“We Didn’t Authorize It, So We Don’t Have to Pay for It” — California Disagrees
Off-the-clock work is one of the most common and most expensive wage-and-hour problems California SMBs face, and it is frequently invisible until the demand letter arrives. The employer believes the rule is simple: if I did not authorize the work, I do not owe wages for it. California does not work that way.
Under Labor Code section 510 and the applicable Industrial Welfare Commission Wage Orders, an employer who knows or reasonably should know that an employee is performing work must pay for it, regardless of whether the employer authorized the work in advance. The knowledge standard is the operative test, not the authorization standard. An employer cannot design a system that makes it easy for off-the-clock work to occur, then disclaim knowledge when it does.
The most common failure modes are structural. Automatic meal-period deductions fire at a preset time even when the employee worked through the break, and the correction process depends on the employee proactively flagging the error. Remote and hybrid work has made this worse, because after-hours emails, Slack messages, and system logins are timestamped and visible to the employer in the aggregate, even when no individual manager is watching. A 2021 California Supreme Court decision established that when meal period records appear clean, the burden shifts to the employer to prove compliance, not the reverse.
The practical problem for SMBs is that these failures accumulate quietly across a workforce over months and years before anyone brings a claim. When they surface, the exposure is calculated per employee per pay period, and the California statute of limitations allows employees to reach back three years for unpaid wages, with one additional year for willful violations.
Auditing the timekeeping system is the right starting point. The audit looks at whether the automatic deduction logic matches actual break practice, whether the correction process is realistic and used, and whether remote workers’ activity patterns suggest compensable work the payroll records do not reflect.
If you want to know where your business stands, contact Michael Trust Law for a no-charge initial consultation. The facts determine what needs to be addressed — and how much of a conversation that takes.
This post shares general information based on common patterns I see in California workplaces. It is not legal advice, does not create an attorney-client relationship, and outcomes depend on specific facts. No lawyer can guarantee a result. Past results do not guarantee or predict future outcomes. AI may have been used to create this post. All content reviewed by a CA attorney before publication.