Penalties for Late Payment of Wages under California Labor Code 204
How soon after payroll period are employers required to pay employees?
Employers in California have to pay their employees by a certain date. That date depends on whether the payments are made every two weeks (bi-weekly), twice a month (bi-monthly), or otherwise. If an employer does not make its payments on time, it can face significant liability under the Private Attorneys General Act, as described below.Penalties for late payment of wages
For employees who are paid twice a month (bi-monthly), California Labor Code section 204(a) requires that they issue wages no more than 10 calendar days after the last day of the payroll period. So, for example, an employee who is paid bi-monthly on the 15th and last day of the month must be issued wages by the 25th and 10 calendar days after the last day of the preceding month. See Labor Code section 204(a), which governs bi-monthly payments:
Labor performed between the 1st and 15th days, inclusive, of any calendar month shall be paid for between the 16th and the 26th day of the month during which the labor was performed, and labor performed between the 16th and the last day, inclusive, of any calendar month, shall be paid for between the 1st and 10th day of the following month.
However, the rule is stricter when employers pay every two weeks (bi-weekly payroll periods). Employers that pay every two weeks must make payment no more than seven calendar days after the close of the payroll period. This rule also applies where workers are paid every week. Labor Code § 204(d) states in pertinent part as follows:
The requirements of this section shall be deemed satisfied by the payment of wages for weekly, biweekly, or semimonthly payroll if the wages are paid not more than seven calendar days following the close of the payroll period.
In other words, employees who are paid every two weeks must be paid within seven days of the close of their payroll periods. If they are paid after that, then the employer is violating Labor Code section 204.
Important policy objectives underlie the wage payment timing requirements set forth in Labor Code section 204. See, e.g., See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal. App. 4th 889, 904:
“[S]ection 204 . . . pertains to the timing of wage payments”, and serves a very important public policy objective. “It has long been recognized that wages are not ordinary debts, . . . and that, because of the economic position of the average worker and, in particular, his dependence on wages for the necessities of life for himself and his family, it is essential to the public welfare that he receive his pay when it is due.”
See also In re Trombley (1948) 31 Cal. 2d 801, 810-11 (citing In re Moffett (1937) 19 Cal.App.2d 7, 19).
The penalties for violating section 204 are set forth in Labor Code section 210(a). Singer v. Becton, Dickinson & Co., Med-Safe Sys., 2008 U.S. Dist. LEXIS 56326, 8 (S.D. Cal. July 23, 2008). These penalties are steep:
[E]very person who fails to pay the wages of each employee as provided in Sections . . . 204 . . . shall be subject to a civil penalty as follows:
(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.
Notably, the “willful or intentional” standard is different from the “subsequent” standard discussed in Amaral v. Cintas Corp. No. 2 (2008) 163 Cal. App. 4th 1157, 1207-08, and would apply even to “initial” violations – so long as the defendant intended to pay wages on the date which it did. Normally the defendant did intend to pay wages on the date the wages were due, so the $200 penalty would apply plus 25 percent of the amount of the paycheck. As you can imagine, that is often a huge sum.
If you have questions regarding your wages, please feel free to contact Hunter Pyle Law at 510.444.4400, or inquire@hunterpylelaw.com.