Paid out for Retirement

McLean v. State of California (2014), Cal.App.4th, No. C074515, decided on August 19, 2014, that a class action could proceed for waiting time penalties under Labor Code section 203 for the employer’s failure to pay retirees their final wages at the time they retired.  Pursuant to Labor Code section 202, employers have to pay an employee who quits his/her final wages within 72 hours unless 72 hours notice is given.  The court held that an employee who “quits” includes “all employees who quit, whether to retire or for a different reason, and these employees constitute a single group under the statutory scheme.”

Janis McLean was employed by the California Attorney General’s office as a deputy attorney general. Upon her retirement in November 2010, McLean claimed that the state had not compensated all wages due to her at the time of her retirement.

Initially, the State contended McLean’s complaint citing that the Labor Code accounted for those who “quit” versus “retired.” McLean countered, stating that both terms refer to a “voluntary separation from service.” The Court of Appeals upheld that the definition of the Labor Code “is to be liberally construed in favor of the employee.” Therefore, these rights extend to employees who quit or retire.