California Labor Code § 201.3, the statute which governs the payment of wages to temporary service employees, was amended by Assembly Bill 1311 on July 22, 2016 to offer PPOs a bit of leeway in defining workweeks and paydays.
California Labor Code § 201.3 was enacted in 2008 and it provides that all temporary employees, those with assignments of less than 90 days, must be paid on a weekly basis. This statute applies and has always applied to security officers. This means that if a Private Patrol Operator’s (PPO’s) security officers are working the State Fair, a convention, festival or other event where the work assignment is scheduled to last 90 days or less, that guard is a “temporary employee” and must be paid every week.
If employment is deemed temporary, the employee’s wages are due and payable no less frequently than weekly and wages for work performed during any calendar week (Sunday through Saturday) shall be due and payable by the regular payday of the following calendar week. This would require paydays to take place on Saturdays. The problem is, requiring an employer to pay wages only on Saturdays does not make sense, does not benefit employees, and is unnecessarily burdensome to employees and employers. Requiring companies to process and distribute payroll on weekends, instead of weekdays, results in administrative employees working on weekends to process payroll instead of the normal Monday through Friday business work schedule. This takes employees away from their families on weekends and unnecessarily disrupts family schedules.
AB 1311 Amendment to Labor Code § 201.3
In 2014 , when applying Labor Code § 201.3 to a case involving security guards, some confusion arose when the trial court applied a Sunday to Saturday workweek (calendar workweek) to the employment of guards whose workweek was Friday to Thursday. Going forward, CALSAGA wanted to ensure that PPOs were not adversely affected by 201.3, simply because they use non- calendar workweeks, and thus helped sponsor Assembly Bill 1311. The bill went into effect on July 22, 2016, so the relief to PPOs is immediate. AB 1311 clarifies that an employer can define its own workweek and pay days for both temporary and permanent workers, as long as the temporary employee is paid the week following the completion of work.
Labor Code § 201.3 Requires Weekly Payment to Temporary Security Officers
The amendment changes Labor Code § 201.3 only slightly. AB 1311 simply carved out new language specific to security officers which states that when temporary employment ends, the guard’s wages “shall be due and payable no later than the regular payday of the following workweek.” It also clarifies that the employer can define its own defined workweek according to California Labor Code §500. This is a logical rule that benefits employees and is not unnecessarily or overly burdensome to employers.
What is a Temporary Employee?
If a security officer is assigned to work for a client at a post for over 90 consecutive calendar days, 201.3 does not apply (unless, of course, the employer opted to pay the long term employees on a weekly basis, too). So for a typical contract security officer assigned to work at the same location on a long-term contract, say at an office building or other complex, they would not be deemed “temporary.”
A temporary employee is one assigned to a client for 90 days or less. (Keep in mind that if an assignment is day-to-day, then the employee must be paid at the end of each day. These are rare in the security industry, but you should be aware of the nuance.)
Labor Code § 201.3 does not affect all Security Officers, but only those with assignments of less than 90 days. If an assignment exceeds 90 days, the employer remains free to pay the security officer every two (2) weeks, if desired.
Application of Labor Code § 201.3
Recommendation: Make sure your temporary employees are paid within seven (7) days following the end of your defined workweek. Thus, if for example your company’s workweek is defined from Friday (12:00 a.m.) to Thursday (11:59 p.m.), then the regular pay day must be scheduled on or by the following Thursday, so that the employee never has to wait more than seven (7) calendar days for payment of any work performed.
In the example above, if the PPO’s workweek is from Friday to Thursday, then it cannot schedule the regular pay day for Friday of the next week, because that means the employee would have to wait eight (8) days (from Thursday to the following Friday) for payment. By law, the temporary employee can only be forced to wait seven (7) days. Schedule your paydays for no more than seven (7) days after the workweek ends for temporary employees.
Early End of Temporary Assignment: AB 1311 also clarifies that the employer does not have to change its pay day, just because the assignment came to its natural end before the workweek was over. For instance, if the PPO defined workweek is Friday to Thursday and an assignment was scheduled to last 60 days, even if that 60th day (the last work day for the assignment) falls on a Wednesday, the employees may still be paid on the regular Thursday pay day the following week. You are not required to change your defined workweek. Labor Code § 201.3 simply requires that, when an assignment ends, the temporary security officer must be paid on the regular payday of the following workweek. This means, if the employer has defined its workweek to run from Friday to Thursday (rather than a calendar week of Sunday to Saturday) it can maintain that workweek. The employer must simply pay the temporary employee on the regular payday of the following week.
For example, if the workweek is from Friday to Thursday and payday is every Monday, when a temporary employment position ends on Thursday, August 4, 2016, then payment must be paid on Monday, August 8, 2016 (because Monday is the employer’s regular payday and August 8, 2016 falls within the workweek, following the end of the assignment).
Terminated Employees: Please note that if the temporary employee is fired, he/she must still be paid at the time of termination and if the employee quits, that employee must be paid within 72 hours, pursuant to Labor Code § 201. Payment on the regular payday of the following week only applies if the assignment comes to a natural end and does not involve the employee quitting or being fired.
Violations: PPOs should know that violation of Labor Code § 201.3’s provisions is punishable as a misdemeanor, in addition to the usual “waiting time” penalties under Labor Code § 203 (continued payment of wages for up to 30 days). In addition, violation exposes the employer to wage and hour claims, including class action and Private Attorneys General Act (PAGA) lawsuits which can wipe out your business.
If you believe your employees fall under the definition of “temporary employees,” then please ensure you pay them on a weekly basis in accordance with Labor Code § 201.3. As the old adage goes, “An ounce of prevention is worth a pound of cure.” Should you have any questions about the scope or application of the AB 1311 revision to Labor Code § 201.3, please do not hesitate to contact Michele L. Jackson, Esq. at Bradley & Gmelich LLP.
Written and Compiled by Michele L. Jackson, Esq. and Barry A. Bradley, Esq. Bradley & Gmelich LLP