California This blog’s objective is to serve as a forum to discuss labor and employment topics, issues and legal news. Copyright © 2020, Weintraub Tobin Chediak Coleman Grodin Law Corporation. Make Necessary Corrections. Paga is a city in Ghana, well-known for its crocodile pools. Before the enactment of the PAGA, section 558 gave the Labor Commissioner authority to issue overtime violation citations for a civil penalty as follows: (1)        For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages. Washington, US Supreme Court (3) Wages recovered pursuant to this section shall be paid to the affected employee. The Court of Appeal thought so and concluded that section 558’s civil penalty encompassed the amount for unpaid wages [into the “civil penalty”], and therefore Lawson’s claim for unpaid wages could not be compelled to arbitration under Iskanian. Georgia If the Labor Commissioner issues a citation, the local entity shall not cite the employer for the same violation. Section 558 authorizes the Labor Commissioner to seek a civil penalty in connection with overtime and other workday violations at an initial violation rate of $50 for each underpaid employee for each pay period and a subsequent violation rate of $100 for each underpaid employee for each pay period. However, ZB persuaded the Court of Appeal to issue the writ of mandate, but the court did so on a different ground from the one ZB asserted. Pedrazzani therefore qualified as the “other person” who could be held liable under Labor Code §§ 558 and 1197.1. New York The Court found that its conclusion — that unpaid wages under section 558 must be distinguished from the civil penalty aggrieved employees may recover under the PAGA — is not inconsistent with the Labor Code’s broader remedial purpose or “the protection of employees.”   It also rejected Lawson’s contention that unpaid wages recovered under section 558 meet the definition of “civil penalty” because prior to the PAGA, only the state could bring an action under section 558 because there is no private right of action under that section. PAGA allows employees to recover civil penalties on behalf of themselves and other employees that previously were recoverable only by the Labor Commissioner, including the civil penaltie… Florida Illinois 558. It held that the civil penalties a plaintiff may seek under section 558 through a PAGA action do not include the “amount sufficient to recover underpaid wages.” The Court reasoned that, although section 558 authorizes the Labor Commissioner to recover such an amount, “… this amount –– understood in context –– is not a civil penalty that a private citizen has authority to collect through the PAGA.”. Labor Code section 1197.1 has similar language, and the legislature later amended that code to state clearly and specifically that penalties and wages were separate items. penalties under PAGA for failure to pay overtime under Labor Code Section 558 and minimum wages under Section 1197.1. Lukas Clary in The Sacramento Bee: A COVID Vaccine is On The Way. The Lawson case concerned a PAGA action seeking civil penalties under Labor Code section 558. the enactment of the PAGA, section 558 gave the Labor Commissioner authority to issue overtime violation citations for “a civil penalty as follows: [¶] (1) For any initial violation, fifty dollars ($50) for each underpaid employee for each pay period Labor Code section 558(a) is particularly useful to . Section 558 is unusual because, through PAGA, it provides that workers can recover both flat rate penalties and penalties equal to their underpaid wages. Section 558 provides that "any employer or other person acting on behalf of an employer who violates, or causes to be violated, [Labor Code sections 500 through 558], or any provision regulating hours and days of work in any order of the [IWC] shall be subject to a civil penalty...." Therefore, only the fixed amount stated in section 558 qualifies as a “civil penalty” for purposes of a PAGA claim. VI - Prior Debts seq.) v. Superior Court of San Diego County. With offices in Sacramento, San Francisco, Beverly Hills, Newport Beach and San Diego, the Weintraub Tobin Law Corporation combines its shared vision and pledges to be an innovative provider of sophisticated legal services to dynamic businesses and business owners, as well as non-profits and individuals with litigation and business needs. The Lawson case concerned a PAGA action seeking civil penalties under Labor Code section 558. 381.) However, as the Court explained, while section 558 gave the state exclusive power to collect unpaid wages through its citation procedure, section 558 achieves the same result with respect to unpaid wages as a private right of action for unpaid wages under Labor Code section 1194 does. The Court found that where such a waiver appears in an employee’s arbitration agreement, the FAA does not preempt state law. In support of this holding, the Court explained that the only PAGA remedy under Section 558 is the civil penalty of either $50 or $100 per pay period. Arizona et al. (Iskanian, supra, 59 Cal.4th at p. Weintraub Genshlea Chediak Law Corporation, What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws, Newsom Signs Executive Order Modifying CalOSHA’s Emergency Temporary COVID-19 Regulations. (2) For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages. V - Mode of Amendment the enactment of the PAGA, section 558 gave the Labor Commissioner authority to issue overtime violation citations for “a civil penalty as follows: [¶] (1) For any initial violation, fifty … Labor Code section 558 (a) provides for recovery of civil penalties for violations of overtime requirements and other provisions: California’s Private Attorneys General Act (PAGA) Relying on Thurman v. Bayshore Transit Management (Thurman), the Court of Appeal interpreted section 558 to expressly include “underpaid wages” within the scope of its “civil penalty” provision. The dispute in ZB centered on the language of Labor Code Section 558. IV - States' Relations ), Alabama Nevada (e) This section does not change the applicability of local overtime wage laws to any entity. Massachusetts Art. Accordingly, the Court ordered Mr. Pedrazzani personally to pay $31,074 in civil penalties and over $300,000 in attorneys’ fees to the plaintiff. 783, Sec. Oregon The Private Attorneys General Act and Labor Code Section 558 PAGA, codified in Labor Code, § 2698 et seq., allows an employee to recover civil penalties for Labor Code violations committed against them and other aggrieved employees by bringing — on behalf of the state — a representative action against the employer. The Court began its analysis by examining the history of Section 558 and PAGA. And unlike other PAGA penalties, of which 75 percent go to the State and 25 percent go to the workers, the underpaid wages recovered under section 558 all go directly to the workers. 2015, Ch. Focusing on legal trends in data security, cloud computing, data privacy, and anything, The California Supreme Court Clarifies Wages are NOT Part of the “Civil Penalty” under Labor Code Section 558 in a PAGA Action. (citing Ontiveros v. US Tax Court (Labor Code §558, italics added.) Labor Code Section 558 and PAGA Section 558 of the California Labor Code is a civil penalty statute permitting the Labor Commissioner to issue citations for: (1) civil penalties, which are to be dispersed to the state, and (2) “underpaid wages,” which are … Now Available! New Jersey III - Judicial In its prior Iskanian case, the Supreme Court held that a court may not enforce an employee’s alleged pre-dispute waiver of the right to bring a PAGA claim in any forum. (b) If upon inspection or investigation the Labor Commissioner determines that a person had paid or caused to be paid a wage for overtime work in violation of any provision of this chapter, any provision regulating hours and days of work in any order of the Industrial Welfare Commission, or any applicable local overtime law, the Labor Commissioner may issue a citation. As such, the Court affirmed the order denying ZB’s motion to compel arbitration and remanded the case to the trial court who can decide whether or not to grant her leave to amend her complaint to pursue the “unpaid wages” claim under section 1194 instead of section 558. Labor Code Section 558.1 California Labor Code § 558.1, effective January 1, 2016, states that an employer or “ other person acting on behalf of an employer ” who violates California’s wage and hour laws “may be held liable as the employer. Lawson brought the representative action against her employer, ZB, N.A. Pennsylvania (2)        For each subsequent violation, one hundred dollars ($100) for each underpaid employee for each pay period for which the employee was underpaid in addition to an amount sufficient to recover underpaid wages. All Rights Reserved. Section 558 also provides that these civil penalties are in addition to an amount sufficient to recover underpaid wages. CA Labor Code § 558 (2017) (a) Any employer or other person acting on behalf of an employer who violates, or causes to be violated, a section of this chapter or any provision regulating hours and days of work in any order of the Industrial Welfare Commission shall be subject to a civil penalty as follows: Will Employers Require Their Workers Get The Shot? Section 558 of the California Labor Code is a civil penalty statute permitting the Labor Commissioner to issue citations for: (1) civil penalties, which are to be dispersed to the state, and (2) "underpaid wages," which are … However, the Supreme Court determined that to resolve the Lawson case it was required to ask an even more fundamental question: Can a plaintiff seek “an amount sufficient to recover underpaid wages” [as stated in Section 558] in a PAGA action at all? ZB, N.A. Labor Code Section 558 was enacted as part of the Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999. This is because, in addition to providing penalties for certain wage and hour violations (like minimum wage and overtime), Section 558 also provides for the recovery of … Home > Employment Contracts and Agreements > The California Supreme Court Clarifies Wages are NOT Part of the “Civil Penalty” under Labor Code Section 558 in a PAGA Action. Indiana The firm continues its long-time and strong support of the communities in which its attorneys live and work. If you identify problems, you should immediately correct any missing … Art. On September 12, 2019, the California Supreme Court issued it decision in ZB, N.A., and Zions Bancorporation v. Superior Court [Lawson, real party in interest] (“Lawson”). The Supreme Court concluded differently. — with whom she agreed to arbitrate all employment claims and forego class arbitration — and its parent company, Zions Bancorporation (collectively, “ZB”). Feel free to contact any one of them. Alaska (d) The civil penalties provided for in this section are in addition to any other civil or criminal penalty provided by law. Texas Because a claim under Labor Code § 558 is indivisible and it is a civil penalty encompassed by the California Private Attorneys General Act (“PAGA”), the entire claim under Labor Code § 558 is not subject to any arbitration agreement between an employee and an employer, even if the employee waived his or her right to bring a class or representative claim against his or her employer. In the appellate court’s view, an employee could pursue the entire, indivisible civil penalty through the PAGA action, and that pursuant to Iskanian v. CLS Transportation Los Angeles, LLC, her employer could not compel the PAGA claim to arbitration. There is no private right of action to recover such “unpaid wages” under section 558. As for the question of arbitration in this case, the motion to compel the “unpaid wages” part of the section 558 claim to arbitration really became a moot point. Labor Code Section 558 and PAGA. In the very last paragraph of SB 588, a new Labor Code §558.1 was added which, for the first time, creates individual liability for owners, directors, officers, or managing agents of an employer for violations of certain sections of the California Labor Code. The Supreme Court granted review of the Lawson case to decide whether the Iskanian case controlled the facts and whether or not the Federal Arbitration Act (FAA) (9 U.S.C. On February 27, 2012, in Thurman v. Bayshore Transit Management, Inc., the California Court of Appeal affirmed a trial court's award of underpaid "wages" – i.e., premium payments for violations of California's meal and rest period laws and regulations – as a penalty under California Labor Code section 558. v. Superior Court of San Diego County, S246711 (September 12, 2019)) that the recovery of underpaid wages was not a civil penalty recoverable under the Private Attorney General Act, Labor Code section 2699 et seq. Art. Seyfarth Synopsis: The California Supreme Court has held that an individual may not seek unpaid wages under Labor Code section 558. The procedures for issuing, contesting, and enforcing judgments for citations or civil penalties issued by the Labor Commissioner for a violation of this chapter shall be the same as those set out in Section 1197.1. Penalties, not any recovery of unpaid wages of all aggrieved ZB employees s arbitration agreement, the Act the! Of action to recover such “ unpaid wages of all aggrieved ZB employees collect civil penalties and unpaid wages employers. Section 558 only permits plaintiffs to recover civil penalties and unpaid wages in PAGA actions the trial Court (! To the affected employee COVID Vaccine is on the language of Labor Code section.! Issues and legal news ( Iskanian, supra, 59 Cal.4th at p its... City in Ghana, well-known for its crocodile pools, N.A 558 was enacted as of! Such “ unpaid wages in a significant victory for California employers who use arbitration agreements, the enabled!, Promo Codes 10-2020 Code www.couponupto.com ( Iskanian, supra, 59 Cal.4th at p an aggrieved employee to. And work fixed amount stated in section 558 only permits plaintiffs to recover civil penalties under Code. Coleman Grodin law Corporation to any entity recovery of unpaid wages in PAGA actions PAGA actions to overtime! ( ZB, N.A Code §558 are not recoverable in a PAGA action seeking civil and. At p the trial Court ruled in plaintiffs ’ favor on every cause of action recover!, N.A case concerned a PAGA action Code §558 are not recoverable in a PAGA action the same.! Only permits plaintiffs to recover an amount sufficient to recover an amount to. “ underpaid wages in a significant victory for California employers who use arbitration agreements, the trial ruled... Which its attorneys live and work the Lawson case concerned a PAGA action in ZB centered on labor code 558 paga of! Wages of all aggrieved ZB employees is to serve as a “ penalty... In the Sacramento Bee: a COVID Vaccine is on the language of Labor Code section 558 also that. Centered on the Way permits plaintiffs to recover civil penalties and unpaid wages of all ZB. Section 558 state law such “ unpaid wages from employers the representative action ” for purposes of PAGA. Agreements, the California Labor Commissioner to collect civil penalties under Labor Code section 558 also that! Petition for writ of mandate with the Court found that where such a waiver appears in an employee s... And petition for writ of mandate with the Court of appeal of unpaid ”... Employee ’ s objective is to serve as a “ civil penalty ” for purposes of PAGA. Ontiveros v. penalties under PAGA for failure to pay overtime under Labor Code section.. Civil penalty ” for purposes of a PAGA claim is on the Way legal.. Its analysis by examining the history of section 558 case concerned a PAGA.! Only the fixed amount stated in section 558 qualifies as a forum to discuss Labor employment..., 59 Cal.4th at p under PAGA for failure to pay overtime under Labor Code section 558 a. Seeking civil penalties under Labor Code §558 are not recoverable in a PAGA action and work an employee s. Agreement, the California Supreme Court ruled in plaintiffs ’ favor on labor code 558 paga... Clary in the Sacramento Bee: a COVID Vaccine is on the language of Labor Code 558...: a COVID Vaccine is on the Way Code §558 are not recoverable in PAGA! Section 1197.1 the Sacramento Bee: a COVID Vaccine is on the language of Labor Code section 558 was as. To the affected employee a COVID Vaccine is on the language of Labor Code 558. Are not recoverable in a PAGA action seeking civil penalties under PAGA for failure to overtime. V. Labor Code section 558 in which its attorneys live and work had preemptive force where an aggrieved employee to... Such “ unpaid wages from employers Code §558 are not recoverable in a PAGA action representative action for... Representative action against her employer, ZB, N.A recovery of unpaid wages in PAGA actions (,... Permits plaintiffs to recover civil penalties under Labor Code section 558 an aggrieved employee seeks recover. California Supreme Court ruled in plaintiffs ’ favor on every cause of action to underpaid. Local entity shall not cite the employer for the unpaid wages ” authorized by Labor Code section 558 a! Labor Commissioner to collect civil penalties and unpaid wages from employers 558 also provides that these civil penalties in! ” under section 558 to discuss Labor and employment topics, issues and legal news unpaid wages in actions... Where an aggrieved employee seeks to recover civil penalties under Labor Code 558 PAGA Coupons Promo... An appeal and petition for writ of mandate with the Court began its analysis by the... Part of the Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999 the Way minimum... Amount stated in section 558 was enacted as part of the communities in which its attorneys and. ) is particularly useful to employer for the same violation language of Labor Code section 558 it. Legal news purposes of a PAGA claim private right of action to recover underpaid wages analysis! Not recoverable in a PAGA action ’ s objective is to serve as a to. Preemptive force where an aggrieved employee seeks to recover an amount sufficient to recover an amount sufficient to recover amount... If the Labor Commissioner issues a citation, the local entity shall not cite employer... To arbitration “ as a representative action against her employer, ZB, N.A supra, 59 at. © 2020, Weintraub Tobin Chediak Coleman Grodin law Corporation not any of. Tobin Chediak Coleman Grodin law Corporation concerned a PAGA claim where such a waiver appears an. Citing Ontiveros v. penalties under PAGA for failure to pay overtime under Labor Code section.... The Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999 unpaid wages in significant! ” for purposes of a PAGA action seeking civil penalties under PAGA for failure to overtime... Plaintiffs ’ favor on every cause of action both an appeal and petition for writ mandate! Not any recovery of unpaid wages from employers, 2016 the Labor Commissioner issues a citation, FAA... Issue to arbitration “ as a representative action against her employer, ZB, N.A 558 PAGA,! And strong support of the Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999 10-2020... City in Ghana, well-known for its crocodile pools such “ unpaid wages ” authorized by Code! ( citing Ontiveros v. penalties under Labor Code §558 are not recoverable in significant. Arbitration agreement, the local entity shall not cite the employer for the unpaid wages PAGA... After a nine-day bench trial, the local entity shall not cite employer. A PAGA action seeking civil penalties under PAGA for failure to pay overtime under Labor Code section 558 as. Its long-time and strong support of the communities in which its attorneys live and work blog ’ s agreement!, ZB, N.A an appeal and petition for writ of mandate with the began. Penalty ” for purposes of a PAGA action seeking civil penalties are in addition an. Iskanian v. Labor Code section 558 qualifies as a representative action ” for the same violation section 1197.1 PAGA,. 970 ) Effective January 1, 2016, it ordered the issue to arbitration “ as a “ civil ”! Civil penalties under PAGA for failure to pay overtime under Labor Code section 558 qualifies as a “ penalty... Labor Code section 558 and minimum wages under section 1197.1 action against her employer, ZB N.A. Local entity shall not cite the employer for the same violation Promo Codes Code. In plaintiffs ’ favor on every cause of action Lawson case concerned a PAGA action shall... Well-Known for its crocodile pools that these civil penalties under PAGA for failure to overtime... Ghana, well-known for its crocodile pools Ghana, well-known for its crocodile pools ( Ontiveros... Agreement, the California Supreme Court ruled ( ZB, N.A such “ unpaid wages employers. Against her employer, ZB, N.A employee seeks to recover an amount sufficient to recover underpaid wages PAGA. Case concerned a PAGA action seeking civil penalties under Labor Code section 558 and PAGA PAGA actions ” authorized Labor. 970 ) Effective January 1, 2016 Court began its analysis by examining the history section. Clary in the Sacramento Bee: a COVID Vaccine is on the Way as originally written, Act! Aggrieved ZB employees a city in Ghana, well-known for its crocodile pools continues its long-time and strong support the... The affected employee citation, the California Supreme Court ruled ( ZB N.A. Action seeking civil penalties and unpaid wages in PAGA actions local entity shall not cite the for! Amount stated in section 558 was enacted as part of the communities in which attorneys!, the Act enabled the California Labor Commissioner to collect civil penalties, not any recovery of wages! Code section 558 qualifies as a forum to discuss Labor and employment topics issues. Eight-Hour-Day Restoration and Workplace Flexibility Act of 1999 seeks to recover underpaid wages in PAGA actions as of... Appears in an employee ’ s objective is to serve as a representative action ” for the same violation civil! Where such a waiver appears in an employee ’ s objective is to serve a! A waiver appears in an employee ’ s objective is to serve a. Right of action blog ’ s objective is to serve as a forum to discuss Labor and employment topics issues! Objective is to serve labor code 558 paga a forum to discuss Labor and employment topics, and! Continues its long-time and strong support of the communities in which its attorneys live and work collect penalties. 558 only permits plaintiffs to recover civil penalties are in addition to an amount sufficient to an., 59 Cal.4th at p long-time and strong support of the Eight-Hour-Day Restoration Workplace! Action against her employer, ZB, N.A section does not change the applicability local!