In a unanimous decision that strengthened California’s already robust worker protections laws, the state’s Supreme Court has made it harder for employers to avoid increased damages for minimum wage violations.
The ruling in Iloff v. LaPaille establishes that ignorance of the law is not a “good faith” defense to liquidated damages for minimum wage violations, and allows employees to raise some new claims on appeal.
What happened
Plaintiff Laurance Iloff performed maintenance work for a company that rented small homes and cabins. In lieu of wages, Mr. Iloff lived rent-free in one of the houses, receiving no other compensation, and the company classified him as an independent contractor. After the arrangement ended, Mr. Iloff filed a wage claim with the California Labor Commissioner, asserting that he was an employee, entitled to unpaid wages and liquidated damages. The Labor Commissioner agreed, and awarded him back pay, liquidated damages, and penalties. Lower courts then scaled back the award, finding a “good faith” misunderstanding of his status and barring new claims on appeal, but the California Supreme Court reversed – expanding employee protections and limiting employers’ defenses.
The Court’s decision
“Good faith” now requires a “reasonable attempt”
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