Labor Code §558.1 – Personal Liability for Wage Violations

Labor Code section 558.1 says an owner, director, officer or managing agent who violates, or causes a violation of, certain California wage-and-hour laws “may be held liable as the employer” for that violation. In other words, the person behind the company can be personally on the hook for unpaid minimum wage and overtime, late final pay, pay stub violations, missed break premiums and unreimbursed expenses. The section took effect January 1, 2016.

This page explains section 558.1 itself. For the civil penalties the state can assess for hours violations, see our explainer on Labor Code §558.

What Labor Code 558.1 says

Subdivision	What it says (paraphrased)
(a)	Any employer “or other person acting on behalf of an employer” who violates, or causes to be violated, the minimum wage or hours-and-days provisions of an Industrial Welfare Commission (IWC) wage order, or Labor Code 203, 226, 226.7, 1193.6, 1194 or 2802, “may be held liable as the employer for such violation.”
(b)	“Other person acting on behalf of an employer” is limited to a natural person who is an owner, director, officer or managing agent of the employer. “Managing agent” has the meaning in Civil Code 3294(b).
(c)	Nothing in the section limits the definition of “employer” under existing law.

Section 558.1 was added by SB 588 (Statutes of 2015, chapter 803), effective January 1, 2016.

Key fact

Who section 558.1 covers

The section protects any employee whose wages fall under the listed laws. The people it can make liable are narrower. Under subdivision (b), they must be “a natural person,” so the section reaches individuals, not other companies, and only four kinds of individuals:

• Owners of the business.
• Directors who sit on a corporation’s board.
• Officers, such as the CEO, president, CFO or secretary.
• Managing agents. Civil Code 3294(b) uses this term without spelling it out. The California Supreme Court, in White v. Ultramar, Inc. (1999) 21 Cal.4th 563, read it to include only employees who “exercise substantial independent authority and judgment” so that their decisions “ultimately determine corporate policy.” A shift lead or store manager who follows company policy usually won’t fit that test; a regional executive who sets pay practices might.

Holding a title is not enough by itself. The person must also have violated the law or “caused” the violation.

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Which violations it reaches

Law listed in 558.1(a)	What it covers
IWC wage orders (minimum wage, hours and days of work)	Minimum wage and the hours rules in your industry’s wage order
Labor Code 203	Waiting time penalties for late final pay
Labor Code 226	Accurate itemized wage statements
Labor Code 226.7	Premium pay for missed meal, rest and recovery periods
Labor Code 1193.6	State lawsuits to recover unpaid minimum wage or overtime
Labor Code 1194	Your own lawsuit for unpaid minimum wage and overtime
Labor Code 2802	Reimbursement of work expenses

What “causes to be violated” means

The statute doesn’t define it. In Seviour-Iloff v. LaPaille (Cal. Ct. App., 1st Dist., June 28, 2022, modified July 21, 2022), the Court of Appeal applied the test from an earlier case, asking whether the individual had “sufficient participation in the activities of the employer,” and said the question “cannot be determined by any bright-line rule.” In practice, proof that an owner or executive set the schedules, decided how people were paid, or knew about the problem and kept the practice going is the kind of evidence that can show that participation.

The same opinion made two other points that help workers:

• You can sue under section 558.1 yourself. The court held the section supports a private right of action.
• “May” is not a loophole. The court held the word “may” in “may be held liable” “does not grant judicial discretion” to excuse an individual who meets the test.

The California Supreme Court later reversed that decision on two other issues in Iloff v. LaPaille (Aug. 21, 2025): an employer claiming good faith to avoid liquidated damages for minimum wage violations must show it made a reasonable attempt to learn what the law required, and a worker may raise paid sick leave claims when the employer appeals a Labor Commissioner award. The Supreme Court did not review the section 558.1 rulings. On remand, the Court of Appeal repeated them in a published opinion filed December 23, 2025.

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Exceptions and limits

• Only the listed laws. Section 558.1 does not cover laws missing from its list, such as payday timing under Labor Code 204, and it has nothing to do with wrongful termination or discrimination claims. Whether an individual can be liable for those depends on other laws.
• Ordinary supervisors. A manager who is not an owner, director, officer or managing agent is outside subdivision (b), even if they cut your hours or denied your break.
• No effect on other theories. Subdivision (c) keeps the existing definition of “employer,” so joint employer claims and client-employer liability under Labor Code 2810.3 still work alongside section 558.1.

Key fact

Penalties and remedies

An individual held liable under section 558.1 is liable “as the employer,” so the remedies come from the underlying law:

• Unpaid minimum wage and overtime, with interest and attorney’s fees under Labor Code 1194.
• Waiting time penalties under Labor Code 203: when final pay is willfully late, a day’s wages for each day it is late, up to 30 days.
• Wage statement damages or penalties under Labor Code 226.
• Premium pay under Labor Code 226.7: one additional hour of pay at your regular rate for each workday a meal or rest break was missed.
• Reimbursement of necessary work expenses under Labor Code 2802.

The Labor Commissioner can also pursue individuals. Labor Code 98(a) lets the Labor Commissioner hold hearings to recover civil penalties under section 558 against “an individual liable pursuant to Section 558.1.” Our page on Labor Code §98 wage claims explains that process.

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Deadlines

Section 558.1 has no deadline of its own. The deadline follows the underlying claim:

Claim	General deadline	Source
Minimum wage, overtime, meal and rest break pay, reimbursements	3 years	Labor Commissioner deadline guidance; Code Civ. Proc. 338(a)
Waiting time penalties	Same deadline as the wages they arise from	Labor Code 203(b)
Penalties under a statute (such as some Labor Code 226 penalties)	1 year	Code Civ. Proc. 340(a)

Name individual defendants early. Adding an owner after the deadline has passed can be much harder.

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Related sections

Section	What it adds
Labor Code 558	Civil penalties for hours violations against an employer or person acting on its behalf
Labor Code 98(a)	Labor Commissioner hearings may include individuals liable under 558.1
Labor Code 2810.3	Client employers share liability for workers supplied by staffing agencies and labor contractors
Civil Code 3294(b)	Source of the “managing agent” term

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How it plays out

💡 Example: Rosa, a hypothetical line cook, earns $20 an hour at a small restaurant LLC. The sole owner runs the kitchen, sets the schedules and tells the managers not to pay overtime. For 26 weeks Rosa works 4 hours a week past 8 hours in a workday, and those overtime hours are never paid. At 1.5 × $20 = $30 an hour, that is 4 × 26 × $30 = $3,120. When she quits, the owner willfully holds her final pay for more than 30 days. Using an 8-hour day for simplicity, her daily rate is 8 × $20 = $160, so the waiting time penalty is 30 × $160 = $4,800. Her total claim is $3,120 + $4,800 = $7,920, plus interest. If the LLC closes, Rosa may still be able to hold the owner personally liable under section 558.1, because the owner caused both the overtime and the final pay violations.

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What to do if you think an owner is responsible

• Write down who set your schedule and pay and who gave instructions about overtime, breaks and expenses.
• Save texts, emails and group chats showing the owner’s or executive’s involvement.
• Look up the company on the California Secretary of State’s business search to see its officers and status.
• Talk to a lawyer before you file, so the right people are named from the start. Our wage and hour practice page explains how we approach these claims.

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Frequently asked questions

Can I sue the owner of my company personally for unpaid wages in California?

You may be able to. If the owner violated or caused a violation of one of the laws listed in section 558.1, the owner “may be held liable as the employer.” The Court of Appeal has held workers can bring that claim themselves.

Who counts as a managing agent under section 558.1?

Section 558.1 borrows the meaning from Civil Code 3294(b). The California Supreme Court has read that to mean employees who exercise substantial independent authority and judgment so that their decisions ultimately determine company policy, not every supervisor.

Can my supervisor be personally liable under section 558.1?

Only if the supervisor is also an owner, director, officer or managing agent and violated or caused the violation. A line supervisor who doesn’t set company policy usually falls outside the section.

Does section 558.1 cover every Labor Code violation?

No. It covers the minimum wage and hours provisions of the IWC wage orders and Labor Code 203, 226, 226.7, 1193.6, 1194 and 2802.

Does it matter that the company is closed or out of money?

The statute doesn’t make individual liability depend on whether the company can pay. That is often when naming the individual matters most.

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Sources

• Labor Code 558.1 (California Legislative Information)
• Labor Code 558, Labor Code 98 and Labor Code 203
• Labor Code 1193.6
• Civil Code 3294
• Seviour-Iloff v. LaPaille (Cal. Ct. App. 2022), modified opinion
• Iloff v. LaPaille (Cal. Supreme Court, Aug. 21, 2025)
• Iloff v. LaPaille (Cal. Ct. App., Dec. 23, 2025), opinion on remand
• White v. Ultramar, Inc. (1999) 21 Cal.4th 563
• Labor Commissioner: How to File a Wage Claim (filing deadlines)

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