California Governor Jerry Brown has signed legislation (S.B. 462) amending the California Labor Code to limit employers’ ability to recover attorney’s fees and costs in actions for nonpayment of wages. Previously, California case law left open the possibility that Labor Code Section 218.5 permits the prevailing party, either the employee or employer, to recover fees and costs. Effective January 1, 2014, employers may recover their defense costs only if they prove that an employee brought the action in “bad faith.”
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