The default statute of limitations for an action to recover a statutory penalty is one year, unless the statute provides otherwise. Code of Civil Procedure § 340 ("Within one year: (a) An action upon a statute for a penalty or forfeiture, if the action is given to an individual, or to an individual and the state, except if the statute imposing it prescribes a different limitation.") Labor Code § 203, the statute for recovering waiting time penalties for failure of an employer to promptly pay an employee's final wages specifies a longer period:
“If an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days. . . . [¶] Suit may be filed for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise.”
So it's pretty clear that an employee suing for waiting time penalties after, say, two years, shouldn't have to worry about those pesky statutes of limitations, right? As Lee Corso would say, "Not so fast, my friend."
In McCoy v. Superior Court (Kimco Staffing Services, Inc.) (2007) __ Cal.App.4th __, Derrick McCoy filed a class action complaint arising from Kimco Staffing's alleged practices of making employees wait for their final paycheck until the next regular payday. The defendant sought to strike parts of the complaint, saying that employees who had only a waiting time penalty claim, and who left Kimco Staffing's employment more than a year before the complaint was filed, should have their claims barred. Orange County Superior Court Judge Stephen Sundvold agreed, and struck portions of the complaint seeking waiting time penalties for late payment of wages. The plaintiff filed a writ petition, claiming that, pursuant to Labor Code § 203, even when an action seeks waiting time penalties only, the statute of limitations should be the same as that which would apply to a claim for wages. That measure, he argued, was four years (applying the four-year statute for unfair competition). The Court of Appeal disagreed, holding that
when a suit seeks for only waiting time penalties, the one-year statute under section 340(a) governs.
Why? Because Section 203 was enacted to give employees additional time to sue for waiting time penalties when they also bring an action for late wages. "Nothing in the statute otherwise negates the one-year period in section 340(a)."
Plaintiff contends the statute of limitations in section 203 applies to any action for penalties, regardless of whether there is also a claim “for the wages from which the penalties arise.” He points to Code of Civil Procedure § 312, which directs: “Civil actions, without exception, can only be commenced within the periods prescribed in this title [setting out the general statutes of limitations], after the cause of action shall have accrued, unless where, in special cases, a different limitation is prescribed by statute.” Plaintiff asserts that section 203 is “one of these ‘special cases’” that contains its own statute of limitations, thereby supplanting section 340. We agree with plaintiff to the extent the period set out in section 203 applies to actions for waiting time penalties sought in conjunction with back wages. But for suits seeking penalties alone, the objective of section 203, the legislative intent, and the common sense meaning of the section’s language persuade us defendant’s interpretation is correct.
The opinion is worded fairly strongly, and the court falls barely short of dismissing the plaintiff's arguments as silly. The court gave no weight to dicta in Murphy v. Kenneth Cole Productions, Inc., that appeared to support McCoy's view of Section 203:
In reaching its conclusion, the court referred to section 203, noting that the Legislature understood “it could, if it so desired, trigger a one-year statute of limitations by labeling a remedy a penalty.... Knowing that remedies constituting penalties are typically governed by a one-year statute of limitations, the Legislature expressly provided that a suit seeking to enforce the section 203 penalty would be subject to the same threeyear statute of limitations as an action to recover wages. [Citation.]” (Murphy v. Kenneth Cole Productions, Inc., supra, 40 Cal.4th at pp. 1108-1109.) Like the trial judge, we are not persuaded by plaintiff’s claim this dictates the one-year statute does not apply where an employees sues only for waiting time penalties.
Because of the holding limiting the claims to one year, the court did not address McCoy's claim that the "expiration of the statute of limitations on an action for the wages from which the penalties arise" is four years under the unfair competition theory. Handicapping this one, we would have found interesting the undecided issue of whether the measure is three years or four, but we wouldn't have given the employer much of a chance on the one-year issue.