Ignorance of the Law is no Excuse

“Ignorance of the law is no excuse,” particularly when it comes to an employer’s responsibility to pay its workers according to current wage laws. That’s the upshot from the California Court of Appeal’s opinion in Diaz v. Grill Concepts Services, Inc., 23 Cal. App. 5th 859 (2018).

In Diaz, the employer claimed its failure to pay timely its workers was not “willful” – an element of proof for a waiting time penalty claim under Labor Code § 203 – because the employer was purportedly unable “to locate” an amendment to a local Los Angeles ordinance. This amendment to the local wage law required employers to pay certain hotel workers a specific living wage which exceeded the state minimum wage law. The court was unpersuaded.

The court explained several circumstances under which an employer’s failure to pay all wages due upon termination or resignation are not “willful,” including: (1) uncertainty in the law, (2) representations from a taxing authority that no further payment is warranted, and (3) “the employer’s ‘good faith mistaken belief that wages are not owed’ grounded in a ‘good faith dispute,’ which exists when the ‘employer presents a defense, based in law or fact which, if successful, would preclude any recovery on the part of the employee.” Id. at 868. None applied in this case.

To the contrary, the “undisputed facts show that Grill Concepts suspected it was underpaying its employees and went so far as to confirm that the living wage law was in the midst of being amended, but then did nothing else.” Id. at 869. The employer just kept running the same web search which failed to produce information about the amended statute. Id. Because the employer ignored multiple, obvious ways to inform itself of a change in the living wage law, the court affirmed that the employer’s “inability to locate the amended ordinance does not preclude the finding that its failure to pay was willful” for purposes of establishing Labor Code § 203 waiting time penalty liability. Id. [1]

While it should not have taken a court of appeal to state the obvious, nevertheless, workers and workers’ advocates should find comfort in knowing that California courts will not allow an employer to bury its head in the sand to avoid properly paying its workers.

If your employer refuses to pay you earned wages because it claims not to know the law, please contact Bryan Schwartz Law for a free case evaluation to determine if we can assist you.

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[1] The court also rejected the employer’s argument that the amended statute was unconstitutionally vague, in part because of “the absence of any evidence that any other hotelier or restauranteur had any problem reading the ordinance to pay its employees the proper living wage.” Id. at 873. In addition, the court rejected the employer’s misreading of Labor Code § 203 as purportedly allowing a trial court to waive waiting time penalties “for equitable reasons” when the relevant statutory language lacks any such discretionary authority and instead includes language mandating the imposition of such penalties upon a finding of willful violation, as was the case here. Id. at 874-75.