California has enacted Senate Bill 261, which amends existing law to strengthen enforcement against wage theft and improve collection of unpaid wage judgments.
Under SB 261, employers who fail to satisfy final judgments for unpaid wages will face additional consequences. If a judgment remains unpaid for 180 days after the appeal period ends, the employer will be subject to a civil penalty of up to three times the outstanding judgment amount, including interest.
These penalties are in addition to any other fines allowed by law. Fifty percent of the penalty will go to the employees named in the judgment, and fifty percent will go to the Division of Labor Standards Enforcement to support labor law enforcement and education.
The legislation also requires courts to award all reasonable attorney’s fees and costs to a prevailing plaintiff in any action brought to enforce a judgment or impose consequences on an employer who fails to pay. Successor businesses to the judgment debtor will be jointly and severally liable for these penalties.
The amendments take effect on January 1, 2026.