How to Calculate Unpaid Wages Under California Labor Code

Under California labor law and broader wage and hours law, unpaid wages include far more than just missing hourly pay. When employers fail to fully and lawfully compensate workers, it may constitute wage theft, a serious violation of both state and federal protections.

Common examples include:

• Unpaid regular hourly wages
• Unpaid overtime or double time
• Missed meal or rest break premiums
• Unpaid commissions or bonuses
• Final paycheck violations
• Off-the-clock work
• Time sheets/timekeeping records and payroll errors

California’s wage protections are often stronger than federal standards under the Fair Labor Standards Act (FLSA), which is enforced by the Department of Labor. However, employers in California must comply with both state and federal law, whichever provides greater protection to employees.

According to the California Labor Code and guidance from the California Department of Industrial Relations, employers must pay employees for all hours worked, including time they “suffer or permit” employees to work—even if not officially authorized.

If your employer failed to pay you correctly in any of these categories, you may have a valid wage claim under California’s wage and hours law.

California Minimum Wage and Overtime Requirements

To understand how to calculate unpaid wages, you must first know the baseline requirements.

Minimum Wage Requirements

As of January 1, 2026, California’s statewide minimum wage is $16.90 per hour for all employers. The minimum wage adjusts annually based on the Consumer Price Index (CPI), capped at the lesser of 3.5% or the rate of inflation.

Important exceptions:

• Fast food workers (at chains with 60+ locations): $20.00/hour minimum
• Healthcare facility workers: $18.63–$25.00/hour, depending on facility type
• Local minimum wages: Many California cities have higher rates. For example, Los Angeles and other municipalities may require wages above the state minimum.

Always check if a higher local minimum wage applies to your work location.

📌 Note: California’s minimum wage increases each January 1st based on inflation. The rates mentioned in this article reflect 2026 standards.

Overtime Rules

In California, overtime is owed when:

• You work more than 8 hours a day (1.5x pay)
• You work more than 40 hours a week (1.5x pay)
• You work more than 12 hours a day (2x pay)
• You work 7 consecutive days in a workweek (special overtime rules apply)

Unlike federal law, California calculates overtime on a daily basis rather than weekly. This distinction is critical when calculating back pay.

How to Calculate Unpaid Regular Wages

Here’s a simple framework for calculating unpaid regular wages: 

Quick Formula: How to Calculate Unpaid Wages in California

Knowing how to calculate unpaid wages starts with breaking the claim into clear, measurable components. In California, unpaid wage claims often include regular wages, overtime, premium pay, bonuses, and penalties.

Step 1: Calculate Unpaid Regular Wages

Use this basic framework:

If you were paid below minimum wage, calculate the difference:

Example:
Minimum wage = $16.90/hour

You were paid = $15/hour

Hours worked = 30

$1.90 underpayment × 30 hours = $57 owed

Step 2: Add Overtime Pay

California overtime rules require:

• 1.5x pay for more than 8 hours/day or 40 hours/week
• 2x pay for more than 12 hours/day

If overtime was unpaid or miscalculated:

Overtime owed = (Correct overtime rate – Amount paid) × Overtime hours

Step 3: Add Meal and Rest Break Premiums

If your employer failed to provide legally compliant breaks:

• You are owed 1 additional hour of pay per violation
• Premium rate = your regular hourly rate

Example:
$22/hour × 15 missed breaks = $330 owed

Step 4: Include Bonuses and Commissions

Non-discretionary bonuses and commissions must be included in your regular rate when calculating overtime. If they were excluded, your overtime rate may have been underpaid.

Recalculate your regular rate:

Total weekly earnings ÷ Total hours worked = Correct regular rate
Correct regular rate × 1.5 (or 2) = Proper overtime rate

Step 5: Add Waiting Time Penalties (If Applicable)

If your final paycheck was delayed after termination:

Waiting Time Penalty = Daily wage × Days unpaid (up to 30 days)

Example:
Daily wage = $200
20 days late = $4,000 penalty

Total Wage Claim Formula

**Total Claim = Unpaid Regular Wages

• Overtime Differential
• Meal/Rest Premium Pay
• Bonus/Commission Adjustments
• Waiting Time Penalties**

Understanding these calculations is essential when determining how to calculate unpaid wages accurately before filing a claim. Even small underpayments, when compounded over weeks or months, can result in substantial recovery under California labor law.

Calculating Missed Meal and Rest Break Premiums

Let’s dive more into the details on missed meals and rest break premiums. 

California requires:

• 30-minute unpaid meal break for shifts over 5 hours
• 10-minute paid rest break for every 4 hours worked

If your employer fails to provide a compliant break, you are entitled to one additional hour of pay at your regular rate for each violation per day.

Example:

If your hourly rate is $22 and you missed a compliant meal break:

$22 x 1 hour = $22 owed for that day.

If this occurred 20 times:

$22 x 20 = $440 in break premiums alone.

Many employees underestimate these penalties when learning how to calculate unpaid wages, but they add up quickly.

Including Bonuses and Commissions in Wage Calculations

Non-discretionary bonuses and commissions must be included when calculating overtime rates.

For example:

If you earned:

• $800 in weekly wages
• $200 performance bonus
• Total = $1,000

And worked 50 hours that week:

Regular rate = $1,000 ÷ 50 hours = $20/hour

Overtime rate = $20 x 1.5 = $30/hour

If you were only paid overtime based on the minimum wage instead of your actual rate with bonuses included, you were underpaid.

Commission-based employees are often misclassified or miscalculated under California labor law, making professional review critical.

Adding Waiting Time Penalties to Your Claim

If your employer fails to provide your final paycheck on time after termination or resignation, you may be entitled to waiting time penalties under Labor Code § 203.

Penalty amount:

• Up to 30 days of your daily wage.

Example:

Daily wage: $200
Employer delays final check by 20 days
$200 x 20 = $4,000 penalty

These penalties can significantly increase the total value when calculating how to calculate unpaid wages in a full claim assessment.

For more details, review your options with an experienced employment lawyer in Los Angeles.

Evidence Needed to Prove Unpaid Wages

Strong documentation strengthens your case. Gather:

• Pay stubs
• Timecards or schedules
• Bank deposit records
• Written communications with the employer
• Employment contracts
• Personal notes tracking hours worked

Even if your employer failed to keep accurate records, courts may rely on your reasonable estimates.

If you believe your employer violated wage laws, a consultation with a top-rated labor law lawyer in Los Angeles can help evaluate your documentation and potential damages.

Statute of Limitations for Wage Claims

Time limits matter. Under California labor law:

• 3 years for most wage violations
• 4 years under unfair competition claims
• 1 year for certain penalty claims

If you delay, you risk losing the right to recover compensation.

Because calculating damages can be complex, understanding how to calculate unpaid wages early ensures you don’t miss filing deadlines.

Importance of a Labor Law Lawyer

Wage claims often involve more than simple math. Employers may:

• Misclassify employees as exempt
• Manipulate time records
• Retaliate against workers who complain
• Understate bonus-based overtime

An experienced attorney understands not just how to calculate unpaid wages, but also how to uncover hidden violations.

At Labor Law Advocates, our employment attorney in Los Angeles provides legal advice on:

• Unpaid overtime claims
• Minimum wage violations
• Meal and rest break cases
• Final paycheck disputes
• Commission disputes

Working with a top-rated California labor law lawyer in Los Angeles ensures your claim is calculated accurately, documented properly, and pursued aggressively.

You can learn more about your rights under our wage and hour violations services and related employment protections.

Frequently Asked Questions About Unpaid Wages