268 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com 7.25 Civil Penalties 7.25.1 Civil penalties collectible by the Labor Commissioner Failure to comply with Wage Orders triggers a civil penalty of $50 for each affected employee for each pay period of underpayment for any initial violation, and $100 for each affected employee for each relevant pay period for each further violation.613 Special penalties (which the California Supreme Court has called an extra hour of premium pay) apply to violations of meal-period and rest-break requirements.614 Violations of the Labor Code also can trigger civil penalties. Civil penalties, whether created by a Wage Order or by the Labor Code, can be recovered by the Labor Commissioner. Under California’s peculiar PAGA statute (explained immediately below), civil penalties can also be recovered in private lawsuits by aggrieved employees acting as private attorneys general. 7.25.2 Private recovery of civil penalties for Labor Code violations Various Labor Code provisions historically have subjected employers to enormous civil penalties. The California Legislature believed, however, that the civil penalties potentially available against scofflaw employers were too small, and were too rarely sought. This belief led to the Labor Code Private Attorneys General Act of 2004 (PAGA). PAGA amended certain Labor Code provisions (such as sections 210, 225.5, and 1197.1) to double the existing per-employee, per-pay-period civil penalties from $50 for a first violation and $100 for further violations to $100 for a first violation and $200 for further violations, and created new penalties as well (see below). More generally, PAGA created a new civil penalty for each Labor Code violation except those for which a civil penalty already was provided.615 PAGA penalties can also apply to Wage Order violations, by virtue of a Labor Code section that incorporates Wage Order provisions within the Labor Code.616 Charted below are some commonly applicable Labor Code provisions, together with common Wage Order provisions, and the associated civil penalties. “LC 210” refers to civil penalties imposed by section 210 for certain wage payment violations—$100 per employee for the first violation, $200 per employee for each later violation or for willful or intentional violation, plus 25% of the amount unlawfully withheld.617 “LC 225.5” refers to civil penalties imposed by section 225.5 for certain additional wage payment violations— $100 per employee for first violation, $200 per employee for each later violation or for willful or intentional violation, plus 25% of the amount unlawfully withheld.618 “LC 558” refers to civil penalties imposed by section 558 for violations of certain Labor Code provisions and Wage Order provisions regulating hours and days of work: $50 per “underpaid employee” per each pay period of underpayment for the first violation (in addition to an amount sufficient to recover underpaid wages), and $100 per underpaid employee per each pay period for each further violation (in addition to an amount sufficient to recover underpaid wages).619 “LC 1197.1” refers to civil penalties imposed under section 1197.1 for failure to pay minimum wage—$100 per underpaid employee per pay period for the first intentional violation and $250 per underpaid employee per pay period (regardless of intent) for each further occurrence of the “same specific offense.”
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