Starting January 1, 2014, employers will have a much more difficult time convincing a Court to give them attorneys’ fees after winning a wage and hour lawsuit. Before the change in the law, when an employee sued the employer for not paying wages, other than for overtime and minimum wage, the employer could ask the Court to award it the cost of hiring an attorney to defend the case when the employee lost his or her wage claim. Now, even when an employer successfully defends an employee’s claim for unpaid wages, the employer can only win its attorneys’ fees if the employee brought the lawsuit in bad faith. Bad faith is a hard standard to prove.

The law protects suing employees even more than before. As indicated, an employee never faced the penalty of needing to pay for an employer’s attorneys’ fees when the employee claimed that the employer failed to pay overtime wages or minimum wage. However, when an employee claimed that the employer failed to pay regular straight time wages that met the minimum wage standards, an employer had a right to recover its attorneys’ fees if the employee failed to win. Now, the employer only has that right when the employee brought the claim in bad faith. Further, the new rule applies to “any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions”. . . so virtually any claim made for compensation earned by the employee requires the employer to prove bad faith before it can recover the money it paid to its attorneys when it wins a wage lawsuit.

Employers continue to carry the cost burden of litigation. The new law amends Labor Code §218.5 and places even more of the litigation cost burden on employers. The California courts and legislature have supported that policy for many years and continue to do so.

S. Ward Heinrichs, Esq.
Employment Law Office of Ward Heinrichs
4565 Ruffner Street, Suite 207
San Diego, CA 92111
858-292-0792
(858) 408-7543 (fax)