Earlier this week, the California Court of Appeal reached a decision that may ease employers’ worries when presented with a wage and hour lawsuit.
California’s plaintiff-friendly laws provide avenues for plaintiffs to fill their pockets with penalties and attorneys’ fees, in addition to any wages they claim are owed. However, as decided on Monday in Naranjo v. Spectrum Security Services, Inc., plaintiffs will have to work a little harder to prove they are entitled to additional penalties and fees.
When an employee claims that they have not been paid all the wages they were entitled to both during and after their employment, they typically seek additional penalties and fees under Labor Code sections 203 and 226. To prevail on these claims, the employee must prove that the employer’s failure to pay certain wages was either “willful” under Labor Code Section 203, or “knowing and intentional” under Labor Code Section 226. In Monday’s decision, the Court held that an employer’s “good faith dispute” can prevent the employee from collecting penalties and attorneys’ fees for “willful” or “knowing and intentional” violations.
In this decision, the Court recognized that California Code of Regulation Section 13520 applies to Labor Code Section 203. Under this regulation, if the employer has a “good faith belief” that it complied with the law at the time final wages were due, then the employer’s violation is not considered “willful.” As a result, an employer who presents evidence...
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