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September 8, 2020

Western Growers Files Amicus Brief in Timing of Final Wages Case

Western Growers and industry allies have filed an amicus curiae (friend of the court) brief with the California Court of Appeal for the Fourth Appellate District.

In Jaime Zepeda Labor Contracting, Inc., et al. v. Division of Labor Standards Enforcement, the Court of Appeal will rule on two issues very important to the agricultural industry:  

  1. Whether workers of a farm labor contractor are “discharged” after completing a task or assignment for a particular grower, and so must be paid their final wages immediately (rather than on their regular weekly payday), even though the worker is never terminated by either the farm labor contractor or the grower; and
  2. Whether the failure to pay these immediate final wages, at the end of a grower-specific task or assignment (instead of in the weekly payroll) is, by itself, a minimum wage violation, which allows the Department of Labor Standards Enforcement (DLSE) to issue an administrative citation for the amount of final wages and penalties of up to 30 days’ pay, without ever receiving a complaint from a worker, and without filing any action in court.

Jaime Zepeda Labor Contracting, Inc. (JZLC) is a farm labor contractor who provided workers to several growers in the Coachella Valley, for purposes of performing labor services during the table grape growing season.  JZLC paid its workers in full, each week on pay day, in accordance with California law.  Although no workers complained to the DLSE about their wages, the DLSE field office began an audit of JZLC’s payment practices and decided its workers were “discharged” after completing specific tasks or assignments at a given grower, even though the workers moved on to perform work at a different grower and were not actually terminated by either JZLC or any grower.  In other words, the DLSE decided that the workers were “discharged” even though they continued to have an ongoing working relationship (and ongoing work) with JZLC. 

Under California law, an employer is required to pay employees their final wages “immediately” on “discharge,” or else face stiff “waiting time penalties” (their rate of pay for up 30 days).  Because the DLSE determined JZLC’s workers were “discharged” after specific assignments, and were not immediately paid their final wages, it used its citation powers to issue administrative citations to JZLC for failing to pay minimum wages and final pay penalties in the amount of nearly $350,000, even though all its workers were paid in full every week.  After posting a bond in the cited amount, JZLC asked the Superior Court review the citation. 

The Superior Court agreed with the DLSE that JZLC’s workers were “discharged” after completing a grower-specific task or assignment; but it found that the DLSE lacked authority to issue a citation for waiting time penalties because the workers were actually paid all wages they were owed as part of their weekly payroll.  Both the DLSE and JZLC have appealed the Superior Court’s ruling, and the issue is now before the Court of Appeal, where new law will be created no matter how the ruling comes down.

California Farm Bureau Federation, California Fresh Fruit Association, California Farm Labor Contractors Association, Grower-Shipper Association of Santa Barbara and San Luis Obispo Counties, and Ventura County Agricultural Association joined Western Growers to submit the brief on behalf of industry that was drafted by Babak Yousefzadeh and Brian Fong with the law firm of Sheppard Mullin. 

For more information, read the amicus brief.