In Atempa v. Pedrazzani, the Court held that civil penalties may be assessed for violation of specified overtime pay and minimum wage laws from a person other than the corporate employer that failed to pay the proper wages, where there is no allegation or contention that the alter ego doctrine applies or that there is any other basis on which to pierce the veil of the corporate employer. Labor Code section 558(a), provides that an employer “or other person acting on behalf of an employer” who violates or causes a violation of the state’s applicable overtime laws shall be subject to a civil penalty. Similarly, section 1197.1(a) provides that an employer “or other person acting either individually or as an officer, agent, or employee of another person” who pays or causes to pay an employee less than the state’s applicable minimum wage shall be subject to a civil penalty. Following a trial, the superior court issued civil penalties against an individual defendant — namely, the corporate employer’s owner, president, secretary, and director — as the “other person” who caused violations of these two statutes. On appeal the issue was whether, as a matter of substantive law, any individual other than the corporate employer can ever be found liable for the civil penalties associated with statutory violations in the payment of wages to a corporate employee where, as here, there is no allegation or finding that the corporate laws have been misused or abused for a wrongful or inequitable purpose. More specifically, the Court had to determine whether section 558(a) and 1197.1(a) authorize recovery of the civil penalties for violation of specified overtime pay and minimum wage laws from a person other than the corporate employer that failed to pay the proper wages, where there is no allegation or contention that the alter ego doctrine applies or that there is any other basis on which to pierce the veil of the corporate employer. The Court held that  the Labor and Workforce Development Agency (LWDA), which includes the Labor Commissioner, is statutorily authorized to recover the Labor Code’s civil penalties at issue in this appeal from the individual officer/agent of the corporate employer. Moreover, the Labor Code Private Attorneys General Act of 2004 (PAGA) authorizes an aggrieved employee to recover these civil penalties in lieu of the LWDA.

 As such, employees can not only pursue the corporate employer, but the individual owners and potentially others. This is very good for employees.

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