04/27/2022
Wage Statements – A Snapshot of Compliance
An employee’s wage statement often reveals whether his/her employer operates in compliance with California wage and hour laws. Here is why:
Per California labor code, an itemized wage statement must have:
Gross and net wages earned
Total hours worked (not required for salaried exempt employees)
All deductions (deductions made on written orders of the employee may be aggregated and shown as one item)
The inclusive dates of the work period for which the employee is paid
The employee’s name and the last four digits (only) of his or her social security number (or an employee identification number other than a social security number)
The full and correct 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 (including overtime rate) by the employee
If applicable, the number of piece-rate units earned and any applicable piece rate
The California Labor Commissioner's office provides a sample itemized wage statement for nonexempt employees and employees paid a piece rate.
Given these requirements, when reviewing a wage statement of a non-exempt employee, litigators look for the following:
The absence of any of the information above reveals a possible violation of the reporting requirements of Labor Code Section 226. This violation alone may give rise to a Private Attorney General Act (PAGA) claim.
Does the wage statement reflect overtime? If the statement does not include an applicable overtime rate (or reflect any overtime worked), a suspicion is raised that this worker is not being paid for such.
Does the wage statement reveal a mix of hourly wages paid and commission pay or bonus pay? This information raises the issue of whether the overtime pay rate properly includes the commission or bonus pay component.
Does the statement fail to include payroll deductions? This may signal the employee is improperly classified as an independent contractor.
Does the statement include novel deductions from the pay received? Other than standard payroll withholding deductions an employer typically cannot deduct a business cost from an employee’s pay.
Are the working hours reported or wages earned always the same amounts? This indicates that the actual hours an employee works is not being recorded or considered as required by law.
Does the statement reflect accrued vacation and/or sick pay hours? This information is also required to be on the statement or provided to the employee each pay period. A failure to do so may be a violation of the Labor code and/or foster a PAGA claim.
Does your company provide compliant wage statements? Contact Freeland Law APC to ensure you are in compliance.
