The ripple effects of the COVID-19 pandemic continue to shape our legal landscape. A recent ruling in California might have a significant impact on how employers manage furloughs.
By: Muhammed T. Hussain
Key Takeaways from Hartstein v. Hyatt Corp.
The Situation: Employees were furloughed in March 2020 and terminated in June 2020. They argued that Hyatt should have paid them immediately for their pay and accrued benefits during the furlough.
The Ruling: The court found that Labor Code Section 201(a) requires employers to pay employees immediately for all wages earned and unpaid at the time of discharge. The court also cited a California Division of Labor Standards Enforcement (DLSE) opinion letter stating that “if an employee is laid off without a specific return date within the normal pay period, the wages earned to and including the layoff date are due and payable in accordance with Section 201.”
Why it Matters: Employers, be warned! If you’ve been deferring payments during furloughs, you could face legal repercussions. This likely applies to any unpaid leave pending workplace investigations as well.
What this means for you
Review Your Furlough and/or Unpaid Leave Practices: Ensure you’re compliant with Labor Code Section 201.
Stay Informed: This case underscores the importance of keeping abreast of legal nuances during unprecedented times.
Seek Expert Advice: If unsure, consult a legal expert.
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