A wage statement allows an employee to determine whether her employer has correctly compensated her for her labor, or whether she has been short-changed. California Labor Code section 226(a) seeks to ensure that employees receive accurate wage statements by requiring employers to provide timely, itemized wage statements to their employees. In addition to being timely, wage statements generally must include the following nine categories of information:
- gross wages earned;
- total hours worked (with exceptions);
- the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;
- all deductions from pay;
- net wages earned;
- the dates of the pay period;
- the name of the employee and only the last four digits of her social security number or an employee identification number;
- the name and address of the legal entity that is the employer (with additional information required for farm labor contractors); and
- all applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee (with additional information required for temporary service employers).
|California Labor Code sections 226(e) and 226.3 provide|
hefty penalties for wage statement violations.
California has empowered both individuals and the government to bring legal claims for violations of Section 226(a). Because wage statements are critical for determining whether an employee receives fair and adequate pay, California’s statutes provide steep penalties for wage statement violations.
Individuals have a private right of action for statutory damages under Labor Code section 226(e). Under Section 226(e), individuals may seek statutory damages (sometimes called statutory penalties) if they have suffered an “injury” as a result of their employer’s “knowing and intentional” failure to comply with Section 226(a). An employee who proves she was injured by the knowing and intentional acts of her employer may recover the greater of her actual damages or fifty dollars ($50) for the initial pay period and one-hundred dollars ($100) for each subsequent pay period during which a violation occurs, not to exceed an aggregate penalty of four-thousand dollars ($4,000). Cal. Lab. Code § 226(e).
The state may pursue civil penalties under Labor Code section 226.3, and individuals are empowered to sue for these civil penalties as representative plaintiffs on behalf of the government, pursuant to the Private Attorneys General Act of 2004 (PAGA). If the government’s Labor Workforce Development Agency (LWDA) or a PAGA plaintiff proves the employer violated Section 226(a), the Court may award civil penalties in the amount of two-hundred-and-fifty dollars ($250) for the initial pay period and one-thousand dollars ($1,000) for each subsequent pay period during which a violation occurs. Typically, an employer must have some prior notice of its wrongful practice before the higher, subsequent-violation penalty is imposed. See Amaral v. Cintas Corp. No. 2, 163 Cal. App. 4th 1157, 1209 (2008).
In a recent decision from California’s First District Court of Appeal, Lopez v. Friant & Associates, LLC, -- Cal.Rptr.3d --, 2017 WL 4251126 (Cal. Ct. App. Sept. 26, 2017), the Court clarified that a PAGA representative plaintiff seeking civil penalties under Section 226.3 must only prove the violation of the requirements in Section 226(a) in order to succeed in his claims. In Lopez, the plaintiff brought a PAGA-only action seeking civil penalties for his employer’s failure to include the last four digits of employees’ social security or employee identification number on 5,776 itemized wage statements, in violation of Section 226(a)(7). Id. at *2. The trial court granted defendant’s motion for summary judgment, concluding that a PAGA plaintiff must show evidence of not only a violation of section 226(a) but also the employer’s “knowing and intentional” violation. Id. at *3. The PAGA plaintiff appealed arguing that he was not required to show either (1) a “knowing and intentional” violation or (2) “injury” within the meaning of section 226(e) to prevail on his PAGA claim. Id. The Court of Appeal looked to the plain language and legislative history of the statute and PAGA, and concluded that the PAGA plaintiff was correct on both positions. Id. **3-9. This ruling knocks out a major defense tactic for employers seeking to overcome claims of itemized wage statement violations in PAGA actions – namely, the notion that the PAGA plaintiff has failed to meet the proof requirements of Section 226(e) – and affirms the robust remedies available for wage statement violations under PAGA.
Statutory penalties under California Labor Code section 226(e) and civil penalties under section 226.3 for PAGA violations have a one-year statute of limitations.
If you believe your employer is failing to provide you with timely and accurate wage statements, contact Bryan Schwartz Law.