Section 203 penalties are usually imposed in cases where an employee leaves employment and it is later determined they are owed wages in the form of unpaid overtime or other wages. Under such cases, the Labor Commissioner and courts routinely award Section 203 penalties, which in some cases may exceed the actual wages owed. For example, if an employee leaves employment and is still owed just one day’s pay, which the employer does not pay for 31 days, then the employer is subject to the employee’s daily wage continuing for 30 days. Further, “30 days” does not mean one month, but rather 30 days worth of wages.
Section 203 applies to all private employees, whether they are hourly employees or overtime-exempt employees. Assessment of the penalty is not automatic however. A good faith dispute that any wages are due may prevent imposition of the penalty.