Is There A Statute Of Limitations For Unpaid Wages?

California has a statute of limitations for employees to recover unpaid wages.  In the context of unpaid wages, a statute of limitations is the time limit within which an employee must file a lawsuit to preserve the right to recover the unpaid wages from an employer.  Also, the statute of limitations is the same regardless of whether those unpaid wages are regular or overtime wages. However different time limits may apply to other types of wage and hour claims closely related to unpaid wages.

Currently, the statute of limitations for unpaid wages is only three (3) years.  That means that employees may only recover unpaid wages as far back as three (3) years from the date of filing for the lawsuit.  For example, if an employee starts accruing unpaid wages every workday beginning when she started working for an employer on January 1, 2010 and did not file a lawsuit for the unpaid wages until January 1, 2019, then the employee can only recover the unpaid wages going back as far as three (3) years or January 1, 2016 and cannot recover the unpaid wages lost from January 1, 2010 to December 31, 2015. 

However, if an employee successfully proves a claim of unfair competition against an employer under California’s Unfair Competition Law, then an employee can actually enjoy a four (4) year statute of limitations look back instead of only three.  In California, unfair competition is defined as: (1) an unlawful business act or practice; (2) an unfair business act or practice; (3) a fraudulent business act or practice; (4) unfair, deceptive, untrue or misleading advertising; or (5) any act prohibited by California Business & Professions Code sections 17500 et seq.  Under the example above, the employee could potentially recover all four years of unpaid wages going back to January 1, 2015 if she proved a claim of unfair competition in addition to proving a claim of unpaid wages.

(See Link(s): Code of Civil Procedure Section 338 and Business & Professions Code Section 17208)