In Naranjo v. Spectrum Security Services, Inc., the Supreme Court today holds that a statutory penalty for an employer’s “knowing and intentional failure” to provide required wage information to an employee (Labor Code section 226(e)(1)) cannot be imposed if the “employer reasonably and in good faith believed it was providing a complete and accurate wage statement.”

This is the court’s second Naranjo opinion. Two years ago, the court held in the case that the extra-hour’s pay an employer owes for improperly making an employee work during all or part of a meal or rest break period constitutes statutory “wages” that must be reported on required wage statements and be paid by specified deadlines when an employee leaves the job. (Naranjo v. Spectrum Security Services, Inc. (2022) 13 Cal.5th 93.) But the court left it to the Court of Appeal on remand to determine whether the defendant’s violations of those mandates were “willful[ ]” and “knowing and intentional” so as to justify penalty assessments.

The court’s unanimous opinion by Justice Leondra Kruger (Chief Justice Patricia Guerrero was recused) declines to follow the rule that ignorance of the law is no excuse. It states, “this venerable principle, stated categorically as it often is, nonetheless has well-understood exceptions. The law sometimes does make the consequences of a person’s actions depend on the person’s understanding of the governing law.” And, the court concludes, as applicable to the statute in issue, “When laws are specifically aimed at conduct that has been undertaken with disrespect or disregard for the governing law, it follows that the law will exempt unwitting violations.”

Resolving a conflict in the case law, the court affirms the published opinion of the Second District, Division Four, Court of Appeal. It disapproves the First District, Division Two, opinion in Gola v. University of San Francisco (2023) 90 Cal.App.5th 548, the First District, Division One, opinion in Furry v. East Bay Publishing, LLC (2018) 30 Cal.App.5th 1072, and the First District, Division Three, opinion in Kao v. Holiday (2017) 12 Cal.App.5th 947.

The court denied review and a depublication request in Gola. (Related: Disapprovals of review-denied opinions show the Supreme Court is not an error-correction court.) There was no petition for review in Furry or Kao.