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Personal Liability For Wage and Hour Claims

7.20.22   

By Jennifer Jacobus, PHRca, SDEA Director of HR Services

By now you know that running a business in California has its challenges, to put it mildly.  Compared to most other states, California has more stringent wage and hour laws, employee leave laws and…This recent court case,

In a recent California Court of Appeals case, it was ruled that Executives can be held personally liable for wage violations.  In Seviour-Iloff v. LaPaille, the employer, a property owner, provided his employees with free rent in exchange for services such as collecting rest and maintaining the property, no additional wages were paid the employees outside of the free rent.  While employers can credit some lodging costs against an employee’s minimum wage requirements, not paying them any additional wages for work performed is not a permissible practice in California and Iloff (employee) filed a claim with the Labor Commission seeking unpaid wages in the amount of $132,880.

The Labor Commissioner agreed that the employees were entitled to recover regular and overtime wages, liquidated damages, interest, waiting time penalties, and additionally held that LaPaille was personally liable for those amounts.  Of course there was an appeal, but the Appellate court found in favor of Iloff because the California Labor Code provides that any “person acting on behalf of an employer, who violates, or caused to be violated, any provision regulating minimum wages . . . may be held liable as the employer for such violation.”  In summary, the $132,880 verdict is a personal liability against the CEO of LaPaille.

While this is an extreme case, no one wants to be in the shoes of LaPaille’s CEO.  Employers and those acting on behalf of the employer must be diligent in their wage and hour compliance. 

If you have questions or concerns, please call SDEA, 858-505-0024.  Remember we are here WITH you!

Contact us: 858.505.0024