[COLUMN] Wages not paid on time or not shown in paystubs warrants employee recovery of monetary penalties

When an employee quits from work, the employer must pay all wages due within 72 hours, unless the employee has given 72-hour previous notice in which case payment shall be made at the time of quitting. Upon discharge, wages are due upon discharge. “Wages” include regular wages, overtime, and payments for missed meal and rest breaks. Wages must be provided in the employee pay stubs. An employer’s failure to comply with these requirements obliges them to pay certain monetary penalties to employees.

Gustavo Naranjo worked as a guard for Spectrum Security Services, Inc. (Spectrum), which contracts with federal agencies to transport prisoners who have appointments outside custodial facilities. Naranjo was fired after leaving his post to take a meal break, in violation of a Spectrum policy that required custodial employees to remain on duty during all meal breaks.

Naranjo filed a class action on behalf of himself and other Spectrum employees, alleging that it violated state meal break requirements under the Labor Code. The complaint sought an additional hour of pay (also known as “premium pay”) for each day on which Spectrum failed to provide employees with a meal break.

The Court answered two important questions:

1) Should missed break premium pay be reflected on the employees’ paystubs? and

2) Should this premium pay be timely paid once the employee has ended employment?

The first question determines whether the employee should be paid for having been issued an incomplete paystub. The second question determines whether the employee should be paid “waiting time” penalty for not receiving premium pay at the time their wages were due. The answers depend on whether the premium pay for missed breaks is a penalty or a wage.

California law requires employers to provide daily meal and rest breaks to non-exempt employees. If an employer makes an employee work during all or part of a meal or rest period, the employer must pay the employee an additional hour of pay. The primary issue is whether this premium pay constitutes “wages” that must be reported on paystubs and paid promptly when an employee leaves the job.

The California Supreme Court. ruled that missed-break premium pay is indeed wages subject to the Labor Code’s timely payment and the reporting requirements. Although the extra pay is designed to compensate for the unlawful deprivation of a guaranteed break, it also compensates for the work the employee performed during the break period. Such extra pay should therefore be included in the pay stub.

An employer’s failure to provide wages in employee pay stubs renders them liable for the payment of penalties in the amount of $50 per pay period up to $4,000.00. An employer’s failure to make payments of wages on time renders them liable to pay this wage for a continued period of time up to 30 days. Both penalties are due and payable to the employees.

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The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of the Asian Journal, its management, editorial board and staff.

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The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com. [For more than 25 years, C. Joe Sayas, Jr., Esq. successfully recovered

wages and other monetary damages for thousands of employees and consumers. He was named Top Labor & Employment Attorney in California by the Daily Journal, selected as Super Lawyer by the Los Angeles Magazine for 11 years, and is a past Presidential Awardee for Outstanding Filipino Overseas.]

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