Understanding When Temporary Workers are Owed Their Final Wages

Payment of final wages after an employee resigns or is terminated can be a huge deal in California. Labor Codes Sections 201 to 203 outline important regulations employers must adhere to. Failure to adhere to the set rules can lead to substantial penalties. Employees may be entitled to up to thirty days of pay at their regular daily wage rate. However, the rules pertaining to temporary employees who get fired by a client employer while remaining employed by a staffing agency can be confusing.

A 2023 California Court of Appeal decision in Young v. REMX Specialty Staffing clarified how California Labor laws apply to temporary employees terminated by a client employer while remaining employed by a staffing agency. In this case, a staffing agency, REMX, assigned an employee to work for one of their clients, Bank of the West. Soon after, the staffing company ended the claimant’s assignment because she was abusive to one of its representatives during a call. The plaintiff was instructed not to report to work because of her behavior. Despite being told not to return to work, the claimant reported to work at the bank and was asked to leave by a REMX representative. According to the claimant, she was “basically” fired from REMX. However, a subsequent email showed that she was only instructed not to return to work at the bank.

After the claimant’s assignment ended, the staffing agency did not pay her for her work until the following week, based on their usual payroll schedule. The claimant sued REMX, alleging several causes of action. She filed individual claims and a PAGA claim. The individual claims were compelled to arbitration, and the Court of Appeal dismissed the appeal of her class actions. After the dismissal, the claimant could only claim PAGA penalties due to failure to pay final wages to a “discharged” employee on time. The claimant alleged that the defendant violated Labor Code Section 201.3(b)(4). According to this section, if a staffing agency assigns an employee to work for a client and then discharges the employee, it should immediately pay wages to the discharged employee. According to the plaintiff, her termination required immediate payment of final wages.

The court granted summary judgment to the defendant. According to the court, the right to immediate payment of wages upon discharge did not apply in this case because the claimant did not have an employment relationship with the client bank. According to the court, since the plaintiff’s employment relationship with the defendant had not ended, the defendant could instantly reassign the claimant to a different client, and she could continue accumulating wages. The court interpreted the law as mandating immediate payment of wages when an individual is discharged from employment by the temporary services employer and simply not when the individual is fired from a temporary work assignment.

This ruling means that staffing agencies can avoid the requirement of immediate wage payment to temporary workers upon the termination of a work assignment, provided the workers remain employed by the staffing agency and are available for future assignments.

Contact a California Employment Lawyer

Contact a California employment lawyer if you have questions or believe you are owed final wages.