Owners, Officers, and Managers Beware: California Labor Code Establishes Personal Liability for Employee Wage and Hour Claims

Lost Time and money

Lost Time and money

In an effort to ensure employees with wage and hour claims against their employer can collect on those claims, California enacted Labor Code section 558.1, which establishes personal liability for employers or individuals acting on behalf of the employer for violations related to the payment of wages and hours worked. This applies to owners, directors, officers and managing agents of the business. To be held personally liable, the individual must have either a) been personally involved in the purported violation; or b) participated in activities of the employer related to the alleged violation(s)- e.g., approving payroll practices, implementing timekeeping procedures, etc. For the purposes of establishing liability, intention does not matter- even an honest mistake can be incredibly expensive.

In order to avoid this costly liability, it is imperative that you regularly review your timekeeping and payroll policies and procedures to ensure they are compliant with California’s ever-changing requirements.

If you need support navigating your timekeeping and payroll policies and procedures or have any questions, please feel free to contact Holden Law Group to discuss.