Employment Law Blog

News, trends and analysis in employment law and HR

Jun 24, 2014

Class action claim for final pay violations allowed to proceed

Wage and Hour 

A former PetSmart groomer has been given the green light to proceed with her class action lawsuit alleging that PetSmart’s practice of paying departing employees with a prepaid ATM card was a violation of the California Labor Code.

A former PetSmart groomer has been given the green light to proceed with her class action lawsuit alleging that PetSmart’s practice of paying departing employees with a prepaid ATM card was a violation of the California Labor Code. Section 212(a) of the code requires that employers pay wages that are “negotiable and payable in cash, on demand, without discount, at some established place of business in the state....” The former groomer alleged that the paycards used by PetSmart were subject to fees and therefore did not meet the requirement that she be able to obtain her pay in cash without discount. Additionally, she argued that when an employee had chosen a different method of payment for regular paychecks (direct deposit or paper check), the employer’s practice of using the paycards across the board for departing employees violated California Labor Code section 213, which requires an employee’s authorization to use a paycard. She will move forward with the class action suit representing over 800 former PetSmart employees (Pace v. PetSmart Inc., CD Cal, June 2014).

Tips: Making mistakes on final paychecks can have significant implications. Make sure your payment method meets all state requirements, and be cautious about making a change to an employee’s authorized payment method. Contact your Vigilant staff representative with any questions. For guidance on other paycheck issues, see our Legal Guides, “Final Paychecks” (1648) and “Direct Deposit of Employee Paychecks” (2539).

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