In a recent opinion[1], the California Court of Appeal for the Fourth Appellate District affirmed summary judgment in favor of an individual owner of a company who was personally sued for alleged wage and hour violations under Labor Code §558.1.

Labor Code §558.1 provides that a natural person who is an owner, director, officer, or managing agent of an employer may be personally liable if that person, on behalf of the employer, “violates, or causes to be violated” certain wage and hour laws.

In the Usher opinion, the trial court granted summary judgment for the owner, concluding as a matter of law that she was not liable under Labor Code §558.1 because the court found undisputed evidence that she did not participate in the determination to classify plaintiffs as independent contractors.

The Court of Appeal affirmed and held: “The undisputed evidence in this case shows that the owner was not personally involved in the determination to classify plaintiffs as independent contractors, which purported misclassification forms the basis of their class and subclass allegations and their 10 causes of action; and that she also lacked sufficient participation in the operation and management of the company to create a triable issue of material fact that she caused the wage and hour violations.”

Whether an individual such as an owner, director, officer, or managing agent of an employer is personally liable for misclassifying an employee remains a highly fact-intensive inquiry. Employers, however, should be aware of this basis for personal liability for violations of Wage & Hour laws.

[1] Usher v. White (2021) Cal.App.4th, WL 2173167