pay the worker’s legal fees.

All of these notable costs must be considered and totaled before employers decide it makes financial sense to appeal a decision by the Labor Commissioner.

Should Employers Appeal the DLSE’s Decision?

Employers should be cautious about appealing the DLSE’s decisions. When the evidence is strong, they may win the case, but they should be honest about their expectations and what they hope to gain. In some cases, an appeal may result in the company paying more than it would have if it simply stuck with the Labor Commissioner’s decision.

Of course, when employers feel that a worker is taking advantage of the system or their reputation is at stake, they may feel compelled to act. When employers are certain that they did not, for example, make any payment mistakes and have evidence to back up their claims, appealing an errant decision may be the right choice.

We suggest that employers take the time to review the dissatisfied worker’s claims and the initial verdict from the DLSE. Then, if there is an opportunity to settle before a formal hearing occurs, the employer should weigh those options. Sometimes, settling the issue with the worker allows both parties to move on without the extra baggage or financial strain that the appeals process creates.

When the option for a conference with the Labor Commissioner presents itself, employers should be aware that this may be an opportune chance for settlement without any lasting company damage. For example, if the DLSE suggests that the employee’s claim has merit, it may make sense for the company to pay the suggested fines or money owed and move on.

However, sometimes settlement at the conference stage is not an option. Companies should put their best foot forward when the claim is due for a hearing. They should hire a skilled attorney if they do not already have an experienced legal team. Employers should not focus on an inevitable appeal. Rather, they could set their sights on winning the case and clearing their name.

When the DLSE’s decision comes down, the company must act quickly. First, the employer should consult with their team to decide if they agree with the verdict and if they should file an appeal. At this point, the employer must consider all financial and otherwise risks inherent in the appeals process. If the employer decides to take their chances with the appeal, they must fill out the appropriate documents promptly since they only have 10-15 days to do so, depending.

In rare circumstances, employers decide that they wish to consider arbitration. Many do so because they do not think the DLSE will behave fairly or favorably. However, arbitration can prove just as expensive as an appeal, based on the cost of paying an arbitrator and other fees. This process can also be time-consuming since one must locate an arbitrator the employer wants to work with and respect.

Lastly, the arbitration will not exempt employers from paying legal fees. Therefore, the employer may still have to pay the worker’s legal fees, even during or after the arbitration process.

How Can an Experienced Attorney Help An Employer Appeal a Labor Commissioner’s Decision?

Everyone, from employers to employees, to the Labor Commissioner, makes mistakes sometimes. Often, these errant decisions result in contentious hearings between California’s workers and their employers.

Our legal team also knows that sometimes, employees file inaccurate grievances. When employees file inaccurate complaints, companies must make difficult decisions. Our California business lawyers and corporate attorneys have advised many businesses regarding DLSE appeals.

Our attorneys will be realistic with you from the start about your chances. Our goal is to protect employers when workplace issues arise, so contact Nakase Wade for a free consultation today.