1 F.3d 1537 (9th Cir. 1993), 92-15334, Biggs v. Wilson

Docket Nº92-15334, 92-15936.
Citation1 F.3d 1537
Party NameWilliam BIGGS, et al., Plaintiffs-Appellants-Cross-Appellees, v. Pete WILSON, Governor; Kathleen Brown, Treasurer; Gray Davis, Controller, et al., Defendants-Appellees-Cross-Appellants.
Case DateAugust 12, 1993
CourtUnited States Courts of Appeals, United States Courts of Appeals. United States Court of Appeals (9th Circuit)

Page 1537

1 F.3d 1537 (9th Cir. 1993)

William BIGGS, et al., Plaintiffs-Appellants-Cross-Appellees,

v.

Pete WILSON, Governor; Kathleen Brown, Treasurer; Gray

Davis, Controller, et al.,

Defendants-Appellees-Cross-Appellants.

Nos. 92-15334, 92-15936.

United States Court of Appeals, Ninth Circuit

August 12, 1993

Argued and Submitted May 11, 1993.

Page 1538

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

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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

Page 1540

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...

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4 practice notes
  • Establishing a Minimum Wage for Contractors
    • United States
    • Federal Register October 07, 2014
    • October 7, 2014
    ...a minimum pay period duration, it is a violation of the FLSA not to pay a worker on his or her regular payday. See Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993) (holding that ``under the FLSA wages are `unpaid' unless they are paid on the employees' regular payday''). See also 29 CFR 7......
  • Increasing the Minimum Wage for Federal Contractors
    • United States
    • Labor Department,The Secretary Of Labor Office
    • Invalid date
    ...a minimum pay period duration, it is a violation of the FLSA not to pay a worker on his or her regular payday. See Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993) (holding that ``under the FLSA wages are `unpaid' unless they are paid on the employees' regular payday''). See also 29 CFR 7......
  • Increasing the Minimum Wage for Federal Contractors
    • United States
    • The Secretary Of Labor Office
    • Invalid date
    ...a minimum pay period duration, it is a violation of the FLSA not to pay a worker on his or her regular payday. See Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993) (holding that ``under the FLSA wages are `unpaid' unless they are paid on the employees' regular payday''). See also 29 CFR 7......
  • Baxter, 051617 OHAGO, AGO 2017-13
    • United States
    • Attorney General Opinions Ohio
    • May 16, 2017
    ...the pay period and when a paycheck is issued. However, courts in other jurisdictions have considered similar issues. In Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993), the United States Court of Appeals considered the question of whether the FLSA was violated when wages for employees we......
99 cases
  • 833 F.Supp. 1037 (S.D.N.Y. 1993), 89 Civ. 3414, Reich v. Waldbaum, Inc.
    • United States
    • United States District Courts. 2nd Circuit. Southern District of New York
    • September 30, 1993
    ...are split as to recovery of prejudgment interest under section 16(b) where liquidated damages have been denied. Compare Biggs v. Wilson, 1 F.3d 1537 (9th Cir. 1993) and McClanahan v. Mathews, 440 F.2d 320, 325-26 (6th Cir. 1971) and Holtville Alfalfa Mills v. Wyatt, Inc., 230 F.2d 398, 401 ......
  • 108 Cal.App.4th 197, B122178, White v. Davis
    • United States
    • California Court of Appeals
    • May 29, 2002
    ..."the FLSA is violated unless the minimum wage is paid on the employee's regular payday ...." (Biggs v. Wilson (9th Cir. 1993) 1 F.3d 1537, These provisions encompass public employers, including the states. (Biggs v. Wilson, supra, 1 F.3d at p. 1543; 29 U.S.C. § 203(d), (e) (2) (C)......
  • 163 Cal.App.4th 1477, A116360, City of Oakland v. Hassey
    • United States
    • California Court of Appeals
    • June 17, 2008
    ...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, Page 1497 [FLSA cause of action accrues on payday when minimum wages are unpaid].) Oakland filed its original complaint on October 17, 2001. T......
  • 98 Cal.App.4th 969, B122178, White v. Davis
    • United States
    • California Court of Appeals
    • May 29, 2002
    ..."the FLSA is violated unless the minimum wage is paid on the employee's regular payday ...." (Biggs v. Wilson (9th Cir. 1993) 1 F.3d 1537, These provisions encompass public employers, including the states. (Biggs v. Wilson, supra, 1 F.3d at p. 1543; 29 U.S.C. § 203(d), (e) (2) (C)......
  • Request a trial to view additional results
3 provisions
  • Establishing a Minimum Wage for Contractors
    • United States
    • Federal Register October 07, 2014
    • October 7, 2014
    ...a minimum pay period duration, it is a violation of the FLSA not to pay a worker on his or her regular payday. See Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993) (holding that ``under the FLSA wages are `unpaid' unless they are paid on the employees' regular payday''). See also 29 CFR 7......
  • Increasing the Minimum Wage for Federal Contractors
    • United States
    • Labor Department,The Secretary Of Labor Office
    • Invalid date
    ...a minimum pay period duration, it is a violation of the FLSA not to pay a worker on his or her regular payday. See Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993) (holding that ``under the FLSA wages are `unpaid' unless they are paid on the employees' regular payday''). See also 29 CFR 7......
  • Increasing the Minimum Wage for Federal Contractors
    • United States
    • The Secretary Of Labor Office
    • Invalid date
    ...a minimum pay period duration, it is a violation of the FLSA not to pay a worker on his or her regular payday. See Biggs v. Wilson, 1 F.3d 1537, 1538 (9th Cir. 1993) (holding that ``under the FLSA wages are `unpaid' unless they are paid on the employees' regular payday''). See also 29 CFR 7......

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