Whether you do your own payroll in-house or rely on a payroll provider, it’s good business to review the wage statements (i.e., pay stubs) that your company issues to its employees from time to time. Failure to either provide a pay stub at the time of payment of wages to an employee or failure to include one of the mandatory items on the pay stub can give rise to potentially large damage awards and even potentially larger civil penalties. California Labor Code section 226 provides for damages to an employee at $50 for an initial violation and $100 for each subsequent violation, with a $4,000 maximum cap per employee. Plaintiffs’ attorneys argue that the Private Attorneys General Act (PAGA), pursuant to California Labor Code section 226.3, provides for civil penalties of $250 per employee per violation in an initial citation and $1,000 per employee for each violation in a subsequent citation.
So, here are the nine items required on the pay stub to be provided to your employee at the time of each payment of wages:
(1) gross wages earned,
(2) total hours worked by the employee,
(3) the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis,
(4) all deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item,
(5) net wages earned,
(6) the inclusive dates of the period for which the employee is paid,
(7) the name of the employee and only the last four digits of his or her social security number or an employee identification number other than a social security number,
(8) the name and address of the legal entity that is the employer, 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 and, beginning July 1, 2013, if the employer is a temporary services employer as defined in Section 201.3, the rate of pay and the total hours worked for each temporary services assignment.
Cal. Lab. Code § 226(a).