On August 21, 2025, the Supreme Court of California ruled that employers must demonstrate that they took reasonable steps to comply with minimum wage laws to mount a good-faith defense against liquidated damages. The decision in Iloff v. LaPaille overturned an earlier state appellate court decision. The Supreme Court of California also ruled, with respect to claims for paid sick leave, that there is no private right of action to recover administrative penalties.

• The Supreme Court of California recently determined that employers need to show they tried to understand and comply with the state minimum wage rules in order to avoid paying liquidated damages after a violation.
• What constitutes a reasonable attempt will vary depending on the type of employer and the context.
• Arguing that the employer was ignorant of the minimum wage law is not sufficient for a good-faith defense.
• For paid sick leave claims, there is no private right of action to recover administrative penalties.

A California resident, Laurance Iloff, sued Bridgeville Properties Inc. and its chief executive officer for failing to pay the state minimum wage and paid sick leave. From 2009 to 2016, Iloff performed maintenance on the structures, grounds, and water system for the property, which includes rental homes, cabins, and a post office. Under an informal agreement, Bridgeville allowed him to live there rent-free, but did not pay him any wages or benefits.

In January 2017, Iloff brought a claim to the state...

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