Can payroll company be sued for wage and hour violations?

Posted on March 31, 2017 | By Omid Nosrati | Firm News,Wage & Hour Laws

If a worker in the state of California thinks that he or she has not received all that is owed for work completed, the first party they likely think to go after is their employer. A joint employer may be another potential defendant. But could another party be liable as well? That is the question that the California Supreme Court recently indicated it will take up.

The Case

Specifically the high court will determine whether the payroll and human resources servicer ADP can be sued for the failure of a worker to receive what she claimed she earned. The worker in this case initially sued her employer for:

• Failing to pay overtime
• Not letting her take rest or meal breaks
• Discrimination due to her nationality and ethnicity

Several years after filing the initial complaint, the plaintiff added ADP as a defendant alleging the business violated California’s Unfair Competition Law. She claimed that it was the discrepancies in ADP’s records, compared to her own, that prompted her to sue her employer in the first place. She later sought to amend the complaint to add claims. A Superior Court judge dismissed all of the plaintiff’s claims and she appealed.

A Valid Cause Of Action?

The Court of Appeal determined that one of the amendments the plaintiff proposed was a valid cause of action. That proposed amendment alleged that ADP was inaccurate and negligent in the way in which it handled her employer’s payroll. Specifically she claimed that ADP did not:

• Accurately break down the type of pay on a statement
• Provide information regarding rest or meal breaks on a statement
• Compensate her appropriately when her timecard indicated she should receive double time compensation

The decision is noteworthy because should the plaintiff succeed in proving her case she might recover damages on multiple fronts. In addition to a negligence theory, she could also prevail for breach of contract predicated on a third party beneficiary theory, as well as breach of the duty of care ADP owed her as a creditor beneficiary.

Not getting paid what you are owed is unfair and against the law. If you believe your employer has failed to pay you for all of your work, you owe it to yourself to explore your legal options. An employment lawyer who has a thorough understanding of California’s wage and hour laws is a good place to start.