You Be the Judge

Employee Loans

Your company has loaned an employee $2,000 for personal use. When he was laid off, the company deducted the balance due ($1,000) on the loan from his final paycheck.


This is not legal. Under California law, an employee must be paid all wages final wages "without abatement or reduction." By illegally deducting the loan balance from the final pay, at a minimum the employer will be exposed to Department of Labor Waiting Time Penalties of up to 6 weeks wages.

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Pregnancy Disability Leave Capped at 4 Months? Think Again.

A recent California Court of Appeal case has held that an employee disabled by pregnancy may be entitled to additional leave time past the 4 months provided by the Pregnancy Disability Leave Act (“PDL”).  The court reasoned that under the provisions of the Fair Employment & Housing Act (“FEHA”), the employee was entitled to “reasonable accommodation” for complications of pregnancy as a medical condition or disability, in addition to PDL. 

Thus, a pregnant employee is not limited to 4 months of pregnancy leave if additional leave time would allow her to return to work after giving birth, so long as the additional leave doesn’t impose a hardship on the employer.  The court also commented that while an employer must provided PDL regardless of any hardship, leave under FEHA is only available if it does not cause such a hardship. 

Lesson: Whenever an employee takes a mandated leave of absence (PDL, CFRA, etc.) for personal medical reasons, the employer always needs to consider whether additional leave time might be required under the disability leave laws. 

NOTE: This case is not yet final and could be appealed to the California Supreme Court.  However, employers would be wise to follow its dictates unless/until the time for appeal to the Supreme Court has expired.