Starting January 1, 2026, employers will face significant ramifications for wage judgments that remain unpaid 180 days after the deadline to appeal the final judgment has passed. After a wage claim proceeds to a hearing, the Division of Labor Standards Enforcement (DLSE) issues a decision and award. If the award is in favor of the employee (i.e., the employer is found to owe the employee wages and/or penalties), the employer has only 10 days to pay it or to appeal it in court.  If the employer does not pay or appeal the judgment within 10 days, the DLSE is required to file papers in court seeking to have a court judgment entered on the award.  If a final judgment is entered by a court, the employer must pay the judgment, including interest, unless the employer has a basis to appeal the judgment and timely files an appeal within 60 days.

If the judgment remains unpaid 180 days after the appeal deadline passes, the employer will be subjected to additional penalties, including:   

• A penalty of up to 3x the unpaid judgment (plus interest), half of which goes to the employee and half to the DLSE. 
• The obligation to pay the employee’s, Labor Commissioner’s, or public prosecutor’s reasonable attorneys’ fees and costs in wage judgment enforcement actions where the plaintiff prevails. 
• Joint and several liability for penalties for successors of the debtor employers. 

Next Steps for Employers 

Employers should identify and resolve any outstanding DLSE orders or wage judgments by December 31^st to avoid the above penalties. Going forward, employers should take steps to enter into and comply with payment plans before the 180-day deadline to avoid triple damages. Engaging counsel early can be critical to obtaining a successful outcome and avoiding unnecessary penalties. For assistance in assessing, defending, and resolving a DLSE wage claim, please reach out to one of the MHS attorneys in our California offices.