California Employers Cannot Simply Ignore Minimum Wage Laws

California has some of the strictest worker protections in the nation, especially when it comes to minimum wage laws. However, it’s not uncommon for employers to try to avoid these laws. Some employers argue that they did not know their actions were illegal. A recent ruling from the state’s highest court made one thing very clear: an employer who fails to pay minimum wage cannot escape paying liquidated damages by claiming they were unaware of the law. The California Supreme Court clarified the burden of proof employers must meet when they raise the good-faith defense in an attempt to avoid paying these damages. 

This recent decision sends a strong message to both employers and employees. Employers should know that ignorance of employment laws is not an excuse, and as an employee, you should know that you have powerful protections when you speak up against wage violations.

About the Case

Recently, the California Supreme Court clarified what employers must prove when claiming a “good faith” defense to avoid paying liquidated damages for minimum wage violations. In this case, the plaintiff, whom, for purposes of this article, we will refer to as L.I., worked on property owned by the defendants. In return for doing maintenance work, the plaintiff was given a house and was not required to pay rent. The plaintiff did not receive any other compensation or benefits.

After some years, the above arrangement came to an end. L.I. then filed a claim for unpaid wages. In his claim, he sought to recover liquidated damages under Labor Code section 1194.2. The plaintiff alleged that his employers misclassified him as an independent contractor and failed to pay him the minimum wage. However, the employers argued that since both parties believed that he was an independent contractor, they shouldn’t be made to pay liquidated damages.

The court sided with the employers. It found that the defendants acted in “good faith” by not compensating the plaintiff and reasonably thought they were following the law. The decision was based on the determination that L.I. and his employers both anticipated that L.I. would do his work in return for free housing, and neither party believed the plaintiff would receive wages or be considered an employee. This decision was affirmed by the Appeals Court.

However, after reviewing the case, the state Supreme Court disagreed. The Court held that ignorance of the law is not enough in such a case, even if both the employer and worker shared the misunderstanding. For an employer to successfully raise the “good faith” defense, they must show they made a reasonable attempt to understand the law. Since the defendants did not present any evidence of such an attempt, they could not rely on this defense.

What Does This Mean for Employees?

The above decision is a win for California employees, as it ensures employers cannot avoid liability by simply claiming they did not know the law. If an employer fails to pay your wages, you can seek not just back pay, but also liquidated damages, which usually double the recovery. For example, if you are owed $1,000 in unpaid wages, you may also be eligible to receive an additional $1,000 in liquidated damages.

But to protect your rights, ensure you maintain detailed records and consult a qualified employment lawyer.

Contact a California Employment Lawyer

If an employer has denied you fair pay or benefits, contact a California employment lawyer near you for legal help.