Last year, the California
Supreme Court ruled that corporate officers and directors can’t be held
personally liable to an employee for unpaid wages.1 A few months later, a California
Court of Appeals ruled that even the Division of Labor Standards Enforcement
(DLSE) can’t go after an officer or director on behalf of an employee for the
company’s failure to pay wages. The DLSE appealed that ruling to the California
Supreme Court, which has now denied the petition for review.2 This latest development
affirms that officers and directors are generally off the hook for unpaid wages.
But despite these rulings, keep in mind that there could be exceptions, such as
if it turns out that the corporate officer is the “alter ego” of the company.
Join us this fall in San Francisco for the California Employment Law Update conference, a 3-day event that will teach you everything you need to know about new laws and regulations, and your compliance obligations, for the year ahead—it’s one-stop shopping at its best.
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1 Reynolds v.
Supreme Court No. S115823, 2005
2 Jones v.
Court of Appeals (Dist. 4) No. G030347, 2006