Updated October 2026 · 6 min read
California Labor Code §1194 gives any employee who was paid less than the legal minimum wage or legal overtime the right to sue for the unpaid balance, plus interest, reasonable attorney’s fees and costs, no matter what the employee agreed to; Labor Code §1194.2 adds liquidated damages equal to the unpaid minimum wages, but not unpaid overtime. Together they are the main tools for recovering underpaid wages in court.
Liquidated damages can double a minimum wage recovery. A worker paid $15 an hour instead of the 2026 state minimum of $16.90 for 30 hours a week over 20 weeks is short $1,140, and §1194.2 generally adds another $1,140 on top, plus interest and attorney’s fees.
This page explains what each section says, who is covered, how the numbers work, what the employer can argue, deadlines and where to file. For practical steps on overtime claims, see our guide on how to claim unpaid overtime in California.
- Labor Code §1194 lets you sue for unpaid minimum wage or overtime, plus interest, reasonable attorney’s fees and costs.
- It applies “notwithstanding any agreement” to work for less, so flat rates and “all-inclusive” salaries do not waive your rights.
- Labor Code §1194.2 adds liquidated damages equal to unpaid minimum wages, which effectively doubles them. It does not apply to overtime.
- An employer can reduce or avoid liquidated damages only by proving good faith and reasonable grounds.
- Most claims must be brought within three years, or up to four in some court cases.
What Labor Code §1194 says
Section 1194(a) is one sentence. It provides that “notwithstanding any agreement to work for a lesser wage,” any employee receiving less than the legal minimum wage or the legal overtime compensation is entitled to recover in a civil action:
- the unpaid balance of the full minimum wage or overtime,
- interest on that amount,
- reasonable attorney’s fees, and
- costs of suit.
The opening phrase matters most. You cannot sign away your right to minimum wage or overtime. A “flat day rate,” a salary that “covers everything,” or an agreement to accept less does not stop you from recovering the difference. Subdivision (b) simply makes the 1991 amendments apply to cases filed on or after January 1, 1992.
What Labor Code §1194.2 adds: liquidated damages
Section 1194.2(a) says that in an action under Labor Code §98 (a Labor Commissioner claim), §1193.6, §1194 or §1197.1 to recover wages “because of the payment of a wage less than the minimum wage,” the employee is entitled to liquidated damages equal to the unpaid wages and interest thereon. In effect, unpaid minimum wages are doubled.
Three limits are written into the statute:
- Minimum wage only. The statute says it does not authorize “the recovery of liquidated damages for failure to pay overtime compensation.”
- Good-faith defense. Under subdivision (b), if the employer shows the court or the Labor Commissioner that it acted in good faith and had reasonable grounds to believe it was not violating the minimum wage laws, the court or Labor Commissioner may refuse to award liquidated damages or award less than the full amount.
- Same deadline as the wages. A claim for liquidated damages may be filed any time before the statute of limitations runs on the underlying wage claim.
Who is covered, and which minimum wage applies
Section 1194 covers employees, whether paid hourly, by salary, piece rate or commission, who are entitled to minimum wage or overtime under the Labor Code or the Industrial Welfare Commission (IWC) Wage Orders. Exempt employees who truly meet the salary and duties tests are not owed overtime, but if you were misclassified, §1194 is how you recover it. See our page on misclassification as exempt.
Under Labor Code §1197, the minimum wage is the one set by the IWC “or by any applicable state or local law.” That includes:
| Minimum wage | 2026 rate | Notes |
|---|---|---|
| California state minimum wage | $16.90 an hour | Rises to $17.40 on January 1, 2027 |
| Fast food (national chains) | $20.00 an hour | Limited-service restaurants in chains with more than 60 establishments nationally (Labor Code §1474 and following) |
| Health care workers | Varies by facility type | Labor Code §1182.14 and following; see our health care minimum wage guide |
| City and county minimum wages | Varies by location | See California minimum wage by city |
Many local ordinances also have their own enforcement procedures and remedies, which may apply alongside state law.
You may be able to recover the unpaid wages, interest and attorney’s fees, and in minimum wage cases an equal amount in liquidated damages. Get a free, confidential case review.
Worked examples
💡 Example (hypothetical): Rosa is paid $15 an hour in 2026 for 30 hours a week over 20 weeks. The state minimum is $16.90, so she is short $1.90 an hour. Unpaid minimum wages: $1.90 × 30 × 20 = $1,140. Liquidated damages under §1194.2 equal the unpaid wages: another $1,140, for a total of $2,280, plus interest and her attorney’s fees and costs under §1194, unless the employer proves good faith and reasonable grounds.
💡 Example (hypothetical): Tom earns $22 an hour and works 5 hours of overtime a week for 40 weeks, but his employer pays straight time for those hours. He already received $22 for each overtime hour, so he is owed the missing half-time premium: $11 × 5 × 40 = $2,200, plus interest, attorney’s fees and costs. Because this is overtime, not minimum wage, §1194.2 liquidated damages do not apply.
Run your own numbers with our wage and hour calculator.
Interest and attorney’s fees
Interest. Labor Code §218.6 requires the court to award interest on unpaid wages at the rate in Civil Code §3289(b), which is 10% per year, running from the date each paycheck was due.
Attorney’s fees. Section 1194 lets a successful employee recover reasonable attorney’s fees and costs. California’s general fee statute for wage cases, Labor Code §218.5, states that it “does not apply to any cause of action for which attorney’s fees are recoverable under Section 1194.” In practice, that means §1194 claims are generally treated as one-way fee claims that favor the employee, which is a key reason many wage lawyers can take minimum wage and overtime cases.
Other remedies that often come with a §1194 claim
- Waiting time penalties under Labor Code §203, up to 30 days of wages, if you have left the job and wages were willfully unpaid. See final paycheck rules.
- Wage statement penalties under Labor Code §226 for inaccurate pay stubs.
- Labor Commissioner citations under Labor Code §1197.1: $100 per underpaid employee per pay period for an intentional initial minimum wage violation and $250 for each subsequent violation, plus wages and liquidated damages.
- Civil penalties under Labor Code §558 for overtime violations, recoverable by the Labor Commissioner or through PAGA.
- Personal liability. Under Labor Code §558.1, an owner, director, officer or managing agent who causes a §1194 violation can be held liable as the employer.
Deadlines
Claims for unpaid minimum wage and overtime are claims on “a liability created by statute,” so the general deadline is three years under Code of Civil Procedure §338(a). The Labor Commissioner’s Office also lists minimum wage and overtime among its three-year claims. Liquidated damages follow the same deadline as the wages (§1194.2(a)). In court, the Unfair Competition Law can reach back four years for restitution of unpaid wages (Business and Professions Code §17208).
Where to file
| Option | What you can recover | Law |
|---|---|---|
| Labor Commissioner wage claim | Unpaid wages, liquidated damages for minimum wage claims, waiting time penalties; free hearing | Labor Code §§98, 1194.2 |
| Lawsuit in superior court | Wages, interest, liquidated damages, attorney’s fees and costs; class actions possible | Labor Code §§1194, 1194.2 |
| Arbitration | The same individual remedies, if you signed an enforceable agreement | Your agreement |
Compare the options in our article on Labor Commissioner claims versus hiring a lawyer.
Related Labor Code sections
- §510: overtime rates.
- §1182.12 and §1197: the state minimum wage and the duty to pay it.
- §1197.1: Labor Commissioner citations for minimum wage violations.
- §218.5 and §218.6: attorney’s fees and interest in wage cases.
- §98: Labor Commissioner wage claims and hearings.
Frequently asked questions
What is Labor Code 1194?
It is the California statute that lets an employee who was paid less than minimum wage or overtime sue for the unpaid amount, plus interest, reasonable attorney’s fees and costs, even if the employee agreed to accept less.
Can I get double damages for unpaid overtime in California?
Not under §1194.2. Liquidated damages equal to the unpaid wages are available only for unpaid minimum wages. Overtime claims carry interest, attorney’s fees and other penalties instead.
Can my employer avoid liquidated damages?
Only by proving good faith and reasonable grounds for believing it was not violating the minimum wage laws. Even then, the court or Labor Commissioner decides whether to reduce or deny them.
I agreed to a flat daily rate. Can I still sue?
Yes. Section 1194 applies “notwithstanding any agreement to work for a lesser wage.” If the flat rate worked out to less than minimum wage or did not cover overtime, you can recover the difference.
How long do I have to file?
Generally three years from each underpaid payday (Code of Civil Procedure §338(a)), and up to four years for restitution under the Unfair Competition Law in court.
Related guides
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This article provides general information about California law and is not legal advice for any specific situation. Reading it does not create an attorney-client relationship. Past results do not guarantee a similar outcome.
