Does an employee who retires quit?  California employers are required to promptly pay final wages to employees when they “quit.”  Specifically, Labor Code section 202 provides that employees without a contract for a definite period are entitled to prompt payment of wages either within 72 hours of quitting or immediately upon quitting if they provide at least 72 hours advance notice of their intention to quit.  Employers who fail to make prompt payment of wages are subject to waiting time penalties up to 30 days of wages.  (Lab. Code § 203.)

In McLean v. State, 228 Cal. App. 4th 1500, 176 Cal. Rptr. 3d 734 review granted and opinion superseded, 338 P.3d 304 (Cal. 2014), the court of appeal concluded that an employee who “quits” includes an employee who retires.  There, a state employee retired and separated from her employer on the same day that she retired.  She did not receive her final wages on her last day of employment, nor did she receive them within 72 hours of that date.  Her employer argued that Labor Code section 202 and 203 only applied to employees who “quit” as opposed to those who “retire,” and that the distinction between a “quit” and a “retirement” was well-established in the civil service. The court of appeals disagreed; concluding that “quit” as used in Labor Code section 202 and 203 has one meaning for private and public employers, and includes employees who quit to retire.

That court of appeal decision is now being reviewed by the California Supreme Court.  In the meanwhile, both private and public employers are still subject to Labor Code sections 202 and 203.  Employers should be aware of the prompt payment requirements when employees resign, and the potential applicability of these requirements to employees when they retire.  The decision will have a profound effect, particularly as employees of the baby-boomer generation begin to retire.  It could also subject employers to potential actions by employees who have already retired for waiting time penalties if they did not receive timely payment of their final wages when they retired.

DID YOU KNOW…

Workers on a prevailing wage project are entitled to no less than the prevailing wage (i.e., a basic hourly rate).  This requirement seeks to ensure that the winning bidder is not awarded the project by paying lower wages to workers than the other bidders.  A court of appeal recently recognized that the second-place bidder can sue the winning bidder if the winning bidder only obtained the lowest bidder status because it did not pay workers the prevailing wage.  See, Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc., No. B255558, 2015 WL 738675 (Cal. Ct. App. Feb. 20, 2015).

By:  Branden M. Clary
Wilke Fleury Labor & Employment News
March 2015

Harassment, discrimination and retaliation can be costly for employers, even when employees do not suffer substantial injuries as a consequence of the conduct.  Employees who sue their employers under Title VII for harassment, discrimination or retaliation are subject to its statutory caps on compensatory and punitive damages.  The caps are based on the size of the employer, from 15 employees to more than 500 employees.  When punitive damages are recoverable under state common-law claims, they must be proportional to the violation.  However, a recent decision determined that proportionality does not need to be assessed for the statutory punitive damages caps established under Title VII.

In Arizona v. ASARCO LLC, 773 F.3d 1050 (9th Cir. 2014),  a female employee filed federal claims against her former employer for sexual harassment under Title VII (federal law).  The employer was a large employer with more than 500 employees.  The employee prevailed on her sexual harassment claims.  She apparently did not suffer a substantial compensable injury, so the jury awarded her nominal damages of $1 to formally recognize that she had been harassed.  The jury also awarded her $868,750 in punitive damages, which the court reduced to $300,000 in accordance with the statutory cap under Title VII based on the size of the employer.  The employer challenged the constitutionality of the award in light of the disparity between the nominal and punitive damage awards.  The court of appeal upheld the award despite the disproportionality because it determined that Title VII sufficiently informs employers of the conduct that subjects them to punitive damages and the maximum amount of such damages – in this case, capped damages of $300,000 for an employer with more than 500 employees.

Employers should take all allegations of harassment, discrimination and retaliation seriously.  If they have not already, employers should adopt and implement anti-discrimination and harassment policies.  Employers also need to enforce their anti-discrimination and harassment policies, investigate complaints, and take prompt and effective remedial action when a violation occurs.  While caps exist for punitive damages under federal law, punitive damages are not capped under California Law, the Fair Employment and Housing Act (“FEHA”).  And whereas Title VII applies to employers with 15 employees, FEHA’s discrimination and retaliation provisions apply to employers with just 5 employees, and its harassment protections apply to all employers, regardless of size.

DID YOU KNOW…

The FEHA imposes a continuing obligation on employers to communicate with employees or applicants to determine effective reasonable accommodations in response to a request for a reasonable accommodation (i.e., the interactive process).  Employers may be liable if they are responsible for a breakdown in the interactive process.  See, Swanson v. Morongo Unified Sch. Dist., 232 Cal. App. 4th 954 (2014).

By:  Samson Elsbernd,
Wilke Fleury Labor & Employment News
February 2015

Does an employee who retires quit?  California employers are required to promptly pay final wages to employees when they “quit.”  Specifically, Labor Code section 202 provides that employees without a contract for a definite period are entitled to prompt payment of wages either within 72 hours of quitting or immediately upon quitting if they provide at least 72 hours advance notice of their intention to quit.  Employers who fail to make prompt payment of wages are subject to waiting time penalties up to 30 days of wages.  (Lab. Code § 203.)

In McLean v. State, 228 Cal. App. 4th 1500, 176 Cal. Rptr. 3d 734 review granted and opinion superseded, 338 P.3d 304 (Cal. 2014), the court of appeal concluded that an employee who “quits” includes an employee who retires.  There, a state employee retired and separated from her employer on the same day that she retired.  She did not receive her final wages on her last day of employment, nor did she receive them within 72 hours of that date.  Her employer argued that Labor Code section 202 and 203 only applied to employees who “quit” as opposed to those who “retire,” and that the distinction between a “quit” and a “retirement” was well-established in the civil service. The court of appeals disagreed; concluding that “quit” as used in Labor Code section 202 and 203 has one meaning for private and public employers, and includes employees who quit to retire.

That court of appeal decision is now being reviewed by the California Supreme Court.  In the meanwhile, both private and public employers are still subject to Labor Code sections 202 and 203.  Employers should be aware of the prompt payment requirements when employees resign, and the potential applicability of these requirements to employees when they retire.  The decision will have a profound effect, particularly as employees of the baby-boomer generation begin to retire.  It could also subject employers to potential actions by employees who have already retired for waiting time penalties if they did not receive timely payment of their final wages when they retired.

DID YOU KNOW…

Workers on a prevailing wage project are entitled to no less than the prevailing wage (i.e., a basic hourly rate).  This requirement seeks to ensure that the winning bidder is not awarded the project by paying lower wages to workers than the other bidders.  A court of appeal recently recognized that the second-place bidder can sue the winning bidder if the winning bidder only obtained the lowest bidder status because it did not pay workers the prevailing wage.  See, Roy Allan Slurry Seal, Inc. v. Am. Asphalt S., Inc., No. B255558, 2015 WL 738675 (Cal. Ct. App. Feb. 20, 2015).