PaycheckTo the surprise of one California employer, a class action labor and employment attorney demanded one million dollars upon alleging that their pay stubs failed to include the required information- calculated at $4,000 for all 250 employees. While the facts in that case made the alleged violation debatable and worth far less than the plaintiffs’ lawyer requested, the potential for serious liability in other situations is very real.

California employers need to be aware that they are required to provide itemized statements every time an employee is paid, whether by check, in cash, or otherwise. Under Labor Code Section 226(a), every time employees are paid, the employer must provide a detachable part of the check or a separate writing showing required information.

The following information is required to be on the itemized statement:

  • Gross wages earned.
  • Total hours worked.
  • The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis.
  • All deductions.
  • 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 other than a social security number.
  • The name and address of 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.
Pay Stub For Piece Rate Employees
Source: California Department of Labor (DOL).

The penalty for failure to provide the appropriate information on a pay stub can be fairly expensive for employers with a significant number of employees. An employer’s failure to comply with Labor Code Section 226 may be subject to a penalty equal to $50.00 for the first violation and $100.00 for each subsequent violation–up to $4,000.00 per employee. Therefore, all employers should review their current pay stubs to insure that all required information is provided.