Sep 14, 2010

California Increases Penalties Against Wage and Hour Violators

Employers familiar with California’s complex wage and hour laws will probably not be surprised to learn that California has passed new legislation imposing even more severe penalties on employers who violate the state’s wage-payment laws.

The first measure doubles the amount of liquidated damages that employees can recover in minimum wage lawsuits. Previously, a successful employee was generally entitled to liquidated damages equal to the amount of unpaid wages.

The second measure makes it a crime for an employer to fail to furnish employees with properly itemized wage statements. A violation of this law would constitute a misdemeanor punishable by imprisonment of up to one year, a fine of up to $1,000, or both.

The California legislature created the new laws purportedly to confront the growing problem of employers paying their workers under the table. Proponents of the bills contend that the laws will protect law-abiding companies from losing business to competitors whose unlawful activities create an unfair advantage. However, pro-business groups, including the California Chamber of Commerce, counter that the laws will simply make life more difficult for honest employers that are already subject to a complicated web of laws and regulations.

If you have questions regarding compliance with California’s wage and hour laws, please do not hesitate to contact your employment counsel at Smith, Gambrell & Russell, LLP.

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