Employee Wage Statements-Are You in Compliance?
A recently published California case, Morgan v. United Retail Inc., illustrates just how ridiculous the wage and hour litigation front in California has gotten. In this case, the plaintiff brought a putative class action against her employer alleging the employer’s pay stubs failed to comply with California Labor Code section 226 because the stubs did not have a separate line listing the employee’s total hours worked. Instead, the stubs separately listed the total regular hours and the total overtime hours, but did not also provide the sum total of those two numbers on a separate line. The plaintiff succeeded in getting a class certified but then lost the war when the court granted the employer’s motion for summary judgment. In finding for the employer, the court held that the employer’s pay stubs satisfied the requirements of Labor Code section 226 by listing the total regular hours and the total overtime hours. The fact that the stubs did not separately list the sum total of these hours was insufficient to establish a violation of section 226.
Let’s be clear regarding section 226 of the California Labor Code. Every employer has to provide either a detachable part of the paycheck, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing showing:
1. gross wages earned,
2. total hours worked (not for exempt/salaried employees),
3. the number of piece rate units earned if the employee is paid by piece rate,
4. all deductions
5. net wages earned,
6. the inclusive dates of the period for which the employee is paid,
7. the name of the employee and the last four of their social security number (or an identification number),
8. the name and address of the legal entity (employer) and,
9. all applicable hourly rates and the corresponding number of hours worked
Please make sure you are in compliance. We have had several Labor Board claims regarding wage statments. It’s a waste of money for not meeting these simple requirements.