The Person Responsible for Failing to Pay Employees Minimum Wage and Overtime Pay Can Be Held Personally Liable Under PAGA

The Person Responsible for Failing to Pay Employees Minimum Wage and Overtime Pay Can Be Held Personally Liable Under PAGA

By Robert L. Rediger, Esq.

On September 28, 2018, the Fourth Appellate District Court of Appeal in Atempa v. Pedrazzani held that a person violating the minimum wage and overtime pay provisions of the Labor Code may be held personally liable for the plaintiffs’ attorney fees, costs, and civil penalties under the California Private Attorneys General Act (“PAGA”). The Atempa court rejected Mr. Pedrazzani’s argument that because he was merely “an individual officer of the corporate employer” he should not be liable for such monies because he was not the plaintiffs’ “employer,” and there was no evidence that he was the alter ego of the corporate employer or that he acted outside the scope of his agency.

Under PAGA, a former or current aggrieved employee may bring “a representative action” on behalf of him or herself, coworkers, and the State of California, against his or her employer for various violations of the Labor Code. After exhausting administrative remedies, a plaintiff may prosecute a PAGA lawsuit without the action being certified as a class action. Civil penalties under PAGA can be substantial, e.g., $100 for each aggrieved employee per pay period for the initial violation and $200 for each aggrieved employee per pay period for each subsequent violation. Under the Atempa decision, individual persons such as business owners, officers of a corporation, and/or agents may be held personally liable for certain wage and hour violations of the Labor Code regardless of structure of the employer.