There are three different statute of limitations potentially applicable for terminated employees suing for wages and penalties due but delayed under Labor Code §203, which reads in pertinent part:
"(a) If an employer willfully fails to pay... any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced...
"(b) Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise."
The issue in this partially published opinion was which statute of limitations was applicable when, as in this case, the employee is suing for just the penalties -- since the underlying late wages had already been paid.
Under Business and Professions Code §17200 (the Unfair Competitions statute), there's a four-year statute of limitations. Some time ago, another superior court (not involved with this case) had ruled that the late-wage penalties were not only to be considered "wages," but also fell within this 4-year limitations period of the unfair labor practice statute.
But another limitations statute, Labor Code §202, allows a three-year period for recovering unpaid wages. This is the statute under which the plaintiff in this action sought relief.
The trial court had ruled that a one-year statute of limitations, found in the Code of Civil Procedure pertaining to penalties, applied.
The appellate court ruled here that, first off, the penalties portion under Labor Code §203 was NOT wages, just penalties, so the longer B&P code section of 4-years did NOT apply.
Next, it ruled that only if the penalties were sought in conjunction with the underlying wages due could a party sue under Labor Code §202's 3-year statute.
It thus concluded that when a party was only seeking the penalties alone, it was stuck with the one-year statute of limitations for an action for a penalty found in Code of Civil Procedure §340(a).
The case is Pineda v. Bank of America.
To read the full opinion,
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CLICK HERE.
