I read an article this past weekend indicating that INDIVIDUALS in California may have liability for wage and hour violations of employers. A scary thought for employee managers indeed.
“…Enterprising members of the plaintiffs’ bar have recently sought to read the new law as authorizing a private right of action against individual managers. These lawyers have seized upon a legislative oversight. Although 12 of the 13 bill’s enactments refer to the Labor Commissioner, the 13th provision—Section 558.1 of the Labor Code—does not expressly mention “Labor Commissioner.” These lawyers have seized upon this obvious oversight to argue that Section 558.1 goes further than its 12 companion provisions and somehow creates a private right of action against individuals.”
That means potential personal liability for managers in California relating to unpaid overtime, unpaid minimum wage, denied meal/rest breaks, untimely termination pay, inadequate wage statements, and failure to reimburse for employee business expenses.
Fortunately for Iowa based managers within companies, there are not currently provisions under Iowa law that would hold a manager personally liable for such violations as the language in the Iowa wage payment collection statute is limited to an “employer”. But if you are an employer from Iowa with California operations and employees, this is something to put on your radar screen. The author of the article warns employers would be well-advised to take proactive measures to ensure compliance with California’s unique wage and hour landscape, such as auditing current pay practices and policies. It is expected the courts will remedy the interpretation in California but you just never know about the courts so this will be an interesting issue to follow.