From SMWB ALERT, Sweeney, Mason, Wilson & Bosomworth
SMWB first sent this Alert! in 2015. Since then, class action lawsuits, based in part on violations of California Labor Code Section 226, have become commonplace. Section 226 mandates that employers provide their employees with, as a detachable part of the employee’s paycheck, an itemized statement containing several categories of specific information. These class action lawsuits seek penalties on behalf of all employees who receive non-compliant wage statements. Section 226 was amended in 2013 to provide for hefty penalties – even where the employee cannot prove any actual damages.
Compliant wage statements must set forth accurate and complete information, including but not limited to:
1. Gross wages earned;
2. All deductions;
3. Net wages;
4. Total hours worked by the employee (unless exempt);
5. The inclusive dates of the period for which the employee is being paid;
6. The name of the employee and either the last four digits of the employee’s social security number or an alternative employee identification number;
7. The name and address of the legal entity that is the employer; and
8. All applicable hourly rates in effect during the pay period.
Many employers include only the pay period end date and fail to include their correct legal name and their full address. These mistakes can result in significant liability for employers. If you issued noncompliant check stubs to ten (10) employees each week for one year, the penalty is at least $40,000.00. For one hundred (100) employees, the penalty balloons to $400,000.00. As these penalties can be significant, we urge you to check your wage statements to ensure they are in compliance with Section 226.
Act now!
SWEENEY, MASON, WILSON & BOSOMWORTH is a Professional Law Corporation located at 983 University Avenue, Suite 104C, Los Gatos, California, 95032, (408) 356-3000. This notice is designed to assist our clients and other business owners in spotting issues which may result in costly litigation and court awarded damages if allowed to continue unaddressed.