Final Pay and Penalties

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lorilee143

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I am a small insurance agent. I hired a girl who did not have an insurance license, but was willing to get it. She did not have the funds ($550) to take classes, pay for licensing or fingerprinting, so I advanced the money on the condition that she has to pay me back if she left me before one year. This was not in writing (my bad). Well, she quit after 3 months and when I deducted $275 as a "return of advance" from her pay, she took me to the labor board. I paid her the $275 prior to our hearing, because I was told that I could take her to small claims court (she also put in a letter to the labor board that she had been told that she would have to pay the money back, but because it wasn't in writing, she didn't feel she had to pay me back).

At our hearing she told the Labor Commissioner that she wants another hearing to see if she can get up to $1400+ in penalties! Doesn't Labor Code 203 say I can avoid penalties because I made a "good faith" effort to pay her??
 
lorilee143 said:
I am a small insurance agent. I hired a girl who did not have an insurance license, but was willing to get it. She did not have the funds ($550) to take classes, pay for licensing or fingerprinting, so I advanced the money on the condition that she has to pay me back if she left me before one year. This was not in writing (my bad). Well, she quit after 3 months and when I deducted $275 as a "return of advance" from her pay, she took me to the labor board. I paid her the $275 prior to our hearing, because I was told that I could take her to small claims court (she also put in a letter to the labor board that she had been told that she would have to pay the money back, but because it wasn't in writing, she didn't feel she had to pay me back).

At our hearing she told the Labor Commissioner that she wants another hearing to see if she can get up to $1400+ in penalties! Doesn't Labor Code 203 say I can avoid penalties because I made a "good faith" effort to pay her??
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Give us a teeny-tiny hint: What state are you in?
 
Explain how and why you made a good faith effort to pay. I missed that in your post.
 
I paid her her wages of $408, less taxes and less $275 for return of money advanced. Her net check was $62.94 which she did not cash. My payroll company inadvertantly did a direct deposit of $62.94 (their error), but my employee (former) went to the bank and sent it back! So I made every effort to pay her, but since it was not the amount she felt she was owed, she took me to the California Labor Commissioner.

The labor commissioner said that since I did not have anything in writing, I was not allowed to deduct anything from her paycheck, however I could sue her for the $550 in small claims court.

Now she wants a hearing to try to get up to $1400+ in penalties.
 
Where does she want this hearing?

(Could you please start from the first and give us a complete and total chronological account of what happened? Getting this stuff piecemeal is wearing me out!)
 
Okay:
I hire SD as my admin assistant on the condition that she gets her insurance license. She doesn't have the money for the classes, licensing, etc., I advance all of the money ($550) on the condition that if she quits prior to one year she will have to pay me back. She completes the courses/tests, etc and get her insurance license.

She quits 3 months later, and I deducted $275- half of the amount owed- from her final paycheck, which only nets her $62.94 (she doesn't cash the paycheck and also sends back an accidental direct deposit of $62.94...so she has received a total of $125.88-but doesn't accept any of this money).

she takes me to the California Labor Commissioner who tells me that I need to give her back the $275, since there is nothing in writing authorizing me to deduct the amount she owes me, from her paycheck.:(

while at the California Labor Commission hearing, she is told that she could potentialy receive an additional $1400+ in penalties from me if she wants another hearing (for penalties)which will be scheduled in about 6-7 months.

California Labor code 203: If an employer willfully fails to pay, without abatement or reduction...any wages of an employee who...quits, the wages of the employee will continue as a penalty at the daily rate of pay...for not more than 30 days...Penalties...may be avoided if the employer can show that a good-faith dispute existed concerning whether any wages were due. A "good-faith" dispute means that the employer's defense, based on law or fact...would preclude any recovery on the part of the employee
Also: An employee who secretes or absents herself to avoid payment to her, or refuses to receive payment when fully tendered to her, including any penalty then accrued, is not entitled to any benefit under this section for the time she avoids payment.

My question: do you think that I will have to pay up to $1400 in penalties?? It appears to me that I made every effort to pay her (even though she owed me the money, and she admits that she was aware of our agreement to return the money advanced for her licensing, but since it was never in writing she believes she is absolved of any and all financial responsibility to me).
 
Sounds like you did everything right to me.

But I am not making the decision.

And I cannot tell you what will happen in the future.
 
One more thing: If she wins penalties at the Labor Commission, can I take her to small claims court to try to recover it?
 
Q: One more thing: If she wins penalties at the Labor Commission, can I take her to small claims court to try to recover it?

A: You would appeal it.
 
why is it that there is a California Labor Commission to protect the employee but there is not some sort of unbiased forum to also protect the employer??? That is frustrating!
 
The board is a neutral party and does not represent either side.
 
This is not legal advice!

"She takes me to the California Labor Commissioner who tells me that I need to give her back the $275, since there is nothing in writing authorizing me to deduct the amount she owes me, from her paycheck"
The underlining fundementle issue is in here, you must remember to back up an agreement with a contract. You then would have held a full deck.

Personally I would refund and swallow the bad pill and just be thankfull you got burnt for a small amount.


Good Luck

Mark.
 
Kind of good riddance to bad trash.:angel
 
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