In Iloff v. LaPaille, the California Supreme Court addressed when “liquidated” or double damages may be avoided by an employer for minimum wage violations and how employees can pursue paid leave claims under California’s Healthy Workplaces, Healthy Families Act (HWHFA), the statewide paid sick and safe time law.
Defense to Liquidated Damages for Minimum Wage Violations: Under California Labor Code section 1194.2, liquidated damages in an amount equal to the amount of unpaid minimum wages are mandatory, unless an employer can demonstrate that it acted “in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of any provision of the Labor Code relating to minimum wage, or an order of the [Industrial Welfare Commission].” If an employer can show that it had a good-faith and reasonable belief that it was not violating the law regarding minimum wages, a trial court has the discretion to award liquidated damages in an amount that is less than the minimum wages due the employee, or the court could award no liquidated damages whatsoever. A similar remedial scheme is found in the federal Fair Labor Standards Act.
The California Supreme Court held, “an employer must show that it made a reasonable attempt to determine the requirements of the law governing minimum wages” and “proof that the employer was ignorant of the law is insufficient.” The court noted that a good-faith determination will be “context dependent.” As part...
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