Employer underpays departing employee $300, gets stuck with $30,000 for employee’s legal fees

by Timothy M. Kowal, Esq.

Is an employee leaving? Pay up. Pay in full. There is no "A for effort." Pay it all.

In last month's Court of Appeal opinion in Beck v. Stratton, employee leaves and employer asks his reputable payroll company, ADP, to cash him out. For reasons that "no one at trial court explain," ADP issued a check for $303.55 less than the total $1,075 the employee was entitled to. Employee filed with the Labor Commissioner, who awarded $6,060 against the employer.

The employer should have cut his losses there, but he decided to go for the gusto and appeal, and lost again. To the employer's surprise, however, the superior court case he believed to have been a limited civil action turned out to have been an unlimited civil action. That meant the prevailing employee was entitled to his fees, adding $31,365 to the penalty - over 100 times more than the original underpaid amount.