by Mark I. Schickman

This case is simple—straightforward and potentially contradictory language in two dueling statutes related to the date wage payment is due, allowing an employer to meet the letter if not the spirit of the code. Spoiler alert: the text will prevail.

Facts

Robert Parsons works for Estenson Logistics, LLC, which pays its employees weekly. Its pay period runs from Sunday through the following Saturday. It pays its employees on the second Monday after the end of the pay period, which is nine calendar days after the end of the pay period. If Monday is a holiday, it pays its employees on Tuesday, which is 10 calendar days after the end of the pay period. So, for example, if the pay period runs from Sunday, January 1, through Saturday, January 7, it would pay its employees on Monday, January 16, and if Monday, January 16 was a holiday, it would pay its employees on Tuesday, January 17.

Parsons filed a lawsuit and argued this practice violated Labor Code Section 204(d), which quite clearly requires that employees who are paid weekly be paid “not more than seven calendar days following the close of the payroll period.” Code of Civil Procedure section 12a provides, however, that “If the last day for the performance of any act provided or required by law to be performed within a specified period of time is a [weekend or] holiday, then that period is hereby extended to and including the next day that is not a holiday.”

Estenson argued that because the last day to pay its employees always falls on a Saturday, it had the option of paying them on Monday (or on Tuesday if Monday is a holiday). The trial court agreed and dismissed the suit. Parsons appealed.

Weekend Legal Obligation Extended to Next Non-Holiday

After analyzing, considering, and comparing both labor code section 204 (d) and civil procedure section 12a, the appeals court agreed the extension provided under the code of civil procedure applied to the payment of wages. The obligation under section 204 to pay wages “not more than seven calendar days following the close of the payroll period” is certainly an obligation “required by law to be performed within a specified period of time” and therefore covered by the section 12 extension.

Although Parsons argued the liberal policy behind California employment law should require a different result, the language of the two well-establish statutes couldn’t be ignored. The appeals court affirmed the trial court’s ruling and dismissed the case. Robert Parsons v. Estenson Logistics, LLC, C093489 (California Court of Appeal, 3rd Appellate District, 12/28/22).

Bottom Line

Despite the employer prevailing in this case, we don’t recommend you implement a practice calculated to circumvent the seven-day payment rule. Interestingly, the court in this case noted that after the complaint was filed, Estenson changed its payroll practices to pay employees on Fridays, or six calendar days after the close of the payroll period. Try not to delay legal compliance matters until the last day, but keep in mind that, for the most part, the time to perform an obligation due on a weekend or holiday generally extends to the next day.

Mark I. Schickman is Editor of the California Employment Law Letter and the founder of Schickman Law in Berkeley, California. Mark has successfully litigated almost every type of employment case in the courts before juries and administrative agencies and on appeal and is a popular and engaging trainer providing employment advice to employers across the country. He can be reached at Mark@SchickmanLaw.com.