CALIFORNIA’S ITEMIZED PAY STUB REQUIREMENTS
Ignoring the Needed Details Poses Trap for Unwary Employers
California employers must of course comply with all laws applicable to payment of minimum wage and overtime.See, for example: Be Prepared for Statewide and Local Minimum Wage Increases and Working Overtime in California.
Businesses are also required to accurately specifywage-related information on each pay stub for each worker in each pay period. Up until July 1, 2015, California required nine possible items. Since that time, the requirements have expanded to up to 16 items in some cases.
A. The First Nine Required Pay Stub Items: As we reported in "Pay" By The Rules: California Pay Stub Requirements, the first nine items are:(1) Gross wages earned; (2) Total hours worked (except salaried exempt employees); (3) Piece rate units and rate, if applicable; (4) All deductions, including taxes, disability insurance, and health and welfare payments (deductions ordered by the employee may be aggregated and shown as one item); (5) Net wages earned; (6) The inclusive dates of the pay period; (7) The name of the employee along with his or her social security number (last four digits only) or an employee identification number; (8) The name and address of the legal employing entity; and (9) All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
B. Required Listing of Employee's Paid Sick Days Benefit:As we reported in California Paid Sick Leave Law, most employers in this state have also been required since July, 2015 to include:(10) Written notice of the amount of available paid sick leave on the employee's pay stub or a separate writing provided with the employee's payment of wages.
Under revised Labor Code 246(h),an employer who provides unlimited sick leave to its employees (no maximum cap) may now meet this notice requirement by indicating "unlimited" [sick leave] on the employee's itemized wage statement or in a separate writing provided on each designated pay date.
Further Required Paystub Listing of Rest and Recovery Pay for Certain Employers:As we recently reported in Piece Work Compensation Is a Wreck Waiting to Happen, employers utilizing any form of so-called piece work (production-based) compensation system have been further obligated since January 1, 2016 to pay affected workers additionally for rest and recovery time. Under new Labor Code 226.2(a)(2)(A), such employers are now required specifically to list three additional items on each pay stub: (11) Total hours of compensable rest and recovery periods in the applicable pay period; (12) Rate of compensation for such periods; and (13) Gross wages paid for such rest and recovery periods during that pay period.
Under Labor Code 226.2(a)(2)(B),and unless a piece work-paying employer includes an hourly minimum wage base rate in its compensation system, that employer will also have to list yet three more items on each pay stub for affected workers:(14) Total hours of other compensable nonproductive time in the applicable pay period; (15) Rate of compensation for such time; and (16) Gross wages paid for that time during the pay period.
Company attention to such detail is important.Labor Code 226(e) provides that an employer's knowing and intentional failure to comply may entitle each worker affected to recover at least $50 for the first violation and a minimum $100 for each subsequent occurrence up to a maximum of $4,000. In the event a company's non-compliance applies long-term to a large number of employees, the total potential liability could be very significant.
This state's Labor Commissionerhas for many years listed a template pay stub illustrating the placement of the above nine items. See: http://www.dir.ca.gov/dlse/PayStub.pdf. However, the state has yet to offer what it considers acceptable examples of pay stubs containing additional items (10) through (16) above. This lack of government guidance makes it all the more important that affected employers consult with legal counsel to determine how best to bring their pay stub formats into compliance with the above-described new requirements.
For further assistance, please contactTim Bowles, Cindy Bamforth or Helena Kobrin.
Additional resources provided by the author
- Be Prepared for Statewide and Local Minimum Wage Increases
- Working Overtime in California.
- Pay” By The Rules: California Pay Stub Requirements,
- California Paid Sick Leave Law,
- Labor Code 246(h)
- Piece Work Compensation Is a Wreck Waiting to Happen
- Labor Code 226.2(a)(2)(A)
- Labor Code 226.2(a)(2)(B)
- Labor Code 226(e)
- Tim Bowles