What efforts must be made by an employer to locate former employees? What is meant by “due diligence”?

Labor Code section 226.2 does not define what constitutes “due diligence,” other than to state that it includes, but is not limited to “the use of people locator services.” (See Labor Code section 226.2, subdivision (d)(1).) There are a variety of people locator services available on the Internet through which someone may search a name in an attempt to locate a current address. Many of these services offer a one-month pass, for a small fee, that allows for an unlimited number of searches. Given the statute’s reference to the use of people locator services, “due diligence” on an employer’s part likely would require use of one of these services for at least one search per employee for whom the employer does not have a current address.

Beyond this specific requirement, what constitutes “due diligence” would depend on the circumstances. In general, the concept of due diligence incorporates elements of both reasonableness (what is reasonable under the circumstances?) and good faith (was a genuine effort made?). As such, relevant factors would include the size of the payment being made to an employee and the nature and extent of the information the employer has about that employee. For example, if the employer does not have current contact information for a former employee, but continues to employ the former employee’s brother, “due diligence” might require the employer to ask the brother if he has a current mailing address for the former employee. If, on the other hand, the employer does not have a current address for a former employee, a people locator search is unsuccessful because the former employee has a very common name, and the employer has no other direct information about how to locate that person, then the employer may have done its “due diligence” as to that particular employee.

Another way to approach this question is to put oneself in the shoes of someone who has left the area but is now owed some money by a former employer – what efforts would you reasonably expect that employer to make to find you and make sure you get paid?

Free legal advice. Call now: 800-484-4610

Nakase|Wade law firm represents companies, businesses, and employers – exclusively.

We invite your attention to our disclaimer.