In 2023, SonRay Solar, Inc., a mid-sized solar construction company in California, found itself facing a lawsuit that no contractor wants to see. A single former employee’s complaint about unpaid overtime and missed breaks quickly escalated into a full-blown class and PAGA action, eventually representing over 400 workers. 

For nearly a year, SonRay fought to defend its practices, insisting it complied with California’s labor laws. But after costly discovery, mediation, and the looming risk of trial, the company agreed to a $2.3 million settlement, including $150,000 in PAGA penalties, most of which went directly to the state. 

From SonRay’s perspective, it was a hard lesson: The company avoided the gamble of a potentially catastrophic verdict, but only at the price of millions in payouts, attorney’s fees, and disruption to its business. 

SonRay’s story isn’t unique. 

Contractors across California are learning the same thing: Even small oversights in payroll, break enforcement, or expense reimbursement can turn into multi-million-dollar liabilities under the state’s wage and hour laws. 

Why Construction Gets Hit Harder in California 

Construction companies in California face a variety of unique challenges when it comes to wage and hour compliance. 

Here’s a few of the most impactful: 

Defining and Tracking “Hours Worked” on Mobile Sites is Difficult 

California’s Wage Order 16 covers construction. It defines “hours worked” broadly as time an employee is under the employer’s control. That includes things like waiting at a site gate, security checks, or restricted meal periods. The 2024 Huerta v. CSI Electrical ruling confirmed that certain site access and exit procedures must be paid. 

For contractors with mobile crews, this blurs the line between “work” and “commute,” making it difficult for companies to track time and pay their employees properly. 

Contractors need rock-solid timekeeping systems that capture site access, travel, and downtime, otherwise every gray area can become a lawsuit. 

Piece-Rate Pay Isn’t as Simple as it Sounds 

Framers, drywallers, and solar installers are often paid by the piece. But California requires separate pay for rest breaks and “nonproductive” time like setup or travel. Those amounts must also show up clearly on the wage statement. 

Contractors who skip these details see claims pile up fast. 

Payroll must track rest and downtime separately and disclose them on wage statements. Spreadsheets won’t cut it. 

Meal & Rest Breaks Are Hard to Deliver on Job Sites 

In California, breaks are mandatory: A minimum 30-minute first meal period is required to be taken prior to the end of the fifth hour of course, plus minimum 10-minute rest breaks must be provided every four hours, or major fraction thereof. In construction, however, weather, inspections, or safety concerns often interrupt schedules. Each missed or late break triggers an extra hour of “premium pay”, and those premiums stack quickly across large crews. 

To avoid problems, employers are turning to digital break attestations and supervisor dashboards help prove compliance and automatically trigger premiums when breaks are missed. 

Overtime & Alternative Work weeks Meet Prevailing Wage Rules 

California requires daily overtime after 8 hours, weekly overtime after 40 total hours, and double time after 12 hours in a day. On public works projects, prevailing wage rules add another layer of complexity. Plus, Alternative Workweek Schedules are possible, but they come with strict requirements for compliance. 

When you’re on a job site and trying to meet a deadline, meeting these rules often conflicts with project and/or revenue priorities. 

Payroll and compliance teams need pre-payroll checks to catch errors before checks go out, and careful documentation of any alternative schedules. 

Reporting Time Pay and Weather Downtime 

When workers report to a job site but are sent home early for rain, delays, material shortages, or other reasons, they may be owed 2–4 hours of pay due to Reporting Time Pay requirements in California. Essentially, if an employee takes time to report to work, employers owe the employee for that time spent, even if no primary work was done. 

Many contractors miss this requirement under Wage Order 16. 

One solution: Contractors are creating rain/standby pay codes in their payroll system and training foremen to log shortened shifts correctly. 

Subcontractor Liability 

General contractors can be jointly liable for subcontractors’ wage and hour violations. That means if a subcontractor’s payroll is sloppy, the general contractor may pay the price. 

If possible, contracts should require payroll data-sharing, audit rights, and indemnity. Then, general contractors need to audit subcontractors’ wage statements and break records to ensure compliance with California rules. 

GCs could also consider sharing compliance frameworks and resources, like training, with subcontractors so everyone is on the same page and following the same policies and procedures. 

Wage Statement Errors 

California’s itemized wage statement rules are strict, especially with piece-rate pay. Missing information, like separate lines for rest breaks or break premiums, can trigger penalties for every pay period, for every employee. 

Those penalties lead to lawsuits, which are extremely costly. 

Instead, employers need to configure payroll systems properly, so they provide accurate information, and perform monthly audits of wage statements to catch errors before they become lawsuits. 

PAGA Risk 

Even with the 2024 reforms giving employers more opportunities to “cure” violations, PAGA remains a huge problem. As SonRay Solar learned, a single employee’s complaint can spiral into hundreds of claims and six- or seven-figure penalties. 

Given all the other issues I’ve described in this section, contractors need to build a rapid-response workflow for payroll complaints. Fast cures can prevent minor errors from becoming statewide litigation. 

How Contractors Can Protect Themselves 

California’s new PAGA reform laws (AB 2288 and SB 92) give employers an important incentive: If you can show you’ve taken “reasonable steps” to comply with wage and hour rules, courts now have discretion to reduce penalties, or even avoid them altogether. 

For construction companies, those steps should be concrete, well-documented, and proactive: 

• Audit payroll systems regularly: Spot errors in overtime, prevailing wage rates, and piece-rate calculations before they accumulate. 

• Enforce meal and rest breaks with digital tools: Use timekeeping apps like BusyBusy that require workers to confirm whether breaks were taken and automatically apply premiums if not. 

• Train your supervisors and employees: Ongoing wage and hour training is one of the most effective risk reducers. It helps crews understand their rights, helps supervisors apply the law consistently, and demonstrates to courts and regulators that your company is acting in good faith. 

• Strengthen subcontractor agreements: Require certified payroll and time data from subs and reserve the right to audit compliance. 

• Maintain airtight records: Keep at least three years of time, pay, and break data, so you can prove compliance if challenged. 

• Respond fast to complaints: Investigate issues immediately, make corrections, and document fixes to preserve your ability to “cure” under PAGA. 

By taking these steps, contractors don’t just reduce their exposure to lawsuits, they create a stronger, more predictable payroll system that saves money, builds trust with employees, and helps keep projects on schedule. 

Even Mid-Sized Contractors Can Find Themselves Writing Million-Dollar Checks for Everyday Payroll Practices 

California’s wage and hour laws are uniquely tough on construction employers. What feels like normal field practice—early yard time, gate waits, weather delays, compressed breaks—can all trigger liability if not tracked and compensated correctly. The recent SonRay Solar settlement is a warning: Even mid-sized contractors can find themselves writing million-dollar checks for everyday payroll practices. 

The good news is that with the right systems, training, and documentation in place, contractors can take advantage of the “reasonable steps” safe harbor in the new PAGA laws. That means fewer lawsuits, smaller penalties, and more control over labor costs in one of the most compliance-heavy states in the country. 

Proactive compliance efforts like training are always cheaper than reactive litigation. The best California employers take the initiative and reduce their exposure to wage and hour lawsuits before any lawsuit arrives. 

👉 Learn more about our Wage & Hour Training 

This post is for informational purposes only and does not constitute legal advice. California’s meal and rest break laws are complex and vary by industry and workforce. Consult an experienced employment attorney for guidance tailored to your business. Cal Comply is a paid training provider mentioned for illustrative purposes; other compliance resources are available.