Guidance on the legal intricacies of wage payment during exceptional circumstances was provided in a recent ruling by the Ninth Circuit Court of Appeals. The case in question, Harstein v. Hyatt Corp., resulted from events during the early stages of the COVID-19 pandemic.
In this case, the Ninth Circuit Court of Appeals found that the Hyatt Corporation (simply referred to as “Hyatt”) had violated California labor law. The issue before the court concerned Hyatt’s treatment of employees at one of its hotels who were furloughed due to the pandemic. The hotel had failed to pay these employees their accrued vacation pay at the time of furlough.
California law stipulates the requirement for the full payment of all wages upon an employee’s separation from the company. As defined by the Court, this payment must also include any earned but unreceived vacation pay.
The handling of this case by the Court provides direction for companies during unprecedented situations. The ruling stands to reinforce the need for companies to adhere to responsible wage practices, even amidst challenges such as a global pandemic.
It is advisable for corporations to take note of this ruling and ensure that their policies and practices align with the requirements of applicable wage and hour laws. In circumstances of employee separation, whether through termination, resignation, or furlough, all due wages, including accrued vacation pay, should be promptly paid out.
For a detailed account of Harstein v. Hyatt Corp., you can read the full analysis by Sheppard Mullin Richter & Hampton LLP here.