More New Laws For 2009: Final Pay Requirements for Temporary Employees

Amanza Smith was working as a salesperson in a Beverly Hills boutique when a representative of L’Oreal approached her and asked if she would like to be a “hair model” at an upcoming show featuring L’Oreal products and a hair stylist. After she attended a modeling call, L'Oreal agreed to pay her $500 for one day’s work at the show. Ms. Smith worked at the show, where her hair was colored and styled, and she then walked a runway a few times. Ms. Smith stayed at the show until she was told she could leave. L'Oreal did not immediately pay her the $ 500 in wages it owed her, but waited over two months to do so.

Ms. Smith filed a class action law suit against L'Oreal, alleging that she worked for one day, that her employment was terminated at the end of the day, that L'Oreal violated its obligation to pay earned wages promptly upon separation, and that it should pay her and all similarly situated temporary employees "waiting time" penalties under Labor Code Section 203.

In Smith v. L'Oreal USA, Inc. (2006) 39 Cal. 4th 77, the California Supreme Court agreed. The Court held that the discharge element of Section 201 can be satisfied either when an employee is involuntarily terminated from an ongoing employment relationship or when an employee is released after completing the specific job assignment or time duration for which the employee was hired. An employee who works on a job assignment of short duration is not excluded from the protective scope of Sections 201 and 203.

Effective January 1, 2009, Labor Code Section 201.3 provides, with certain exceptions:

if an employee of a temporary services employer is assigned to work for a client, that employee's wages are due and payable no less frequently than weekly, regardless of when the assignment ends, and wages for work performed during any calendar week shall be due and payable not later than the regular payday of the following calendar week. A temporary services employer shall be deemed to have timely paid wages upon completion of an assignment if wages are paid in compliance with this subdivision.