LOS ANGELES (Legal Newsline) - Good intentions have paid off for a company sued in California for failing to include reimbursement for rest breaks on wage statements for employees.
Penalties and attorney fees should not be awarded in the class action case brought by Gustavo Naranjo, the state's Second Appellate District ruled Feb. 27. The court found Spectrum Security Services thought it was in compliance with state law regarding compensation for breaks.
The state Supreme Court had ruled extra pay for missed breaks falls under "wages" that must be reported on wage statements and paid within deadlines when an employee left the job. But it asked the Second District whether Spectrum's failure to do so was willful.
Evidence introduced at trial found Spectrum's failure was not willful, as Section 203 of state labor law requires plaintiffs to prove. Spectrum provides custodial services for federal facilities, and a vice president testified all of its contracts are with federal agencies.
"(A)lthough district courts in California are divided on the question, the majority view is that an employer's good faith belief it is not violating the California Labor Code precludes a finding of a knowing and intentional violation," the ruling says.
"We are unpersuaded by the approach Naranjo advances, and that a minority of federal district courts have adopted, which is that 'knowing and intentional' is a 'minimal standard' that may be satisfied by simply showing an employer provided an inadequate wage statement not as a result of clerical error or inadvertent mistake."
The decision strikes a nearly $400,000 penalty for omitting the wages earned during breaks on wage statements, as well as attorney fees.