Dec 9

Bad Checks: The Good News for Independent Contractors

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Independent contractors can get treble damages for rubber checks.

Independent contractors can get treble damages for rubber checks.

Many independent contractors live paycheck to paycheck. Some live without a paycheck at all. That’s because California’s mandate that an employer pay a non-exempt employee at least twice per month doesn’t apply to an independent contractor.1 So nothing is worse for an independent contractor than having to wait weeks or even months for payment, only to get a check for non-sufficient funds (NSF). But just because a worker is an independent contractor doesn’t mean he has no rights. If your SOB boss writes you an NSF check, you can sue him from A to Z.

How to Get Penalties for Violations of California’s “Bad Check” Statute

If your check bounces, don’t bounce off the walls. You can get the amount of the check and a service charge of up to $25 for the first NSF check and up to $35 for each additional NSF check.2 Your hirer can avoid the service charge(s) only if he gives you: (1) written confirmation from his bank that the check bounced only because of a bank error; or (2) written confirmation that his account had insufficient funds because of a delay in the posting or regularly scheduled transfer of a direct deposit of a Social Security or government benefit assistance payment.3

But you can greatly enhance your recovery if you hire an employment attorney who can send your boss a written demand for payment via certified mail. The demand must alert your hirer to the provisions of the “bad check” statute and the amounts of the check and the applicable service charge.4 If your hirer doesn’t pay up within 30 days of the postmark, he’ll owe treble damages – damages equal to triple the amount of the check, up to $1,500, but not less than $100.5 So if he writes you a rubber check for $500 or more, he’ll owe you $1,500.

How to Overcome the “Good-Faith Dispute” Doctrine in Stop-Payment Cases

Even getting $25 back ism’t always a walk in the park. Your hirer won’t owe services charges or treble damages if the check bounces only because he told the drawee bank to stop payment so he could resolve a “good faith dispute” that wages were due.6 You can still beat him if: (1) the dispute isn’t in good faith; (2) you made a reasonable effort to resolve the dispute before you sued; and (3) you produce copies of the demand and a signed certified mail receipt showing delivery (or attempted delivery if your boss refused to accept delivery) of the demand.7

The “good-faith dispute” doctrine let your hirer avoid all penalties simply by presenting evidence that he reasonably believed he had a legal right to withhold payment.8 But the grounds for his belief better amount to more than “the dog ate it.” Examples of reasonable grounds for withholding payment include, but are not limited to, the following: (1) you didn’t the services; (2) you didn’t deliver the goods; (3) the goods or services that he purchased from you were faulty, not as you promised, or otherwise unsatisfactory; or (4) you overcharged him.9


  1. Lab. Code §207. 

  2. Civ. Code §1719(a)(1). 

  3. Civ. Code §1719(a)(4), (5). 

  4. Civ. Code §1719(a)(2). 

  5. Id

  6. Civ. Code §1719(a)(3), (b). 

  7. Civ. Code §1719(d), (e). 

  8. Civ. Code §1719(b). 

  9. Id

Ben Rothman, Esq.

Ben Rothman is a Los Angeles-based attorney practicing in the areas of personal injury, employment, and workers' compensation on a "no recovery, no fee" basis. Call him at (424) 465-2948 for a free, no-obligation consultation.