California Labor Code 218.5 Overview & Example Scenarios

Legally reviewed by: Jessica Anvar Stotz, JD, MBA

California Labor Code 218.5 states that after a case involving an employer refusing to pay wages, fringe benefits, or health and welfare-related fund contributions, the winning party is awarded reasonable attorney’s fees by the court.

In order to receive these fees, they must have been requested when the action was first brought (in the initial complaint).

California Labor Code 218.5 Explained in 90 Seconds

The core benefit of California Labor Code 218.5 is that it allows employees to recover their attorney’s fees after they win against their employer in court for the employer refusing to pay the employee’s wages.

This helps to offset the financial pressure a lawsuit can otherwise put on an employee and allows them to feel more confident in bringing a claim. Notably, fees will only be awarded if they are “reasonable.”

This means that employees should still realistically limit the scope of their claim and not incur excessive attorney’s expenses, as they will likely not be awarded. It is also vital to remember that this Labor Code only applies when the employee wins against their employer; if they lose their claim, their attorney’s fees will not be covered by this section.

It is important to keep in mind that a claim for “nonpayment of wages” does not necessarily need to just be an employee’s wages. It also includes things like paying below the minimum wage, having overtime payment withheld, the withholding of fringe benefits, and missing health and welfare fund contributions. Any of these being present would create an action for a nonpayment of wages claim.

On the employer side of things, employers are also able to recover their attorney’s fees under California Labor Code 218.5 under a particular set of circumstances. If anyone other than the employee prevails, the court will award attorney’s fees to that party only if the employee brought the claim in bad faith.

Who Can Recover Attorney’s Fees Under Labor Code 218.5?

Although California Labor Code 218.5 primarily benefits employees who are pursuing unpaid wage claims against their employers, they are not the only ones who benefit from it. For employees who bring an unpaid wage claim against their employer, reasonable attorney’s fees will be awarded by the court if they win.

If any other party prevails in the case, the court will award attorney’s fees only if the employee who brought the case did so in bad faith. In other words, the employer may be reimbursed for their attorney’s fees if the employee’s claim was made in bad faith.

How Do You Recover Attorney’s Fees Under Labor Code 218.5?

For an employee to recover attorney’s fees under CA Labor Code 218.5, they must first bring a claim against their employer. To be covered by Labor Code 218.5, such a claim must involve the nonpayment of wages or withholding of financial benefits of some kind (such as overtime payments or fringe benefits).

The next step is for the employee to hire a skilled employment attorney to organize and bring their case. Crucially, when the attorney initially files the complaint, they must state that attorney’s fees are sought upon prevailing. If this is not included, the employee will not receive attorney’s fees under Labor Code 218.5 even if they win.

Once the employee wins their case against the employer, they can invoke Labor Code 218.5 to receive reasonable attorney’s fees for the case assuming it was requested in the complaint.

What are “Reasonable” Attorney’s Fees?

Although there is no hard line that determines whether attorney’s fees are reasonable, courts will consider several factors in making this determination. These include:

• Complexity of the case: The more complex a case is, the more likely it is that a court is willing to award more money for attorney’s fees. If a case appears very simple but a party has accrued extensive legal expenses, a court will likely not consider them reasonable.
• Experience of the attorney: A more experienced attorney is generally more likely to efficiently navigate a case and minimize costs where possible. A client whose attorney should “know better” but still incurred excessive costs will likely have part of their attorney’s fees considered unreasonable by the court.
• Time spent on the case: Since time is money, a longer case will generally cost more for an attorney to address. If the time spent on the case is disproportionate to the amount of attorney’s fees, a court is less likely to award those fees.
• Prevailing market rates for similar legal services: Courts will consider the cost of similar legal services in the area to determine whether attorney’s fees are reasonable. An attorney charging excessively more than his peers may result in fewer fees being awarded by a court.

What if My Employer Doesn’t Pay the Awarded Attorney’s Fees?

A court can enforce the attorney’s fee legal award against the employer who refuses to pay through a court order. In a situation where an employer refuses to pay the attorney’s fees awarded by the court, it is usually a good idea to seek further advice from your legal counsel. They will have the best course of action to ensure you receive the awarded fees.

Alternatives to Lawsuits for Wage Claims

An employee who does not want to pursue a lawsuit against their employer for an unpaid wages claim has some other options for receiving relief. The first option is to file a claim with the California Department of Labor Standards Enforcement, or DLSE.

Such a claim can be filed in a variety of ways: online, in person, through the mail, or by email. To help the success of a claim, payment information (hours worked, breaks taken, paystubs), the name and address of the company being claimed against, and the information of any other responsible parties is important to have and submit.

The second option will vary depending on the terms of the employee’s contract. If mandated by the contract, an employee may instead pursue arbitration with their employer to resolve the unpaid wages claim. The arbitration process is separate and distinct from the lawsuit process and requires its own approach.

Example Scenarios

Example 1: Employee Prevails Against Employer, Employer Refuses to Pay Attorney’s Fees Award

• Scenario: In an action against her employer, an employee successfully wins and is awarded attorney’s fees by the court. The employer pays the unpaid wages according to the judgment but refuses to pay the attorney’s fees.
• Violation: Employer refusing to pay reasonable attorney’s fees as awarded by the court.
• How Labor Code 218.5 Protects: Labor Code 218.5 requires that employers pay the reasonable attorney’s fees of an employee who prevails in a lawsuit against them to receive unpaid wages. In this case, the court might pursue further legal action to get the employer to comply, while the employee might seek additional legal information from their counsel.

Example 2: Employer Prevails Against Employee, Employee Acted in Good Faith

• Scenario: In an action against his employer, a bank employee loses. The court does not award attorney’s fees to the employer, and the employer claims they are entitled to them.
• Violation: Prevailing party who is not an employee does not receive attorney’s fees unless the employee brought the claim in bad faith.
• How Labor Code 218.5 Protects: In such a situation, the court will not award attorney’s fees to the employer unless the employee brought the initial claim in bad faith. Since that is not the case here, the employer is simply not entitled to attorney’s fees.

Example 3: Employee Prevails Against Employer, Accrued Excessive Legal Fees

• Scenario: An employee prevails against his employer after years of litigation, even though the claim should only have taken about half as long as it did to resolve. The employee has accrued excessive legal fees, but the court awards all of them.
• Violation: Court over-awarding prevailing party. Fees must be restricted to those reasonable.
• How Labor Code 218.5 Protects: Labor Code 218.5 requires that courts only award attorney’s fees that are “reasonable.” The reasonability of attorney’s fees is determined by weighing several factors, like the complexity of the case, how long the case goes on for, and the experience of the attorney. In this case, the court would need to review the award and make it more reasonable.

Resources for Employers and Employees

1. California Labor Code 218.5
2. California Department of Industrial Regulations: How to File a Wage Claim
3. California Department of Industrial Regulations: Required Documentation for a Wage Claim
4. California Department of Industrial Regulations: Waiting Time Penalty
5. S. Department of Labor: Wage Garnishment

Connect with an Attorney

California’s employment laws are in place to protect employees from improper actions taken by their employers. If you think you have a claim against your employer for improperly withholding unpaid wages, contact LawLinq today.

We can connect you with an experienced employment law attorney who can help you navigate the world of California employment law and get you the compensation you deserve. Some claims against employers can be time-sensitive: to make sure you receive a remedy, contact us today to get answers.

About the Author

Jessica Anvar

California Consumer Litigation Attorney Jessica Anvar, Esq. is the Founder and Managing Partner of Lemon Law Experts California’s leading lemon law firm. She has multiple years’ worth of experience working with both state and federal lemon laws. Her practice focuses exclusively on consumer protection cases. Ms. Anvar received her J.D. from Loyola Law School. She also earned a Master of Business Administration degree from Loyola Marymount University. Jessica is very active in her local legal community and has helped thousands of clients across the state of California. She has an outstanding record as a true advocate for consumers.