Can an employer be held liable for breach of contract if an employee discovers that the employee has agreed to work for them at a lower wage than the prevailing wage?

California, United States of America


The following excerpt is from Aubry v. Tri-City Hospital Dist., 2 Cal.4th 962, 9 Cal.Rptr.2d 92 (Cal. 1992):

An example demonstrates the error of the majority's claim. An employer and an employee agree that the employee will work for the employer at a wage less than the prevailing wage. The employee then discovers that the wage the employee has agreed to is less than that required by statute. If the employee could sue only for breach of contract, the employee would have no [2 Cal.4th 976] right of action, because the employer did not violate the contract. The employer, however, did violate the statute by paying less than the prevailing wage. In that situation, the employee has a statutory right of action. (Lab.Code, 1194, subd. (a). 4) The action is statutory in nature, and not contractual, because " 'the liability would not exist but for the statute, and the obligation is created by law in the absence of an agreement.' " (Aubry v. Goldhor (1988) 201 Cal.App.3d 399, 404, 247 Cal.Rptr. 205.)

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