Despite the many legal protections for workers, wage and hour violations remain a widespread problem across multiple industries.
Disputes that arise from these violations often lead to litigation, yet the vast majority of cases never make it to trial. Almost all cases settle out of court—but often only after a long, costly process that takes a toll on everyone involved.
As a professional mediator, I see a better way. Mediation is a practical and human-centered tool for resolving wage and hour disputes. It offers workers a faster path to justice while helping employers reduce risk, control costs, and maintain a stable workplace.
The true cost of wage and hour violations—and litigation
Wage theft, the broad term for wage and hour violations, occurs when a worker does not receive payment they are entitled to—wages they were promised and/or what is legally required. Common examples include minimum wage violations, unpaid overtime, off-the-clock work, time sheet discrepancies, illegal deductions, employee misclassification, and denial of meal or rest breaks.
A May 2024 Rutgers University report found that workers in four California metropolitan areas lose an estimated $2.3 to $4.6 billion annually due to minimum wage violations. Los Angeles accounts for the largest share, with $1.6 to $2.5 billion lost each year. On average, underpaid workers lose about 20% of their wages—nearly $4,000 annually for a full-time worker.
These disputes can be both complex and subtle, requiring intricate calculations and an understanding of industry practices. They are especially common in industries such as healthcare, nursing homes and restaurants, where recordkeeping can be inconsistent and working conditions make violations difficult to document.
For many workers—disproportionately women, people of color and immigrants—the barriers to recovery are steep. Fear of retaliation, language differences, or reliance on a single paycheck may prevent them from speaking up. At the same time, employers face protracted legal battles, mounting legal fees and reputational risk.
Unfortunately, California’s enforcement system is under significant strain. According to CalMatters, the Labor Commissioner’s Office has a backlog of 47,000 wage theft claims, with cases taking up to six times longer to resolve than the law requires. Even when judgments are entered, many workers wait years for payment, with only 12% of 2017 judgments fully satisfied after five years.
In this environment, litigation can feel like a lose-lose scenario—for workers, for employers, and for the already overburdened courts.
Mediation as a smarter path
Mediation offers an alternative: a pragmatic, flexible ADR process in which a neutral mediator facilitates negotiations outside the rigidity of court. Any resulting agreement is legally binding but crafted by the parties themselves, making it more durable than court-imposed outcomes.
Beyond efficiency, mediation has the potential to address the human dynamics that litigation often overlooks. A skilled mediator works to uncover underlying concerns, clarify misunderstandings, and identify sustainable solutions that serve both sides.
Wage and hour claims are especially suitable for early mediation, as employees are entitled to payroll and time records upon reasonable request under the Labor Code and Wage Orders.
My own journey into mediation was shaped by years of working as a paralegal, and seeing the challenges of litigation firsthand—its cost, inefficiency, and toll on all parties. With a master’s degree in dispute resolution and negotiation, I became committed to helping workers and employers find fair, timely, and less adversarial solutions.
In practice, I hold pre-mediation conferences to ensure every party feels heard, creating a foundation for productive dialogue. The goal is not just to avoid trial, but to help both employees and employers walk away with a resolution they see as fair and equitable.
Confidentiality is another key benefit. If mediation does not result in an agreement, the parties can proceed with litigation without compromising their legal positions.
Coming to the table, not to the courtroom, often streamlines a resolution. Calmer and intentionally less contentious can be quicker and far more cost-effective.
As Mona R. Shah of USC’s Gould School of Law has observed, “Our judicial system is at capacity, and mediation has been an effective tool in resolving issues, or even full-on cases, before lengthy trials start. It has helped an already strained state judiciary in one of the most litigious states in the country.”
Making a Difference with Mediation
For mediation to realize its full potential in wage and hour disputes, several key shifts must take place. First, referrals to mediation should occur at the earliest stages of a conflict, before litigation costs escalate and parties become entrenched in their positions. Because these cases often involve complex wage calculations and statutory obligations, it is also important that mediators have specialized training in labor and employment law, ensuring they can navigate the technical aspects with confidence and accuracy.
Attorney buy-in is equally critical. When litigators on both sides recognize mediation not as a detour but as a strategic tool, they can help streamline cases, reduce risk, and deliver faster, more satisfying outcomes for their clients. Employers, too, need greater awareness of the benefits. For small and mid-sized businesses—particularly in high-risk industries such as health care and restaurants—mediation offers a way to minimize liability, preserve stability, and reduce costly distractions from daily operations.
Institutional support is another necessary component. Court mandates for early mediation, agency partnerships, and streamlined referral programs would help normalize mediation as a default step in resolving wage and hour disputes. Finally, a cultural shift is needed—one that moves away from an adversarial mindset and toward a more collaborative approach. By reframing disputes as opportunities for problem-solving, parties can reach fair and equitable resolutions while preserving relationships and strengthening trust in the legal process.
Mediation is not a cure-all, but it offers a faster, more balanced, and more humane way to resolve wage and hour disputes. Workers gain access to justice, employers reduce financial and reputational strain, and courts benefit from a lighter caseload.
At its best, mediation offers a streamlined path to resolution, ensures fairness for all parties, and expands access to justice. And in a system where lengthy litigation often serves neither employees nor employers well, that shift makes a real difference.
