Model Amanza Smith
worked for one day at a hair show for L’Oréal USA, Inc., at an agreed rate of
$500/day. But when L’Oréal took more than two months to pay her, Smith filed a
class action lawsuit on behalf of herself and other day models.
Smith charged that
L’Oréal violated Labor Code Section 201, which requires an employer that
discharges an employee to pay wages earned immediately. She sought what is known
as a waiting-time penalty of up to 30 days’ pay, which Labor Code Section 203 requires
when an employer willfully fails to pay a discharged employee in a timely
manner. (To calculate waiting-time penalties, an employee’s wages continue to
accrue for every day payment is late, up to 30 days. Penalties accrue not only
on days the employee might have worked but also on nonworkdays.)
L’Oréal, on the other
hand, argued that Smith wasn’t discharged—rather, her fixed term of employment merely
ended. Thus, immediate payment under Labor Code Section 201 wasn’t required,
and waiting time penalties didn’t apply. Smith responded that the term “discharge”
as used in Labor Code Section 201 applies broadly to every job termination,
even to one like hers that results from completing a project.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Case Pending Before High
Court
Last year, a
sided with L’Oréal and dismissed the case. But now the California Supreme Court
is reviewing the case—and there are indications that the high court may be on
the employee’s side.
During recent oral
arguments in the case, several justices commented harshly on the company’s
position. For example, Justice Chin, addressing L’Oréal’s counsel, stated that
if the court held in the company’s favor, “then day laborers are going to have
to wait three to four weeks to get paid.” And Justice Baxter argued that accepting
L’Oréal’s position would mean that while workers who are fired have the right
to collect wages immediately, day workers who serve out their terms of
employment don’t have similar rights and may have to wait weeks or months for
their paychecks—an unfair result.
Stay Tuned
The high court’s ruling
is expected by the end of summer. We’ll have full details on this case as soon
as the decision is issued. Should the court go against L’Oréal, we’ll provide
compliance strategies you can use for avoiding waiting-time penalties.