A Short Course on Labor Commissioner Hearings

Those of you familiar with this publication know that most of our articles deal with substantive issues in the area of employment law. In this article, we depart from that motif in order to provide a brief primer on a type of administrative proceeding that many of you may eventually have to face—cases before the California Labor Commissioner. Because these cases are relatively informal (and often involve low dollar amounts), it is not unusual to see both employees and employers handling the matters without the assistance of counsel. Given that, knowledge of the basics is desirable.

Who Is The Labor Commissioner?
The California Division of Labor Standards Enforcement (DLSE) is the state agency responsible for enforcing statutes, regulations, and orders pertaining to employee wages, hours, and working conditions. The DLSE is also the default organization for enforcement of all California labor laws when such enforcement is not explicitly delegated to another agency or entity. The DLSE’s executive officer is known as the Labor Commissioner. Upon receipt of a claim by an employee or representative thereof, the Labor Commissioner must (through DLSE employees and agents) investigate and take appropriate action against the employer. Such claims are often for items such as failure to pay overtime, failure to timely pay wages on termination, or failure to provide required benefits. However, given the breadth of DLSE responsibility, the range of issues brought before the commissioner is vast.

In conducting necessary investigations into employee claims, the commissioner has unlimited access to all workplaces within California, and any person who fails to cooperate in allowing such access or furnishing required information is guilty of a misdemeanor. The commissioner also possesses court-enforced subpoena power as to both documents and witnesses. Therefore, the Labor Commissioner and his agents may literally be thought of as the “employment police.”

How Do Proceedings Before The Labor Commissioner Work?
As stated, the Labor Commissioner has authority to investigate employee complaints and, depending on the issues raised via a complaint, may provide for a hearing. Actions involving wage recovery claims usually proceed through the hearing process.

After an employee files a complaint, the Labor Commissioner must—within 30 days—notify both the employee and employer regarding whether any further action will be taken. The commissioner can do one of three things. First, he can decide that the employee’s claim is facially meritless, and take no action. In such a case, no employer action is required, and the commissioner will transmit a letter to the parties indicating that the investigation has been completed. Second, and at the opposite end of the spectrum, the commissioner can himself pursue a civil action against the employer.

The third option is for the Labor Commissioner to hold an administrative hearing on the matter. If the commissioner chooses this option, he will notify the parties of the time and place of the hearing. Generally, the hearing must be held within 90 days of the commissioner’s notification. While the hearing may be postponed or continued if the commissioner finds the interests of justice warrant additional time, employers should in many cases think carefully before proposing or agreeing to a postponement. As noted above, many employee claims involve allegedly unpaid wages; in assessing back pay on a successful claim, the commissioner must calculate the amount of such pay from the time the claim is filed, not the date of the hearing. Thus, so long as an employer is prepared to substantively defend an employee’s claim, sooner is better. It should also be noted that an initial conference between the parties and the Deputy Labor Commissioner often takes place several weeks before the evidentiary hearing. At that meeting, the parties generally present their positions in an attempt to settle the matter. If no settlement is reached at or after that meeting, the evidentiary hearing will go forward.

The hearing itself is relatively informal. It is generally conducted in a conference room, not a courtroom, and is held before the Deputy Labor Commissioner, not a judge. Each party may call witnesses and present evidence. Hearings lasting more than a few hours are rare. Following the hearing, the Labor Commissioner will issue a written decision on the matter. A copy of that decision must be filed with the DLSE and served on the parties within 15 days after the conclusion of the hearing. As with a normal civil case, the commissioner’s decision can award the employee all, some, or none of the sought-after relief. This can include penalties and will include interest where back pay is awarded. The decision must include a statement of reasons supporting the result.

What Happens After The Labor Commissioner’s Decision Is Issued?
The Labor Commissioner’s decision must apprise the parties of their right to appeal the decision. If no appeal is taken, the commissioner’s decision becomes final. If either party wishes to appeal, they must do so within 10 days of the commissioner’s service of the decision. The appeal does not get submitted to another level of Labor Commissioner/DLSE review; instead, the matter is heard “de novo” in the appropriate California superior court. De novo review means that the matter is independently addressed by the superior court, and no deference is given to the Labor Commissioner’s ruling. If the employer appeals the commissioner’s award to an employee, it must post an undertaking in the full amount of the award. In the course of an appeal, the Labor Commissioner is permitted to represent employees who are unable to pay for an attorney.

If the losing party’s appeal is unsuccessful, the court may award the other party the attorneys’ fees and costs it incurred in defending the appeal. In cases where an employer appeals a decision and has the Labor Commissioner’s award reduced, the court may nonetheless give attorneys’ fees and costs to the employee so long as the court’s judgment does not completely negate the commissioner’s award. Indeed, for purposes of fees and costs on appeal, the governing statute (Labor Code section 98.2) goes so far as to say that an employee “is successful if the court awards an amount greater than zero.”

Proceedings before the Labor Commissioner are sufficiently common that employers should take care to educate themselves as to the fundamentals. The above discussion gives you some sense of what you may expect should you find yourself on the business end of an employee’s claim. For additional information on Labor Commissioner proceedings, you may visit the DLSE’s website at