Attorney's Fees for Wage and Hour California Cases: Who Pays?

A new law regarding attorney's fees for wage and hour California cases will only affect employers. An employer will generally have to pay for attorneys, not just their own, but also the plaintiff's attorneys, when losing a wage-hour lawsuit because of unpaid overtime, unpaid wages for hours worked, not giving lawful meal and rest periods, not paying at least minimum wage (even to illegal aliens and non-citizens) and more. In the past, now and only until January 2014, when the new law takes affect, employers who won wage-hour lawsuits were able to recover fees paid for attorney(s) that represented them.

Governor Brown signed the new law SB-462 Employment: compensation, amending California Labor Code §218.5. The new employment law states that if the party seeking action is not an employee, ""attorney’s fees and costs shall be awarded ...only if the court finds that the employee brought the court action in bad faith." In lay terms, or terms non-lawyers understand, what "employee brought the court action in bad faith" means is that an employee filed a lawsuit against the employer and was acting maliciously and deceitfully by intending to hurt the employer. Proving that an employee bought a wage and hour lawsuit against an employer in bad faith is extremely difficult to prove by attorneys. The employer's lawyers would essentially have to prove that the employee was attempting to sue the employer not to recover unpaid wages but rather because the employee wanted to hurt the employer.

When an employee sues for unpaid wages and wins, the employer must pay for the employee's fees. This will not change. It is postulated that when an employee loses the lawsuit, that is, the employer wins the wage and hour case brought against him, the employer will not be able to recover his attorney's fees when the new law takes affect.

 

Employees Don't Pay Out of Pocket for Wage and Hour California Lawsuits

California Employment law has not changed in regard to the fees that employees pay for their lawyers, which are generally paid on contingency. Employment attorneys representing employees don't usually charge for representation, but rather they charge a fee based on the amount recovered from a settlement won. This type of fee arrangement is a win-win for both the employee and the attorneys, as the employee pays no attorneys' fees and it motivates the lawyers to get the highest settlement possible and also get the settlement paid out as quick as possible.

Opponents of the new law argue that it will increase the number of frivolous lawsuits regarding wage and hour matters. However, other employment attorneys have a different opinion; lawyers don't file wage-hour lawsuits and waste their time if they know there are no grounds for the case and they don't believe they can win. After all, attorneys representing employees are not paid hourly, they are paid by contingency which means the California lawyers will only be paid if they win the employment case.