CA Retirees Entitled to Prompt-Pay Protection

     (CN) — The California Supreme Court ruled that a retired deputy attorney general is owed prompt payment of her final wages, rejecting the state’s argument that prompt-pay laws only apply when employees quit or are fired.
     Janis S. McLean brought her class action wage dispute against the State of California shortly after she retired from the Department of Justice in November 2010, claiming she was not paid her final wages within 72 hours of her last day worked.
     McLean asserts that, from November 2010 through March 2011, the state has systematically neglected to fully and promptly pay her and other state employees who have retired or resigned from their positions.
     She also says her unused vacation and leave wages were not deposited in her supplemental retirement plan within 45 days and the wages she chose to defer to the 2011 tax year were not transferred in the required time period.
     The California Labor Code prompt payment provision requires employers to pay an employee their final wages within 72 hours after their last day worked.
     In considering McLean’s case, the California Supreme Court on Thursday rejected the state’s argument that quitting and retiring are not the same thing under the prompt payment rule.
     “The word ‘quit’ is broad enough to encompass a voluntary departure from a particular employment, whatever its motivation: an employee who retires, no less than an employee who ends one job and starts another, has stopped, ceased, or left her employment,” Justice Leondra Kruger wrote for the high court.
     A worker’s post-employment plans are not relevant to the prompt payment provisions of the labor code because an employee might not even know what their future plans are when they quit or retire, Kruger said.
     “California has long regarded the timely payment of employee wage claims as indispensable to the public welfare: It has long been recognized that wages are not ordinary debts, that they may be preferred over other claims, and that, because of the economic position of the average worker and, in particular, his dependence on wages for the necessities of life for himself and his family, it is essential to the public welfare that he receive his pay when it is due,” the judge said.
     Although retirees often have an immediate source of income, it is usually significantly lower than the income they were bringing in while they were working, the state high court noted.
     The state’s other squabble — its claim that McLean was suing the wrong employer since she worked for the Department of Justice rather than the State of California as a whole — was also shot down by the California Supreme Court.
     Conceding that the state made valid points that the Department of Justice hired McLean and set the terms of her employment, the court made it clear that California is also responsible for making timely payments of final wages because it governs the common payroll system through the controller’s office.
     “As particularly relevant here, the State Controller’s Office is charged by statute with operating a ‘uniform state payroll system’ for state employees, which it administers based on information supplied to it by individual departments and agencies,” Kruger wrote.
     Kruger also noted that the seven-judge panel declined to express their view on class certification issues because McLean will need to get information from the controller’s office and other relevant departments to show that the state systematically failed to pay final wages over the alleged five month period.
     McLean is represented by William A. Kershaw of Kershaw, Cook & Talley in Sacramento, Calif.
     William T. Darden with the state attorney general’s office and Aimee Athena Feinberg of the California Department of Justice represent the state.
     State attorney general’s office spokeswoman Brenda Gonzalez declined to comment on the ruling.
     Kershaw did not respond to a request for comment Friday.

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