An Administrator's Guide to California Private School Law

Chapter 6 – Wage And Hour Laws

4. P ENALTY F OR F AILURE T O P AY W AGES O N T ERMINATION A school that willfully fails to pay the final wages to a terminated or quitting employee is subject to “waiting time” penalties. 670 Further, the final wages may not include deductions other than those allowed by law. If a school willfully fails to pay wages when due to an employee who is discharged or quits, the employee’s wages continue at the same rate until paid or until the employee files a civil action, but not for more than 30 calendar days. a. “Willful” And “Good Faith Dispute” Defined A willful failure to pay wages occurs when a school intentionally fails to pay wages to an employee when those wages are due. However, a good faith dispute that any wages are due will preclude imposition of waiting time penalties. A “good faith dispute” that any wages are due occurs when a school presents a defense that would preclude any recovery on the part of the employee. The fact that a defense is ultimately unsuccessful will not preclude a finding that a good faith dispute did exist. Defenses presented which, under all the circumstances, are unsupported by any evidence, are unreasonable, or are presented in bad faith, will prevent a finding of a “good faith dispute.” 671 b. “Any Wages” Defined The term “wages” includes all amounts paid for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation. 672 “Wages” includes monetary amounts as well as the other benefits an employee is entitled to, such as the value of room, board, and clothes. 673 In addition, if a school fails to pay all premium pay required by the Labor Code and Wage Orders, such as overtime premiums, reporting time pay, meal period/rest period premium pay, and split shift premium pay, the employee is entitled to waiting time penalties. 674 6. “A CTION ” D EFINED The waiting time penalties stop accruing after a school pays the wages, or the employee “commences an action.” An employee commences an action by filing a complaint in court. 675 However, filing a claim with the Labor Commissioner is not considered commencing an action, and does not stop penalties from accruing. 7. P AYMENT O F W AGES N OT C ALCULABLE U NTIL A FTER T ERMINATION There are situations where wages cannot be calculated until after termination. Under this scenario, those wages are not due until they can be calculated. Once the amount due can be calculated, waiting time penalties for failure to pay start accruing. 676

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