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Labor/Employment,
California Supreme Court

May 14, 2024

California Supreme upholds employer’s good faith belief defense against Labor Code Section 226 Penalties

A defense is available to employers when it comes to section 226 premium penalties, based on dictionary definitions of “knowing” and “intentional” and the legislative history of section 226. The court also made the good faith defense available where the employer’s obligations are genuinely uncertain, but not where there is a failure to comply with well-established law.

Theodore E. Bacon

Partner-in-charge of the San Francisco office, Frost Brown Todd LLP

W. Michael Hensley

Counsel, Frost Brown Todd LLP

Shutterstock

In a May 4, 2023 article “Hold your breath: California courts continue to weigh wage statement violations,” published in the Los Angeles Daily Journal, we explored a split in thinking on the subject of whether employers can defeat Labor Code section 226 penalties for a knowing and intentional failure to report unpaid wages, or any other required information, on a wage statement by proving a good faith belief def...

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