Update: California Labor Code Section 226 requires that employees be provided wage statements containing nine specific items of information, including gross wages earned, total hours worked, start and end dates for the pay period and deductions taken. Recently, California employers have faced a new wave of putative class actions as a result of an amendment to the statute made in 2013 making it easier for employees to recover penalties for a violation of Section 226. The amendment added a presumption of injury when an employer fails to supply a wage statement, issues an incomplete wage statement or issues a wage statement lacking sufficient information from which an employee can readily determine the specific information that Section 226 requires.
The amendment created exposure for large companies in particular by assessing penalties of up to $4,000 per employee. Employers can face additional penalties if Section 226-based claims are pursued under California's Labor Code Private Attorneys General Act (PAGA), which "deputizes" aggrieved employees to recover civil penalties for Labor Code violations as a proxy of the state's labor law enforcement agencies.
Impact: Because of the 2013 amendment, companies have an increased exposure to lawsuits and to liability. Employers would be wise to review their wage statements to ensure compliance with the itemization requirements of Section 226.