California Supreme Court: Waiting Time Penalties are..Penalties!

I know, sounds obvious. But folks were claiming that waiting time penalties, like meal period penalties, are a form of wage.  They were making this argument to permit claims for waiting time penalties under California's unfair competition law, because that law has a four year statute of limitations.

No sale, said the California Supreme Court in Pineda v. Bank of America (opinion here). In that case, Pineda received his wages four days late. He brought a class action for waiting time penalties. on behalf of everyone who was paid late under Bank of America's final pay policies. 

Pineda argued that he should be able to sue for waiting time penalties under California's unfair competition law (Bus. Prof. Code section 17200).  The Supreme Court rejected that argument because waiting time penalties are not "restitution," the only time that money is recoverable under the UCL.  Plaintiffs wanted to use the UCL to benefit from that law's four-year statute of limitations.

But the Supreme Court giveth, and taketh away.  The other issue decided today is that the statute of limitations for waiting time penalties is not affected by whether the employer ultimately paid the wages, albeit late.

The lower courts dismissed the case because he did not file his case within a year of his termination. The lower courts applied case law like in McCoy v. Superior Court (2007) 157 Cal.App.4th 225, 229-230. There, the court of appeal held a one-year statute of limitations applies to waiting time penalty claims if the wages are paid as of the time of suit. 


The Supreme Court rejected McCoy and held that in all instances, the waiting time penalty statute, Labor Code Section 203, imposes the same statute of limitations. That section says that the statute of limitations for waiting time penalties is the same as the limitations period applied to the underlying wage claims.  The Supreme Court said that rule applies whether the wages are paid or not at the time of suit.

DGV