Legal Alert: Reach of Employee's "Waiting-Time Penalties" Cut Off at Three Years


The California Supreme Court clarified on November 18, 2010, that the statute of limitations period for a former employee's claim of "waiting-time penalties" under California Labor Code section 203 ("Section 203") is exactly three years. No more, no less. This is true regardless of whether the penalty claim is asserted by itself or whether it is asserted in conjunction with California's popular limitations-period enhancer, Business & Professions Code section 17200 ("Section 17200").

In Pineda v. Bank of America, N.A., 2010 Cal. Lexis 11678, Jorge Pineda gave his employer, Bank of America, two weeks advance notice of his resignation in May 2006. The bank paid Pineda all of his final wages, but not until four days after his last day of work, in violation of Section 203. A year and a half later, Pineda filed a class action lawsuit, in which he sought to represent all former bank employees who did not timely receive their final wages. In addition to the Section 203 claim, Pineda alleged an "unfair competition" claim under Section 17200, as is habitually done by plaintiffs to extend their wage-claim statute of limitations period from three years to four years.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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