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MARCH 2005
DETAILED WAGE STATEMENT REQUIRED TO AVOID PENALTIES
In this climate of“sue your boss”, employees are using every opportunity to find a claim to file against their
employers. A popular claim is violation of Labor Code §226 for failure to provide a complete statement of wages
at the time that wages are paid - i.e. a proper paycheck stub. .
At the time wages are paid, employers must provide each employee an itemized statement , in writing, that contains
the following information:
Gross wages earned;
Total hours worked (except salaried exempt employees);
Piece rate units and rate if applicable;
All deductions, including taxes, disability insurance, and health and welfare payments
(deductions ordered by the employee may be aggregated and shown as one item);
Net wages earned;
The inclusive dates of the pay period;
Name of the employee and Social Security number (SSN), except that, by January 1, 2008,
all employees will be required to print no more than the last 4 digits of and employee’s
Social Security number on check stubs or similar documents, or to substitute some other
identifying number;
Name and address of the employer (legal entity);
All applicable hourly rates in effect during the pay period and the corresponding number
of hours worked at each hourly rate by the employee; and
Piece rate units and applicable piece rate, if the employee is paid on a piece rate basis.
Any failure to provide this information entitles each employee to recover all actual damages or up to $50.00 for
the initial pay period in which a violation occurs and $100.00 per employee per pay period for each violation in
a subsequent pay period, up to a total of $4,000.00, plus cost and reasonable attorney’s fees. The attorneys fees
and costs usually far exceed the amount of the “actual damages” or the $4,000.00 cap.
If an employer does not provide the required wage statements to the employee in writing, or fails to keep records
on the above wage information for the required three years, employers can be held liable and subject to civil
penalties of $250.00 per employee per violation for the first violation and $1,000.00 per employee for each
subsequent violation.
If a clerical error is made or an inadvertent mistake is made on an employee’s pay stub, the Labor Commissioner
has discretionary power not to penalize the employer - but only for one instance of an error - any subsequent
“errors” will be difficult to establish as inadvertent.
If Cash is paid for wages earned, employer must keep an indelible record of these payments for at least three years.
Also, remember that employers must make all payroll records and supporting documentation available for
inspection and copying by the employee within 21 days of a request. Failure to meet the request within the time
required will result in a $750.00 fine for which there is no defense. Employers are cautioned to review their payroll
records, their wage statements and confirm that they are in compliance.
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Wage Statement Required March 2005 |
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This information is intended to provide guidance in the area of employment law and is provided as a service of the Firm. While every effort
has been made to ensure the accuracy of the information contained in this bulletin, it is not intended to serve as "legal advice". If additional
information or assistance is needed on any of the topics contained in this informational package or any other matter, please feel free to
contact Cynthia Elkins for further information. All rights reserved. ©2005.
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