Owners and Employees of a Business May Be Held Personally Liable for Violations of the California Labor Code

California Labor Code Section 558.1 may impose liability on an owner for violations of specific labor provisions related to minimum wages, hours, and days of work as specified in the Industrial Welfare Commission’s orders. This liability applies to any employer or other person acting on behalf of an employer, including natural persons who are owners, directors, officers, or managing agents of the employer.

The specific degree of involvement required for an owner, director, officer, or managing agent of the employer to be held liable under California Labor Code Section 558.1 isn’t explicitly defined in the statute itself and has instead been interpreted by courts through case law. These cases suggest that an owner, director, officer, or managing agent of the employer must either be personally involved in the alleged violations or, if not personally involved, must have significant participation in the employer’s activities, such as determining or participating in the determination of the action which violated California labor laws, or overseeing those responsible for implementing the activities which allegedly violate the wage and hour regulations.

It’s important to note that the specific facts of each case are examined to determine liability under California Labor Code Section 558.1. However, the extent of liability for owners, directors, officers, or a managing agent of the employer under California Labor Code Section 558.1 may vary depending on the specific circumstances of the case. Furthermore, California courts have interpreted the word “may” in California Labor Code Section 558.1 as granting discretion in deciding whether to impose such liability. This suggests that the decision to impose liability isn’t necessarily automatic, but depends on the discretion of the trier of fact.

Additionally, the labor code clarifies that nothing in California Labor Code Section 558.1 should be construed to limit the definition of an employer under existing law. This may imply that the determination of liability under this section might also take into consideration established legal principles defining an employer.

In summary, an owner, director, officer, or managing agent of an employer may be held liable under California Labor Code Section 558.1 for violations of certain labor provisions if they have a significant degree of involvement in the alleged violations. However, the decision to impose such liability is subject to discretion and depends on the specific facts of each case.