We’ve seen some recent legal activity around the itemized statements (aka “check stubs”) that is concerning and costly to California employers. Employers are being socked with outrageous penalties and legal fees for simple oversights on pay stubs. Today, take time to pull a copy of the pay stub from one of your non-exempt employee’s checks. It’s worth your time to ensure that your itemized statements include all of the information required by the California Labor Code. Do not assume you have all this covered because you outsource your payroll to a professional payroll service. Below is information from the Department of Labor Standards Enforcement based on Labor Code 226.
The following information is required to be on your itemized statement:
- Gross wages earned
- Total hours worked (not required for salaried exempt employees)
- The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece rate basis
- All deductions (all deductions made on written orders of the employee may be aggregated and shown as one item)
- Net wages earned
- The inclusive dates of the period for which the employee is paid
- The name of the employee and the last four digits of his or her social security number or an employee identification number other than a social security number
- The name and address of the legal entity that is the employer
- All applicable hourly rates in effect during the pay period, and the corresponding number of hours worked at each hourly rate by the employee
Click here for an example of an itemized wage statement as required by Labor Code Section 226 for an employee paid an hourly wage. Note: This itemized statement is not applicable to an employee whose compensation is solely based on a salary and who is exempt from payment of overtime under Labor Code Section 515(a) or any applicable Industrial Welfare Commission Order.
Click here for an example of an itemized wage statement (pay stub) as required by Labor Code Section 226 for an employee paid on a piece rate basis.
Labor Code section 226 (e) outlines the penalties for failure to include these items:
An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not exceeding an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.
And while we have you here…. If an employee or former employee requests to see copies of his/her payroll records the employer must furnish those within 21 calendar days. Failure to do so entitles the current or former employee to recover a $750.00 penalty from the employer in a civil action brought before a court of competent jurisdiction.