CACI 2704 Damages—Waiting-Time Penalty for Nonpayment of Wages (Lab. Code, §§ 203, 218)

California Civil Jury Instructions CACI

2704 Damages—Waiting-Time Penalty for Nonpayment of Wages (Lab. Code, §§ 203, 218)

If you decide that [name of plaintiff] has proved [his/her/nonbinary pronoun] claim against [name of defendant] for [unpaid wages/[insert other claim]], then [name of plaintiff] may be entitled to receive an award of an additional penalty based on the number of days [name of defendant] failed to pay [his/her/nonbinary pronoun] [wages/other] when due.

To recover this penalty, [name of plaintiff] must prove all of the following:

1.That [name of plaintiff]’s employment with [name of defendant] ended;

2.That [name of defendant] failed to pay [name of plaintiff] all wages when due; and

3.That [name of defendant] willfully failed to pay these wages.

The term “willfully” means only that the employer intentionally failed or refused to pay the wages. It does not imply a need for any additional bad motive.

[Name of plaintiff] must also prove the following:

1.The date on which [name of plaintiff]’s wages were due;

2.[Name of plaintiff]’s daily wage rate at the time [his/her/nonbinary pronoun] employment with [name of defendant] ended[; and/.]

[3.The date on which [name of defendant] finally paid [name of plaintiff] all wages due.]

[The term “wages” includes all amounts for labor performed by an employee, whether the amount is calculated by time, task, piece, commission, or some other method.]

Directions for Use

The first part of this instruction sets forth the elements required to obtain a waiting time penalty under Labor Code section 203. The second part is intended to instruct the jury on the facts required to assist the court in calculating the amount of waiting time penalties. Some or all of these facts may be stipulated, in which case they may be omitted from the instruction. Give the third optional fact if the employer eventually paid all wages due, but after their due date.

The court must determine when final wages are due based on the circumstances of the case and applicable law. (See Lab. Code, §§ 201, 202.) Final wages are generally due on the day an employee is discharged by the employer (Lab. Code, § 201(a)), but are not due for 72 hours if an employee quits without notice. (Lab. Code, § 202(a).)

If there is a factual dispute, for example, whether plaintiff gave advance notice of the intention to quit, or whether payment of final wages by mail was authorized by plaintiff, the court may be required to give further instruction to the jury.

The definition of “wages” may be deleted if it is included in other instructions.

Sources and Authority

Wages of Discharged Employee Due Immediately. Labor Code section 201.

Wages of Employee on Quitting. Labor Code section 202.

Willful Failure to Pay Wages of Discharged Employee. Labor Code section 203.

Right of Action for Unpaid Wages. Labor Code section 218.

“Wages” Defined. Labor Code section 200.

Payment for Accrued Vacation of Terminated Employee. Labor Code section 227.3.

Wages Partially in Dispute. Labor Code section 206(a).

Exemption for Certain Governmental Employers. Labor Code section 220(b).

“Labor Code section 203 empowers a court to award ‘an employee who is discharged or who quits’ a penalty equal to up to 30 days’ worth of the employee’s wages ‘[i]f an employer willfully fails to pay’ the employee his full wages immediately (if discharged) or within 72 hours (if he or she quits). It is called a waiting time penalty because it is awarded for effectively making the employee wait for his or her final paycheck. A waiting time penalty may be awarded when the final paycheck is for less than the applicable wage—whether it be the minimum wage, a prevailing wage, or a living wage.” (Diaz v. Grill Concepts Services, Inc. (2018) 23 Cal.App.5th 859, 867 [233 Cal.Rptr.3d 524], original italics, internal citations omitted.)

“ ‘[T]he public policy in favor of full and prompt payment of an employee’s earned wages is fundamental and well established …’ and the failure to timely pay wages injures not only the employee, but the public at large as well. We have also recognized that sections 201, 202, and 203 play an important role in vindicating this public policy. To that end, the Legislature adopted the penalty provision as a disincentive for employers to pay final wages late. It goes without saying that a longer statute of limitations for section 203 penalties provides additional incentive to encourage employers to pay final wages in a prompt manner, thus furthering the public policy.” (Pineda v. Bank of America, N.A. (2010) 50 Cal.4th 1389, 1400 [117 Cal.Rptr.3d 377, 241 P.3d 870], internal citations omitted.)

“ ‘The plain purpose of [Labor Code] sections 201 and 203 is to compel the immediate payment of earned wages upon a discharge.’ The prompt payment of an employee’s earned wages is a fundamental public policy of this state.” (Kao v. Holiday (2017) 12 Cal.App.5th 947, 962 [219 Cal.Rptr.3d 580], internal citation omitted.)

“The statutory policy favoring prompt payment of wages applies to employees who retire, as well as those who quit for other reasons.” (McLean v. State (2016) 1 Cal.5th 615, 626–627 [206 Cal.Rptr.3d 545, 377 P.3d 796].)

“[A]n employer may not delay payment for several days until the next regular pay period. Unpaid wages are due immediately upon discharge. This requirement is strictly applied and may not be ‘undercut’ by company payroll practices or ‘any industry habit or custom to the contrary.’ ” (Kao, supra, 12 Cal.App.5th at p. 962, original italics, internal citation omitted.)

“ ‘ “[T]o be at fault within the meaning of [section 203], the employer’s refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due. As used in section 203, ‘willful’ merely means that the employer intentionally failed or refused to perform an act which was required to be done.” …’ ” (Gonzalez v. Downtown LA Motors, LP (2013) 215 Cal.App.4th 36, 54 [155 Cal.Rptr.3d 18].)

“In civil cases the word ‘willful’ as ordinarily used in courts of law, does not necessarily imply anything blameable, or any malice or wrong toward the other party, or perverseness or moral delinquency, but merely that the thing done or omitted to be done, was done or omitted intentionally. It amounts to nothing more than this: That the person knows what he is doing, intends to do what he is doing, and is a free agent.” (Nishiki v. Danko Meredith, P.C. (2018) 25 Cal.App.5th 883, 891 [236 Cal.Rptr.3d 626].)

“[A]n employer’s reasonable, good faith belief that wages are not owed may negate a finding of willfulness.” (Choate v. Celite Corp. (2013) 215 Cal.App.4th 1460, 1468 [155 Cal.Rptr.3d 915].)

“A ‘good faith dispute’ that any wages are due occurs when an employer presents a defense, based in law or fact which, if successful, would preclude any recover[y] 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.” (Kao, supra, 12 Cal.App.5th at p. 963.)

“A ‘good faith dispute’ excludes defenses that ‘are unsupported by any evidence, are unreasonable, or are presented in bad faith.’ Any of the three precludes a defense from being a good faith dispute. Thus, [defendant]’s good faith does not cure the objective unreasonableness of its challenge or the lack of evidence to support it.” (Diaz, supra, 23 Cal.App.5th at pp. 873–874, original italics, internal citations omitted.)

“A proper reading of section 203 mandates a penalty equivalent to the employee’s daily wages for each day he or she remained unpaid up to a total of 30 days. … [¶] [T]he critical computation required by section 203 is the calculation of a daily wage rate, which can then be multiplied by the number of days of nonpayment, up to 30 days.” (Mamika v. Barca (1998) 68 Cal.App.4th 487, 493 [80 Cal.Rptr.2d 175].)

“ ‘A tender of the wages due at the time of the discharge, if properly made and in the proper amount, terminates the further accumulation of penalty, but it does not preclude the employee from recovering the penalty already accrued.’ ” (Oppenheimer v. Sunkist Growers, Inc. (1957) 153 Cal.App.2d Supp. 897, 899 [315 P.2d 116], citation omitted.)

“[Plaintiff] fails to distinguish between a request for statutory penalties provided by the Labor Code for employer wage-and-hour violations, which were recoverable directly by employees well before the Act became part of the Labor Code, and a demand for ‘civil penalties,’ previously enforceable only by the state’s labor law enforcement agencies. An example of the former is section 203, which obligates an employer that willfully fails to pay wages due an employee who is discharged or quits to pay the employee, in addition to the unpaid wages, a penalty equal to the employee’s daily wages for each day, not exceeding 30 days, that the wages are unpaid.” (Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 377–378 [36 Cal.Rptr.3d 31].)

“In light of the unambiguous statutory language, as well as the practical difficulties that would arise under defendant’s interpretation, we conclude there is but one reasonable construction: section 203(b) contains a single, three-year limitations period governing all actions for section 203 penalties irrespective of whether an employee’s claim for penalties is accompanied by a claim for unpaid final wages.” (Pinedasupra, 50 Cal.4th at p. 1398.)

Secondary Sources

4 Witkin, Summary of California Law (11th ed. 2017) Agency and Employment, §§ 437–439
Chin et al., California Practice Guide: Employment Litigation, Ch. 1-A, Introduction—Background, ¶  1:22 (The Rutter Group)
Chin et al., California Practice Guide: Employment Litigation, Ch. 11-B, Compensation—Coverage and Exemptions—In General, ¶ 11:121 (The Rutter Group)
Chin et al., California Practice Guide: Employment Litigation, Ch. 11-D, Compensation—Payment of Wages, ¶¶  11:456, 11:470.1, 11:510, 11:513–11:515 (The Rutter Group)
Chin et al., California Practice Guide: Employment Litigation, Ch. 11-J, Compensation—Enforcing California Laws Regulating Employee Compensation, ¶¶ 11:1458–11:1459, 11:1461–11:1461.1 (The Rutter Group)
Chin et al., California Practice Guide: Employment Litigation, Ch. 17-B, Remedies—Contract Damages, ¶ 17:148 (The Rutter Group)
1 Wilcox, California Employment Law, Ch. 5, Administrative and Judicial Remedies Under Wage and Hour Laws, § 5.40 (Matthew Bender)
21 California Forms of Pleading and Practice, Ch. 250, Employment Law: Wage and Hour Disputes, § 250.16[2][d] (Matthew Bender)
California Civil Practice: Employment Litigation, §§ 4:67, 4:74 (Thomson Reuters)