A derivative penalty is a secondary fine triggered when a primary violation—like a missed lunch—is not corrected or paid. While a missed lunch might only cost $25 in "Primary Wages," the failure to pay that premium on a final paycheck can trigger a "Waiting Time Penalty" of up to $6,000 per employee. Our data shows that 85% of a typical practice's exposure sits in these derivative categories rather than the actual unpaid wages.

The California Supreme Court ruled in Naranjo that meal and rest period premiums are officially "wages". This means if a premium isn't paid, it creates an "inaccurate wage statement," which triggers additional penalties for every single paystub issued thereafter.

Yes, under the 2024 PAGA reforms. If an employer takes "all reasonable steps"—which includes performing a forensic audit, implementing technology-enforced lockouts, and issuing backpay—they can effectively "cap" or eliminate civil penalties. We specialize in preparing the documentation required to meet this "reasonable steps" standard.

California law requires a 30-minute unpaid meal break before an employee works more than 5.00 hours. If an employee clocks in for lunch at 5:01, you owe them a "penalty hour" of pay. We help businesses implement "Hard-Lock" alerts at 4 hours and 30 minutes to ensure staff are off the floor before the violation occurs.

Yes. Under CA Labor Code § 226.2, "piece-rate" or production-based employees must be paid a separate, hourly rate for rest periods and "non-productive" time. High commission rates do not legally "cover" these breaks; if your paystubs don't show a separate line item for rest period pay, you are likely accruing wage statement penalties.

California uses the Borello Test to determine if you have "Right of Control" over a contractor. If the practice sets the hours, provides the equipment, and controls the patient flow, the state may reclassify them as employees. This can lead to back taxes, workers' comp liability, and PAGA penalties.