TEMPORARY EMPLOYEE HIRED FOR ONE DAY IS "DISCHARGED" AT THE END OF THAT DAY AND IS ENTITLED TO IMMEDIATE PAYMENT OF HER WAGES

The California Supreme Court recently had occasion to interpret California's wage payment laws in the context of temporary employment. The Court held that a temporary employee who was hired for a one-day assignment was discharged at the end of the day and thus entitled to immediate payment of all of her wages earned that day.

The case, Smith v. Superior Court, 39 Cal.4th 77 (2006), involved a hair model who was hired for a one-day modeling assignment. The question presented by the case was whether she was ?discharged? within the meaning of Labor Code section 201 at the end of her assignment.

Labor Code section 201 says that "If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately. . . ." Labor Code section 203 imposes "waiting time" penalties when an employer "willfully" fails to comply with the provisions of section 201, or when an employer willfully fails to comply with the provisions of section 202, which requires the payment of wages within 72 hours to employees who quit. The penalties under section 203 are a day's wages for each day that the final pay remains unpaid, up to a maximum of 30 days. The term "willful" has been interpreted to mean "intentional."

In the Smith case, the Supreme Court held that for purposes of section 201 and 203, a "discharge" occurs not only when an employer involuntary terminates an ongoing employment relationship, but also when an employer releases an employee after completion of the specific job assignment or time duration for which the employee was hired. Under this interpretation of sections 201 and 203, the Court held that the hair model was "discharged" at the end of her one-day assignment, and she was therefore entitled to be paid her wages at the end of that day. Since she was not paid at the end of the day, her employer was subject to waiting time penalties under section 203 ($500 per day in her case).

As of January 1, 2007, the exceptions to the requirements of section 201 are limited. The exceptions apply to (1) seasonal employment in the curing, canning, or drying of perishable fruit, fish, or vegetables; (2) employees in the motion picture industry; (3) employees in the oil drilling business; and (4) certain employees who work at a venue that hosts live theatrical or concert events and who are covered by a collective bargaining agreement.

The Smith case serves as a reminder that failure to comply with California's wage payment rules can have serious consequences. Failure to pay all final wages when they are due can result in waiting time penalties that are greater than the wages owed. And except for those employers in one of the four industries to which special rules apply, the requirement that all accrued wages be paid at the time of discharge applies to all employees, even temporary employees, who are considered "discharged" when their assignment ends.