Biggs v. Wilson

Decision Date12 August 1993
Docket Number92-15936,Nos. 92-15334,s. 92-15334
Citation1 F.3d 1537
Parties, 1 Wage & Hour Cas. 2d 897 William BIGGS, et al., Plaintiffs-Appellants-Cross-Appellees, v. Pete WILSON, Governor; Kathleen Brown, Treasurer; Gray Davis, Controller, et al., Defendants-Appellees-Cross-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

Joe R. McCray and Roberta D. Perkins, Joe R. McCray, a Law Corp., San Francisco, CA for plaintiffs-appellants-cross-appellees.

Christopher W. Waddell, Chief Counsel, Dept. of Personnel Admin., Sacramento, CA, and Cathy A. Neff, Deputy Att. Gen., Sacramento CA, for defendants-appellees-cross-appellants.

Gary M. Messing and Cathleen Williams, Carroll, Burdick & McDonough, Sacramento, CA, for amicus curiae California Correctional Peace Officers Ass'n, et al.

Craig Becker, U.C.L.A. Law School, Los Angeles, CA, for amicus curiae Service Employees Intern. Union, AFL-CIO.

Appeal from the United States District Court for the Eastern District of California.

Before: REINHARDT, TROTT, and RYMER, Circuit Judges.

RYMER, Circuit Judge:

This appeal requires us to decide whether California violated the minimum wage provisions of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. Secs. 201-19, by paying wages 14-15 days late because there was no state budget, and thus no funds appropriated for the payment of salaries, on payday. The district court granted a summary judgment declaring that the failure to issue paychecks promptly when due violated the FLSA. We agree, and hold that under the FLSA wages are "unpaid" unless they are paid on the employees' regular payday.

I

Payday in this case--July 16, 1990 1--came and went without highway maintenance workers employed by the State of California Department of Transportation being issued their pay checks. California was undergoing one of its perennial rites, the budget impasse. In 1990, State law prohibited the release of paychecks until a budget was approved by the Legislature and signed by the Governor. That didn't happen until July 28, when the budget passed the Legislature, and July 31, when then-Governor Deukmejian signed it into law. The payroll was met on July 30 and 31, 14-15 days late.

William Biggs represents a class of highway maintenance workers who brought suit against the Governor, Treasurer, Controller, and Transportation Director (collectively "state officials"). The class seeks injunctive and declaratory relief, liquidated damages, and prejudgment interest on account of the delay in receiving wages.

Both sides moved for summary judgment. The district court filed a memorandum and order on October 3, 1991 in which it denied injunctive relief but declared that the state officials' failure to issue paychecks to the class promptly when due violated the Fair Labor Standards Act. 2 It refused to award liquidated damages pursuant to 29 U.S.C. Sec. 216(b) for two reasons: because the liability under Sec. 216(b) extends to an employer and the employer in this case, the State of California, was not named as a party; and because the state acted in good faith. Biggs's request for prejudgment interest was granted.

State officials now appeal 3 the district court's October 3, 1991 order, raising two issues: whether the FLSA contains an implicit requirement that wages be paid promptly, and if so, does it violate the State of California's Tenth Amendment sovereignty. 4 No appeal is taken from the award of prejudgment interest. Both sides agree that there are no material factual disputes, and that our review is de novo. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. 5

II

The FLSA requires that an employer pay each employee a minimum wage set by the Act. 29 U.S.C. Sec. 206. Section 206(b) mandates that "every employer shall pay" employees the minimum wage if "in any workweek [the employee] is engaged in commerce." 6

State officials contend that the district court erred by concluding that the FLSA contains an implicit requirement that wages be paid promptly when due. Without arguing that payment in this case was in fact "prompt," they urge that the district court's conclusion is not supported by case law, and that the absence of a body of case law regarding prompt payment demonstrates that there is no implied prompt payment requirement. State officials also argue that since full compensation was never in doubt, and California was merely late in paying its employees, there was no violation of the FLSA. In effect, their position is that only nonpayment, not late payment, is prohibited by the Act.

Biggs and amici, on the other hand, argue that the FLSA requires paychecks to be paid on regular paydays. Therefore, in their view, late payment, as well as nonpayment, violates the Act.

A

State officials correctly point out that the FLSA does not in terms say that a minimum wage must be paid promptly. It simply says that employers "shall pay" a minimum wage. However, in construing the FLSA, we must be mindful of the directive that it is to be liberally construed to apply to the furthest reaches consistent with Congressional direction. Mitchell v. Lublin, McGaughy & Assoc., 358 U.S. 207, 211, 79 S.Ct. 260, 264, 3 L.Ed.2d 243 (1959).

This case requires us to consider the obligation to pay in light of the statutory scheme as a whole. The FLSA provides for the recovery of unpaid minimum wages, unpaid overtime compensation, 7 and liquidated damages; and has its own statute of limitations for private enforcement. These provisions necessarily assume that wages are due at some point, and thereafter become unpaid.

We start with Sec. 206(b). It directs every employer to pay the minimum wage. The obligation kicks in once an employee has done covered work in any workweek. To us, "shall pay" plainly connotes shall make a payment. If a payday has passed without payment, the employer cannot have met his obligation to "pay."

Section 216(b) then provides that an employer who violates Sec. 206 is liable to the affected employees "in the amount of their unpaid minimum wages, or their unpaid overtime compensation ... and in an additional equal amount as liquidated damages." 29 U.S.C. Sec. 216(b). Unless there is a due date after which minimum wages become unpaid, imposing liability for both unpaid minimum wages and liquidated damages would be meaningless.

The statute must therefore contemplate a time at which Sec. 206 is violated, or, put another way, when minimum wages become "unpaid." "Unpaid minimum wages" have to be "unpaid" as of some distinct point, otherwise courts could not compute either the amount of wages which are unpaid, or the additional "equal" amount of liquidated damages. The only logical point that wages become "unpaid" is when they are not paid at the time work has been done, the minimum wage is due, and wages are ordinarily paid--on payday. Cf. Olson v. Superior Pontiac-GMC, Inc., 765 F.2d 1570, 1579 (11th Cir.1985) ("the employee must actually receive the minimum wage each pay period," emphasis original), modified, 776 F.2d 265 (11th Cir.1985).

Similarly, employers violating the FLSA must pay prejudgment interest on the overdue wages. Ford v. Alfaro, 785 F.2d 835, 842 (9th Cir.1986) ("in the absence of a liquidated damages award, prejudgment interest is necessary to fully compensate employees for the losses they have suffered."). Prejudgment interest cannot be calculated without an amount certain owing from a day certain. As with "unpaid wages" and liquidated damages on "unpaid wages," the only logical point from which to compute the amount of interest is the day the employee's paycheck is ordinarily due. Any other time would be inconsistent with the purpose of prejudgment interest, to make it unattractive for the employer to take advantage of cash flow at the employees' expense, and to make up for the employees' loss of use of funds during the period they were due but unpaid.

Finally, the FLSA contains its own statute of limitations for an action for unpaid minimum wages and for liquidated damages. 29 U.S.C. Sec. 255(a). 8 Statutes of limitation have to start running from some point, and the most logical point a cause of action for unpaid minimum wages or liquidated damages (which are merely double the amount unpaid) accrues is the day the employee's paycheck is normally issued, but isn't. See Beebe v. United States, 640 F.2d 1283, 1293, 226 Ct.Cl. 308 (1981) (FLSA claims are continuing claims and a separate cause of action "accrues" every payday that overtime is not paid); McIntyre v. Dir. of Youth Rehab., 795 F.Supp. 668, 674 (D.Del.1992) (courts have adopted uniform approach under Beebe that cause of action accrues each paycheck); see also Cook v. United States, 855 F.2d 848, 851 (Fed.Cir.1988) (general rule is that FLSA claims accrue at the end of each pay period); Mid-Continent Petroleum Corp. v. Keen, 157 F.2d 310, 316 (8th Cir.1946) (accrues each payday); accord Aronsen v. Crown Zellerbach, 662 F.2d 584, 593 (9th Cir.1981) (statute of limitations for Title VII and Age Discrimination suits runs from day employee should know employer violated law), cert. denied, 459 U.S. 1200, 103 S.Ct. 1183, 75 L.Ed.2d 431 (1983).

State officials urge us to distinguish between late payment and nonpayment, but offer us no principled way to make such a distinction. We cannot come up with one either. We could try to create a balancing test, as the district court did when it wrote that the FLSA "require[s] payment which is reasonably prompt under the totality of the circumstances in the individual case." Any kind of sliding scale we can think of, however, would be contrary to the statute's direction that employers shall "pay" the minimum wage and that employees are entitled to recover "unpaid" minimum wages. It also would force employees, employers, and courts alike to guess when "late payment" becomes "nonpayment" in order to determine whether the statute of limitations has begun to run, the amount...

To continue reading

Request your trial
136 cases
  • Avalos v. United States
    • United States
    • U.S. Court of Appeals — Federal Circuit
    • November 30, 2022
    ...implicit timely payment obligation to ordinarily require employers to pay wages by "the employee's regular payday." Biggs v. Wilson , 1 F.3d 1537, 1541 (9th Cir. 1993) ; see also, e.g., Roland Elec. Co. v. Black , 163 F.2d 417, 421 (4th Cir. 1947) ("[I]f [an employer] fails to pay overtime ......
  • Schmitt v. State of Kan.
    • United States
    • U.S. District Court — District of Kansas
    • February 18, 1994
    ...877 F.2d 814, 821 n. 9 (10th Cir.1998). 4 Accord Reich v. State of New York, 3 F.3d 581, 589-590 (2d Cir.1993); Biggs v. Wilson, 1 F.3d 1537, 1543-1544 (9th Cir.1993); May v. Arkansas Forestry Com'n, 993 F.2d 632, 635-636 (8th Cir.1993); Parr v. State of California, 811 F.Supp. 507, 511-512......
  • City of Oakland v. Hassey
    • United States
    • California Court of Appeals Court of Appeals
    • June 17, 2008
    ...court that Hassey's causes of action began to run when he received his final checks in February and April 1999.19 (Biggs v. Wilson (9th Cir. 1993) 1 F.3d 1537, 1540 [FLSA cause of action accrues on payday when minimum wages are unpaid].) Oakland filed its original complaint on October 17, 2......
  • Cahill v. City of New Brunswick
    • United States
    • U.S. District Court — District of New Jersey
    • May 23, 2000
    ...Brooks decisions are controlling and that the City of New Brunswick must be adjudged liable as a matter of law. See also Biggs v. Wilson, 1 F.3d 1537 (9th Cir.1993) (holding that late payment minimum wages constitutes nonpayment under FLSA, based on exhaustive review of general statutory sc......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT