Seyfarth Synopsis: As the world turns its eyes to California this weekend for Super Bowl LX, employers doing business in California may not only think of warm weather and great football, but also the Labor Commissioner, aka the Division of Labor Standards Enforcement (DLSE), a division of the Department of Industrial Relations (DIR) tasked with investigating wage and hour practices, which can result in significant citations or settlements.

Employers doing business in California are well aware of the DLSE, aka the Labor Commissioner’s Office, which, among other things, investigates wage and hour practices and adjudicates employees’ wage theft claims. With Superbowl LX on our minds, we thought it appropriate to take a time out for a recap of the 2025 DLSE season’s expansive impact on employers.

DLSE Investigations and Enforcement

In 2025 alone, the Labor Commissioner’s Bureau of Field Enforcement (BOFE) threw a flag on the play and issued more than 3,600 notices to discontinue wage and hour violations, including the following settlements and citations:

  • $1.2 million settlement against a Newport Beach luxury carwash for wage violations, with payments to the 23 affected workers ranging from $8,500 to $92,800.
  • $2.3 million citation against Los Angeles-based developers at four construction sites for violations impacting 124 construction workers involving unpaid minimum wages and overtime compensation, wage statement violations, and paid sick leave.  
  • $680,000 citation against a Los Angeles-based restaurant for failure to pay 48 employees all wages owed, meal and rest break violations, and wage statement violations.

The DLSE undertakes enforcement actions in response to worker complaints, and on its own accord strategically targeting certain industries that it assumes will have high rates of wage violations. The genesis of these high value citations can be Labor Commissioner investigations involving payroll and sick leave audits, employee interviews, and site visits. Their goal is to uncover systemic violations—such as unpaid overtime, missed meal and rest breaks, minimum wage or paid sick leave violations, or inaccurate wage statements.

If a business receives notice of a DLSE investigation, it is important to take the following steps:

  • Immediately reach out to outside counsel experienced in these investigations to guide you through the process.
  • Timely contact the assigned investigator to discuss the scope of the investigation;
  • Ensure the requested materials have been preserved and are available for production;
  • Have legal counsel review the relevant records before production to assess potential weaknesses; and
  • Discuss with counsel a plan to correct any non-compliant practices before the conclusion of the DLSE’s investigation. 

The DLSE Calls For An Audible With Municipal Prosecutors

The Labor Commissioner has recruited some new players for the 2026 season, from municipal law enforcement authorities. On July 23, 2025, the DLSE announced that it was awarding grants under the Workers’ Rights Enforcement Grant Program, established in 2023, to 16 public prosecutors to pursue civil and criminal cases for wage theft, unlawful business practices, and Labor Code violations. The benefitting cities include Alameda, Fresno, Los Angeles, Oakland, Orange County, San Diego, and San Francisco, which received grant awards ranging from $600,000 to $750,000 per city.

With this additional funding, local agencies are expected to expand their investigations into potential Labor Code violations. These local investigations are often conducted in a similar manner to the DLSE’s investigations, and employers should follow similar steps when provided with a notice of investigation.

Individual DLSE Claims Can Take The Game Into Overtime

Large investigations aren’t the only way the DLSE blocks and tackles potential wage theft violations. The Labor Commissioner also receives thousands of individual wage claims each year. Employers can defend against or resolve these claims at an initial settlement conference and the subsequent formal hearing. These claims can also go into overtime, if either party appeals the DLSE’s decision to the California Superior Court, which will review the matter de novo, or to the Director of the DIR.

For a guide on how to avoid fumbling an individual claim, read all about the DLSE and the appeal process here. Like the game of football, this process has remained largely the same over the years, but with one recent notable exception. As the California Supreme Court held in the 2025 Iloff v. Cynthia LaPaille decision, an employee can raise additional claims during the appellate process.

Workplace Solutions

To limit exposure to any of the Labor Commissioner’s enforcement actions, employers should ensure good wage and hour hygiene so as to comply with California law. Here are some steps employers should consider taking to get game day ready:

  • Review your wage and hour policies annually to ensure compliance with California’s ever-evolving requirements;
  • Train your managers and HR team on compliance issues;
  • Conduct internal audits to identify and correct problems early; and
  • Respond promptly to employee complaints or questions about wage and hour practices.

Seyfarth is here to help employers navigate a path to California compliant practices and assist with defending against state and local agency enforcement efforts should they occur. Check out the CalPeculiarities Blog for other legal developments affecting California employers.

Edited By: Kristina Launey