EmploymentQuestion 994 of 1605
An employer withholds a portion of final wages based on a genuine, reasonable dispute about the amount owed. If a court later finds a small amount was in fact due, are waiting-time penalties automatic?
a.No; a good-faith dispute over whether wages were owed can defeat the 'willful' element needed for §203 penalties
b.Yes; good faith is never a defense
c.Yes; §203 penalties always apply whenever any amount is later found due
d.No; but only if the dispute exceeded $10,000
Explanation
Waiting-time penalties under Labor Code §203 require a 'willful' failure to pay. A genuine, good-faith dispute over whether wages were owed (based on a reasonable, if ultimately incorrect, legal position) can negate willfulness and defeat the penalty. The dispute must be bona fide, not a pretext to delay clearly owed wages, and there is no dollar threshold for the defense.
Law Reference: Labor Code §203; good-faith disputePractice all 1605 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)