©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 215 Special relief for certain employers of temporary employees. The Legislature, responding to the special needs of certain employers of temporary workers, has adopted a sensible approach to final pay that in a business-friendly state would apply to all employers. As to final pay for temporary service employees working for certain employment agencies, a 2008 law generally permits weekly payments, “regardless of when the assignment ends,” subject to certain exceptions pertaining to daily work assignments, labor disputes, and other special situations.148 Similarly as to print shoot employees, the Photoshoot Pay Easement Act of 2019 authorizes payment of wages to “print shoot employees”—individuals hired for a limited duration to render services relating to a still-image shoot for use in print, digital, or internet media—on the next regular payday after the employment ends, rather than subjecting the employer to liability for failing to pay final wages on the last day of employment. Further, final wages can be mailed or made available to the employee at a location specified by the employer in the county where the employee was hired or worked, and the payment is deemed to occur on the date that pay is mailed or made available.149 Motion picture employers enjoy similar special legislation.150 7.5.4 Waiting-time penalties Willful failure to pay wages due upon termination can result, under section 203 of the Labor Code, in a “waiting time” penalty equal to the employee’s daily rate of pay for up to 30 working days.151 The employer’s good faith belief that no wages are owed is a defense,152 but ignorance of the law or mistakes in calculation generally are not defenses to waiting time penalties claims.153 (See § 13.3.) Although penalties most obviously apply to failures to pay timely for work done during the final pay period, the DLSE and courts have also applied the penalty where the final paycheck fails to cover wages earned at any time during employment. Absent some constitutionally imposed limitation,154 the amount of the waiting-time penalty does not depend on the amount of wages unpaid at the time of termination. Thus, an employer who has underpaid an employee by a grand total of $1, and who does not discover the underpayment until more than 30 working days after the employee has quit, could owe the employee penalties, measured by 30 working days, or six weeks, of wages. The Court of Appeal has held that trial judges lack discretion to reduce the amount of waiting-time penalties.155 A trial judge can effectively reduce the amount of penalty, however, by finding that part of the delay in payment resulted from inadvertent clerical error and thus was not willful.156 To make matters still worse for employers, the limitations period for claiming waiting-time penalties is three years, not the one-year period generally applying to penalty claims. One Court of Appeal decision held that a claim for penalties based only on the late payment of final wages (where the employer had already paid the underlying wages due) should be subject to the one-year statute of limitations,157 but the California Supreme Court held that a three-year period applies instead. Softening the blow somewhat, the same California Supreme Court decision held that waiting-time penalties are not recoverable as restitution under California’s Unfair Competition Law,158 in that those penalties “would not restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.”159 Accordingly, plaintiffs seeking waiting-time penalties cannot use a UCL claim to extend the limitations period to four years. The Office of the Chief Counsel of the IRS has opined on the tax treatment of this California peculiarity, stating that section 203 penalties are not wages for purposes of employment tax. According to this opinion, an employer paying section 203 penalties need not withhold taxes for the terminated employee or pay employer-side payroll taxes.160
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