78 Litigating CA Wage & Hour Class and PAGA Actions (24th Edition) Seyfarth Shaw LLP | www.seyfarth.com Then, in 2024, the California Supreme Court resolved this issue in a surprisingly helpful decision for employers, Naranjo v. Spectrum Security Services, Inc.376 There, the Court held that “if an employer reasonably and in good faith believed it was providing a complete and accurate wage statement in compliance with the requirements of section 226, then it has not knowingly and intentionally failed to comply with the wage statement law.”377 In other words, yes, the good faith defense applies to Labor Code 226 (and the Court also reaffirmed its application to Labor Code 203 and found the standard was the same for the two statutes).378 The Court cautioned, however, that an employer’s mistaken belief that it complied with Section 226 would not be “reasonable” when the employer's position was clearly erroneous or based on an unexcused failure to ascertain the law.379 see also McKenzie v. Federal Express Corp., 765 F. Supp. 2d 1222 (C.D. Cal. 2011) (judgment entered against defendant for PAGA penalties where violation under Section 226 is established; injury need not be shown). 376 15 Cal. 5th 1056 (2024). 377 Id. at 1065 378 Id. at 1081. 379 Id. at 1086.
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