Starting January 1, 2020, California employees will be able to seek penalties from their employers directly for late payment of wages.
If you are wondering thinking employees were already able to do that, you are partially right.
On October 10, 2019, Governor Newsom signed Assembly Bill 673 (“AB 673”), which amends California Labor Code § 210 to give employees the right to seek civil penalties against their employers for wages their employers did not pay in a timely manner. Previously, only the Labor Commissioner could seek such penalties on behalf of employees who did not receive their wages timely, and a significant portion of the recovery had to be paid to various State agencies.
If an employer fails to pay an employee wages as provided in the Labor Code, the employer is subject to the following penalties: “(1) For any initial violation, one hundred dollars ($100) for each failure to pay each employee. (2) For each subsequent violation, or any willful or intentional violation, two hundred dollars ($200) for each failure to pay each employee, plus 25 percent of the amount unlawfully withheld.”
Under AB 673, employees whose wages have been withhold can now choose to file a private civil action on their own behalf, pursue an administrative action with the Labor Commissioner, or file a claim under the Private Attorneys General Act (PAGA). However, an employee can only recover the statutory penalty provided in Section 210 or enforce a civil penalty under PAGA, but not both, for the same violation of the Labor Code. Which of the above options is best for a particular employees is dependent on the facts of the employee’s situation.
The bottom line is that AB 673 creates an additional avenue for employees to hold employers accountable for failing to pay wages in a timely manner, which is likely to increase the number of this type of claim against employers.