Category Archives: Waiting Time Penalties

Waiting Time Penalty Under Labor Code Section 203(a) Should Be Calculated Based on Actual Hours Worked

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The Fourth District issued an unpublished opinion discussing the proper means of calculating the waiting time penalty under Labor Code section 203.  In Riley v. Valencia, 2010 WL 3195816 (Cal. Ct. App. 4th Dist. Aug. 13, 2010), the trial court utilized the actual hours the employee worked to calculate the penalty.  The employee, Ashley Riley, contended the trial court improperly calculated the section 203 waiting time penalty, arguing that the court should have multiplied her hourly rate ($6.75) for 30 days at eight hours per day for a total penalty of $1,620, as opposed to multiplying her hourly rate ($6.75) by her average daily hours worked (3.5 hours) for 30 days for a total penalty of $708.75.  Riley contends that section 203 required the trial court to use eight hours per day in its calculations, even though Riley actually worked only three to four hours per day.

The Fourth District concluded the trial court properly calculated the penalty and affirmed the judgment.

Facts

Riley bused tables for employer Valencia (doing business as La Carreta Mexican Restaurant). Eventually, Riley left or was discharged from her employment and filed suit against Valencia for waiting time penalties for unpaid wages due, among other employment-related causes of action. The trial court found in favor of Riley pursuant to section 203 and made the following calculations: “a. Penalty for failure to pay all wages due upon discharge: 6.75 x 3.5 = 23.625 x 30 = $708.75.”

Issue

The sole issue facing the Fourth District was whether the trial court properly calculated the waiting time penalty pursuant to section 203 where it used Riley’s actual hours worked, instead of a generic eight-hour work day, to calculate the “wages” of the employee at the “same rate” pursuant to Labor Code § 203(a).

Because section 203 does not explicitly define “same rate,” Riley contends the waiting time penalty calculus should rely on section 510, subdivision (a)’s definition of a day’s work: “Eight hours of labor constitutes a day’s work.” We conclude the trial court properly calculated the waiting time penalty because the trial court averaged Riley’s daily pay rate ($6.75 x 3.5 hours) and applied that number ($23.625) to reach the correct penalty result of $708.75.

Section 203(a) states:

If an employer willfully fails to pay, without abatement or reduction, in accordance with Sections 201, 201.3, 201.5, 202, and 205.5, any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. An employee who secretes or absents himself or herself to avoid payment to him or her, or who refuses to receive the payment when fully tendered to him or her, including any penalty then accrued under this section, is not entitled to any benefit under this section for the time during which he or she so avoids payment.”

The court concluded that “same rate” as used in Section 203(a) means the “employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday.”  Id. *2.

Following the plain meaning of section 203, California courts have consistently construed the “same rate” variable of the waiting time penalty calculus to consist of the ratio of dollars per hours actually worked. (Mamika v. Barca (1998) 68 Cal.App.4th 487, 490; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 7-8; Oppenheimer v. Sunkist Growers, Inc. (1957) 153 Cal.App.2d Supp. 897, 898-899.) Courts take this “daily wage” and multiply it by up to 30 days, thereby yielding the waiting time penalty. (Mamika, at p. 490; Barnhill, at pp. 7-8; Oppenheimer, at pp. Supp. 898-899.)

Following this authority, we also conclude that section 203, subdivision  (a) means exactly what it says that “the wages of the employee shall continue … at the same rate” for up to 30 days. Here, the trial court correctly calculated the waiting time penalty because the employee’s “same rate” plainly refers to the employee’s actual daily wage and does not refer to an arbitrary daily wage based on a standard eight-hour workday. (Mamika v. Barca, supra, 68 Cal.App.4th at pp. 492-493.) This interpretation has been utilized by California courts since at least 1957, and as early as 1909 in other state courts interpreting similar statutes. (Oppenheimer v. Sunkist Growers, Inc., supra, 153 Cal.App.2d at pp. Supp. 898-899; St. Louis, I.M. & S.R. Co. v. Bryant (1909) 92 Ark. 425 [122 S.W. 996].) Riley does not cite, nor have we found, any case law supporting her contention that section 203 requires trial courts to calculate the waiting time penalty with a fixed eight-hour workday.

Plaintiff contended that the court should import section 510(a) statement that eight hours of labor constitutes a “day’s work” into section 203′s waiting time penalty calculation.  But the court concluded that section 510(a) “applies to overtime pay rates and thus is not applicable to section 203′s waiting time penalty calculation”.  The court noted that “neither a ‘day’s work,’ nor ‘an 8 hour workday,’ nor any reference to section 510 appears in section 203.”  Id. *2.  The court found that section 203(a) requires “employee-specific calculations because it refers to ‘the wages of an employee’ or the employee’s wage per the employee’s hours worked.”

Judges and Attorneys

The appeal was taken from a judgment of Hon. Eddie C. Sturgeon, the Superior Court of San Diego County.

Justice Gilbert Nares wrote the opinion, with Justices Patricia D. Benke and Cynthia Aaron concurring.

Scott A. McMillan of The McMillan Law Firm, APC in La Mesa, CA represented Plaintiff and Appellant.

Marc Howard Mandelblatt of the Law Offices of Marc Mandelblatt in San Diego, CA represented Defendant and Respondent.

By CHARLES H. JUNG

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One Year Statute of Limitations Applies to Waiting Time Penalty Claim Where Wages Not Sought

Wait Time = Batman
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Hon. Howard R. Lloyd today issued an unpublished opinion today confirming that a one year statute of limitations pursuant to Cal. Code Civ. Proc. § 340(a) applies to a plaintiff’s claim for waiting time penalties.  Pinheiro v. ACXIOM Information Security Services, Inc., 2010 WL 3058081 (N.D. Cal. August 03, 2010) (Slip Op.)

Plaintiff argued that a three year statute of limiations applied, citing Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 999 P.2d 706, 96 Cal.Rptr.2d 518 (2000), in which the plaintiff sought both unpaid wages and waiting time penalties.  The court rejected this argument and granted defendant’s motion to dismiss this claim without leave to amend.

Plaintiff Carla Pinheiro was an employee of defendant Aerotek, Inc. (Aerotek), an employment agency. She alleges that she was assigned to work as a temporary customer service representative for defendant Quest Diagnostics Clinical Laboratories, Inc. (Quest). The gravamen of Pinheiro’s complaint as to Aerotek is that Aerotek wrongfully terminated her employment (Sixth Claim for Relief) and failed to timely pay her final wages in violation of California Labor Code sections 201-203 (Seventh Claim for Relief). Plaintiff also asserts a claim against Aerotek under California Bus. & Prof.Code section 17200 (Eighth Claim for Relief) based upon the alleged failure to timely pay her final wages.

Aerotek moved to dismiss Pinheiro’s seventh and eighth claims for relief concerning the alleged failure to timely pay her final wages.

The Court found that, based upon the law as it currently stands, plaintiff’s seventh and eighth claims for relief as to Aerotek should be dismissed.

Cal. Labor Code §§ 201-203 COA

At issue was whether Pinheiro’s claim for waiting time penalties is subject to a one-year statute of limitations (Aerotek’s view) or to a three-year limitations period (Pinheiro’s position). The court held that the one-year statute of limitations under Cal.Code Civ. Proc. § 340(a) applies, and plaintiff’s seventh claim for relief therefore is time-barred. See McCoy v.Super. Ct., 157 Cal.App.4th 225, 68 Cal.Rptr.3d 483 (2008) (holding that in action seeking only waiting time penalties, and not wages, the one-year statute of limitations under Cal.Code Civ. Proc. § 340(a) applies). Cf. Ross v. U.S. Bank Nat’l Ass’n, Case No. C07-02951 SI, 2008 WL 4447713 *4 (N.D. Cal., Sept. 30, 2008) (concluding that the three-year statute of limitations period under Cal. Labor Code § 203 applied where plaintiff sought unpaid wages, as well as waiting time penalties). Plaintiff’s cited authority, Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 999 P.2d 706, 96 Cal.Rptr.2d 518 (2000), in which the plaintiff sought both unpaid wages and waiting time penalties, but the Court held that this “does not compel a contrary conclusion.”

Cal. Bus. & Prof.Code § 17200 COA

The court held that remedies under California Labor Code § 203 are penalties, and not restitution, and therefore cannot be recovered under the UCL. In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F.Supp.2d 609, 619 (N.D. Cal.2007); Tomlinson v. Indymac Bank, F.S.B., 359 F.Supp.2d 891, 895 (C.D. Cal.2005).  The court dismissed the 17200 claim as to Aerotek without leave to amend.

Alison Marie Miceli, Michael James Grace, and Graham Stephen Paul Hollis for Plaintiff.

Jonathan Morris Brenner, Caroline McIntyre, and Alison P. Danaceau for Defendants

By CHARLES H. JUNG

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