Seyfarth Shaw LLP | www.seyfarth.com Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) 215 employer. Thus, the applicable statute of limitations is the three-year statute governing statutory liabilities and not the one-year statute governing penalties.) Does UCL extend the Statute of Limitations? It is unclear as there is no controlling authority. There is an argument that meal and rest premiums should not be recoverable as restitution under the UCL because the employee did not put in labor to earn the premiums, and thus has no “ownership interest” in the premiums. See Pineda v. Bank of America, 50 Cal. 4th 1389, 1401-02 (2010) (“permitting recovery of [Labor Code] penalties via the UCL would not ‘restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest’”; see also Kirby v. Immoos Fire Protection, Inc., 53 Cal. 4th 1244, 1255 (2012) (“a section 226.7 action is brought for the nonprovision of meal and rest periods, not for the ‘nonpayment of wages’”). However, this argument was undercut by the California Supreme Court’s decision in Naranjo v. Spectrum Security Services, Inc.,13 Cal. 5th 93 (2022). In Naranjo, the Court rejected the employer’s arguments based on Pineda and Kirby that meal and rest premiums did not constitue “wages” that would trigger waiting time penalties under Section 203 or wage statement penalties under Section 226. Id. at 110-114. The Court stated that meal and rest premiums can be understood as a wage to compensate employees for the work they performed during a meal or rest period, similar to how overtime pay is considered wages to compensate employees for working long hours. Id. at 109. Although Naranjo did not address whether meal and rest premiums could be recovered under the UCL, by analogizing premiums to overtime wages, and by distinguishing Pineda and Kirby, the Court provided a solid basis for arguing that the four-year limitations period under the UCL does apply. 4. Non-Compliant Wage Statements Statutory Provision: Labor Code § 226. Labor Code § 226 provides that when an employer “knowingly and intentionally” violates Section 226(a), any employee “suffering injury” may recover actual damages or a penalty of $50 for the first pay period violation and $100 for each subsequent pay period, up to a maximum of $4,000 per employee. Statute of Limitations: 1 year. Cal. Code of Civil Procedure § 340. Does UCL extend the Statute of Limitations? No. Labor Code penalties are not recoverable under the UCL because they do not constitute restitution. See, e.g., Pineda v. Bank of America, 50 Cal. 4th 1389, 1401-02 (2010) (Labor Code section 203 waiting time penalties are not recoverable under the UCL). 5. Private Attorneys General Act (PAGA) Statutory Provision: Labor Code § 2698, et seq. Where no specific civil penalty previously attached to a Labor Code violation, the PAGA penalty is $100 for each aggrieved employee per pay period for an initial violation and $200 for every further violation. Labor Code § 2699(f )(2). Statute of Limitations: 1 year. Cal. Code of Civil Procedure § 340; Brown v. Ralphs Grocery Co., 28 Cal. App. 5th 824, 839 (2018).
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