Yes, an owner or officer can be named personally in a California wage case. Labor Code section 558.1 says an employer “or other person acting on behalf of an employer” who “violates, or causes to be violated” certain wage laws “may be held liable as the employer for such violation.” Being an owner is not enough by itself. The individual has to have been personally involved in the violation or to have caused it, and that factual question is where the defense is won or lost.
Who can be held personally liable under section 558.1?
Only a natural person in one of four roles. Section 558.1(b) limits the phrase “other person acting on behalf of an employer” to “a natural person who is an owner, director, officer, or managing agent of the employer.” A payroll clerk or a shift supervisor doesn’t fit that list unless they also hold one of those roles.
“Managing agent” borrows its meaning from the punitive damages statute, Civil Code section 3294(b). California courts read that term narrowly: it reaches employees with broad discretion over decisions that set company policy, not every manager with a title. A regional manager who follows a pay policy someone else wrote is a weaker target than the vice president who wrote it.
The statute took effect January 1, 2016, through Senate Bill 588. The published decision in Espinoza v. Hepta Run, Inc. (2022) noted that the employee there sought damages from the owner only from that date forward, because the statute “did not go into effect until January 1, 2016.”
Which wage claims does the statute reach?
A defined list, not every Labor Code claim. Section 558.1(a) covers violations of “any provision regulating minimum wages or hours and days of work in any order of the Industrial Welfare Commission,” plus “Sections 203, 226, 226.7, 1193.6, 1194, or 2802.” (The Industrial Welfare Commission’s wage orders are the industry-by-industry regulations that set California’s meal break and overtime rules, along with its recordkeeping requirements.)
In practical terms, that list covers most of what shows up in a wage complaint:
| Claim | Statute | Individual exposure under 558.1? |
|---|---|---|
| Minimum wage and overtime | Wage orders; Lab. Code 1194 | Yes, if the person violated or caused the violation |
| Meal and rest premiums | Lab. Code 226.7 | Yes, same condition |
| Waiting time penalties on final pay | Lab. Code 203 | Yes, same condition |
| Wage statement penalties | Lab. Code 226 | Yes, same condition |
| Business expense reimbursement | Lab. Code 2802 | Yes, same condition |
| FEHA discrimination or wrongful termination | Gov. Code 12940; common law | Not under 558.1 (separate rules apply) |
Section 558.1 also says it doesn’t “limit the definition of employer under existing law.” So a plaintiff can still argue that an owner is the employer under the wage orders, or that the company is the owner’s alter ego. Those are separate theories with separate proof.
Is owning the company enough to be liable?
No. The leading published opinion, Usher v. White (2021) 64 Cal.App.5th 883, held that an owner “must either have been personally involved in the purported violation of one or more of the enumerated provisions; or, absent such personal involvement, had sufficient participation in the activities of the employer, including, for example, over those responsible for the alleged wage and hour violations.” The court affirmed summary judgment for a co-owner who wasn’t involved in the decision to classify the workers as independent contractors.
The other side of that line is Espinoza. There the owner testified that he knew nothing about the trucking business, and the trial court didn’t believe him. The Court of Appeal, in a published opinion, agreed that “an owner’s or officer’s approval of a corporate policy that violates the Labor Code is sufficient to find that individual caused the Labor Code violation within the meaning of section 558.1.”
Put the two cases together and the test is about decisions, not titles. Who set the pay plan? Who approved the classification? Who controlled payroll and signed off on the final paychecks? Plaintiffs’ lawyers name every owner and officer they can find, because naming them costs nothing and adds pressure. The defense is often a short declaration, backed by documents, showing that a named individual had no hand in the policy being challenged.
Can a plaintiff name owners just to add pressure?
They try, and the pleading stage is the first place to push back. Usher collected federal decisions dismissing section 558.1 claims where the complaint relied only on the defendants’ positions as owners or officers. California’s pleading standard is more forgiving than federal court’s, so a demurrer won’t always work in state court. But a complaint that names the CEO in one sentence, with no facts about what the CEO did, is a candidate for an early motion or a stipulated dismissal once the facts are shared.
Timing matters. The individual defendant has the same incentive as the company to show early that the pay practice was set by someone else. Owners who were never involved should say so in a sworn declaration as early as the procedure allows, before months of discovery make the case expensive for everyone.
A word of caution for owners who were involved: an individual named under section 558.1 is a separate defendant with separate interests. If the company’s best defense is that a particular officer acted on their own, the company and that officer may need separate counsel. Sort that out before the first joint filing.
Does an owner named in a Labor Commissioner award have to post an appeal bond?
The answer is unsettled. A party appealing a Labor Commissioner award gets a new trial in superior court, but under Labor Code section 98.2(b), “an employer shall first post an undertaking with the reviewing court in the amount of the order, decision, or award.” Two published Court of Appeal decisions disagree about whether an individual found liable under section 558.1 must post that bond too.
In Lorenzo v. San Francisco Zen Center (2025) 116 Cal.App.5th 258, the court held that individuals held liable as the employer must post it. In Ehrenkranz v. San Francisco Zen Center (2026), another division disagreed and concluded “that the plain language of section 98.2(b) does not support” requiring an individual held “liable as the employer” under section 558.1 to post the undertaking.
The Supreme Court of California has granted review in both cases. It limited review in Lorenzo to a First Amendment question, and it granted and held Ehrenkranz. Under rule 8.1115(e)(1) of the California Rules of Court, while review is pending a published Court of Appeal opinion “has no binding or precedential effect, and may be cited for potentially persuasive value only.”
Lorenzo treated the bond requirement as jurisdictional, and it found the company’s bond didn’t help the individuals because, by its terms, it covered only the company. For an owner who wants a new trial, the cautious course is a bond that names the company and each individual found liable, posted within the appeal window. Losing the appeal on a procedural point costs more than the extra bond language.
Before you respond to a claim that names you personally
Individual liability changes the settlement math, because the person deciding whether to settle is also a defendant. Get the facts on who decided what before anyone talks numbers. The firm’s California wage and hour defense page describes how wage claims and Labor Commissioner appeals are evaluated.
- Put a litigation hold on payroll data, timekeeping records, wage statements, pay plans, independent contractor agreements, and the emails and texts about how the challenged pay practice was set up.
- Calendar the deadline on the complaint, the Labor Commissioner notice, or the award, and check for an arbitration agreement and an EPLI policy, along with any notice the policy requires.
- Map who approved each pay practice at issue, from the pay plan to the classification decision to the final paycheck, and identify the witnesses who can prove it.
- Pull the documents that show each named individual’s actual role: board minutes, signature authority on payroll accounts, and the org chart for the relevant period.
- Talk to a lawyer before any named individual responds, contacts the employee or the employee’s lawyer, or offers to pay anything, and decide early whether the company and the individuals can share counsel.
Owner and officer wage liability questions
Can an owner be personally liable if the company goes out of business?
Yes, that was one reason the Legislature enacted the statute. A judgment under section 558.1 runs against the individual, so closing the company doesn’t erase it. The same rules apply, though: the employee still has to prove the individual violated or caused the violation, and the claim is limited to the categories the statute lists.
Does section 558.1 cover harassment or discrimination claims?
No. Section 558.1 covers the listed wage and hour provisions only. Individual liability under the Fair Employment and Housing Act (FEHA) follows its own rules. Individual employees can be personally liable for harassment, but generally not for discrimination or retaliation decisions made as part of their jobs. Those are separate questions with separate defenses.
Is a human resources manager a “managing agent”?
Usually not, unless the HR manager actually sets company policy. Section 558.1(b) ties “managing agent” to the meaning in Civil Code section 3294(b), and California courts reserve that term for people with substantial discretion over decisions that determine corporate policy. An HR manager who administers a pay plan designed by others is a weak fit. A chief people officer who designed it is a stronger one.
Can the company indemnify an officer for a 558.1 judgment?
Often, depending on the company’s bylaws, any indemnification agreement, and Labor Code section 2802 for an officer who is also an employee. Whether insurance covers it is a separate question. EPLI and D&O policies often exclude unpaid wages themselves while covering defense costs. Read the policy and tender the claim early.
If a lawsuit or wage claim names an owner or officer personally
If an employee’s lawyer or the Labor Commissioner has named your company’s owners or officers as individual defendants, the records showing who set each pay practice usually decide whether those individuals stay in the case. Rosenberger + Kawabata represents employers defending employment lawsuits and claims through its business litigation practice, including claims involving individual liability for unpaid wages. Contact Rosenberger + Kawabata online for a confidential consultation, or call (310) 894-6921.
Sources
The statutes are Labor Code section 558.1, Labor Code section 98.2, and Civil Code section 3294. The decisions are Usher v. White (2021) 64 Cal.App.5th 883, Espinoza v. Hepta Run, Inc. (2022), and Ehrenkranz v. San Francisco Zen Center (2026), each certified for publication, with review granted in Ehrenkranz and in Lorenzo v. San Francisco Zen Center. The citation rule is California Rules of Court, rule 8.1115.
This post is general information about California and federal employment law as of November 7, 2026. It is not legal advice, and reading it does not create an attorney-client relationship. Employment statutes, regulations, and court decisions change often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.