The California Private Attorneys General Act (PAGA) permits an "aggrieved employee" to step into the shoes of the Labor Commissioner and recover civil penalties and attorneys' fees against those who violate the Labor Code. In Atempa v. Pedrazzani, the California Court of Appeal held that an individual (i.e. an owner, director, officer, or agent of a corporate employer) can be held personally liable for civil penalties and attorneys' fees under the PAGA resulting from the employer's failure to pay minimum wage and overtime.
In Atempa v. Pedrazzani, two employees filed a representative action under PAGA against the corporate entity that employed them and the individual defendant who was the owner, officer, and director of the corporate entity. The plaintiffs sought, among other claims, to recover civil penalties under Labor Code Sections 558(a) and 1197.1(a) for minimum wage and overtime violations.
Labor Code Section 558(a) provides that an employer "or other person acting on behalf of an employer" who violates or causes a violation of applicable wage and hour laws shall be subject to a civil penalty. Similarly, Labor Code Section 1197.1(a) provides that an employer "or other person acting either individually or as an officer, agent, or employee of another person" who pays or causes to pay an employee less than the state's applicable minimum wage shall be subject to a civil penalty.
Following trial, the Superior Court found the corporate defendant and the individual defendant jointly and severally liable for civil penalties, interest on the civil penalties, and attorneys' fees and costs. The individual defendant appealed and argued that, as a matter of law, he could not be held individually liable for civil penalties and attorneys' fees under the Labor Code.
The appellate court rejected this argument because the two Labor Code sections at issue "expressly allow for the recovery of such civil penalties from an officer/agent of the corporate employer," and these civil penalties and attorneys' fees can therefore be recovered by the plaintiffs via a PAGA representative action.
The Atempa decision underscores the wave of PAGA-based wage and hour litigation that is sweeping across California, and extends that risk to not just corporate employers but also individual owners, corporate officers, and agents of those businesses. It is critical that employers in California remain vigilant and ensure that their employment practices are compliant with California wage and hour laws.
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