Takeaway: The end of a staffing agency employee’s temporary work assignment was not a discharge from her employment, and so the employee was not entitled to immediate payment of final wages under California law.
When an employee of a staffing agency was told not to return to her temporary assignment at a bank, she had not been discharged from employment, a California appeals court recently ruled.
Therefore, the court said, she was not entitled to penalties under the Private Attorneys General Act (PAGA) for the staffing agency’s failure to timely pay her final wages as required by California Labor Code section 201.3(b)(4), which provides that when an employee of a temporary services agency is assigned to work for a client and is discharged by the temporary services agency, wages are due and payable immediately.
About one week into the worker’s assignment to the bank, she was told not to return to her position, allegedly because she had been abusive on the phone to a staffing agency representative. The worker claimed that the staffing agency told her she was “fired,” and that it was “implied” the firing was from the agency, rather than the bank assignment. In a contemporaneous internal e-mail, a representative of the staffing agency characterized her message to the employee as being that she was not to return to the bank due to violent and threatening behavior.
The worker was paid for the work she had done at the bank in accordance with the staffing agency’s regular payroll schedule. She sued the staffing agency, seeking PAGA penalties for the agency’s alleged failure to timely pay final wages to a discharged employee in violation of Section 201.3(b)(4).
The staffing agency sought to have the action dismissed before trial, arguing that the employee was not discharged from employment with the agency, her employer, but only from her assignment at the bank, and therefore the statute had not been violated. The trial court agreed and dismissed the action. The employee appealed.
The appeals court first addressed whether, as a factual matter, the employee had been discharged from her job with the staffing agency. It concluded that she had not. Despite the employee’s claim that an agency representative told her that she had been “fired” and that it was “implied” she was being fired from her position with the agency, the e-mail the agency sent to the employee only referenced her assignment at the bank. Furthermore, the employee remained eligible to take on new assignments with the staffing agency.
The appeals court next addressed the employee’s argument that, even if she had not been discharged from her position with the staffing agency, her discharge from her temporary assignment with the bank constituted a “discharge” for purposes of section 201.3(b)(4), and she was therefore entitled to immediate payment of wages due. The court disagreed with the employee on this claim, as well.
The court noted that its first job in interpreting a statute was to look at the statutory language and give it a plain and commonsense meaning. It was not to consider the statutory language in isolation, but rather look at the entire statute in order to determine its scope and purposes.
The court noted that the California Supreme Court had previously considered the meaning of a “discharge” as used in section 201. The statute does not provide a definition of that term, the high court had noted. Nor is the term elsewhere defined in the Labor Code or in the state wage and hour regulations. The high court reasoned that a commonly understood meaning of “discharge” includes the action of an employer that, having hired an employee to work on a particular job or for a specific term of service, formally releases the employee and ends the employment relationship at the point the job or service term is deemed complete.
While employees have an employment relationship with the temporary services agency, they do not have an employment relationship with the client, the appeals court said. Section 201.3, subdivision (a)(4), defines “client” as the person with whom a temporary services agency has a contractual relationship to provide the services of one or more individuals employed by the temporary services agency.
If an employee of a temporary services agency is assigned to work for a client, a “discharge”—the end of an employment relationship—can only occur when an employee is terminated from work with the temporary services agency, not when the employee is terminated from an assignment with a client, the court said.
The court concluded that section 201.3(b)(4) applies when a staffing agency discharges an employee from employment with the agency, not when the agency terminates an employee from a particular work assignment. The court affirmed the trial court’s dismissal of the case before trial.
Young v. RemX Specialty Staffing, Calif. Ct. App., No. A165081 (May 10, 2023).
Joanne Deschenaux, J.D., is a freelance writer in Annapolis, Md.