Intentional Pay Deprivation Is a Possible Felony

California has long regarded intentional employer failure to pay wages and tips as a misdemeanor, with civil penalties and remedies for their recovery.  Labor Code sections 215 and 216.  Effective January 1, 2022, prosecutors will have the discretion to bring felony charges for such violations under certain conditions. Penal Code section 487m.

“Theft of wages” is the intentional deprivation of wages, benefits, tips or other workplace compensation the employer knows is due the employee under the law.  Section 487m expands “employee” to include an independent contractor and “employer” to include the contractor’s hiring entity.

Such deprivation becomes grand theft for amounts greater than $950 from any one employee or independent contractor or $2,350 from two or more employees/contractors in any consecutive 12-month period. Grand theft can be a misdemeanor with county jail imprisonment for up to one year or a felony with 16 months in the county jail or state incarceration for two or three years.

Section 487m permits additional penalties of up to $10,000 and worker wage recovery through the “restitution” provisions of the Penal Code (sections 1202.4 and 1203.1).

The greater labor law’s potential bite, the greater business’s required vigilance to ensure full understanding and compliance with applicable workplace provisions.

For more information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• California Summer Minimum Wage Rate Increases (June 10, 2021)
• Minimus Maximus – A Brief History of Minimum Wage (April 2, 2021)
• California Wage Theft Protection Act (2012)

Tim Bowles
October 15, 2021