Under California law, employers must provide their employees with wage statements that contain nine specific categories of information. See Cal. Labor Code § 226(a)(1)-(9). Plaintiffs in California wage and hour actions regularly and routinely have included section 226 claims with other wage allegations, claiming non-compliance by employers. And until January 1, 2013, employers have, in some circumstances, defended against section 226 claims and escaped monetary liability by arguing that employees must show some sort of injury resulting from any technical violation under the express language of section 226. The new law responds to several conflicting court opinions on the definition of “injury” by defining “suffering injury” to recover damages for wage statement violations under section 226. Specifically, an employee suffers injury if:
- the employer fails to provide a wage statement; or
the employer fails to provide accurate and complete information as required by any one or more items listed in section 226(a)(1)-(9) and the employee cannot “promptly and easily” determine one or more of the following “from the wage statement alone” (i.e., without reference to other documents or information):
- the amount of gross wages or net wages paid during the pay period;
- the total number of hours worked (if the employee is not salaried);
- the number of piece-rate units earned and applicable piece rate (if the employee is paid on a piece-rate basis);
- deductions made;
- inclusive dates of the pay period;
- all applicable hourly rates in effect during that pay period and the corresponding number of hours worked at each hourly rate;
- the name and address of the employer (as well as certain additional information if the employer is a farm labor contractor as defined in section 1682); or
- the name of the employee and either the last four digits of his or her social security number or an employee identification number other than the social security number.
The amendments did not change the existing penalties for a violation under section 226: the greater of all actual damages, or $50 for the initial pay period and $100 for each violation in a subsequent pay period, up to a $4,000 maximum.
These amendments make now a good time for private sector employees to confirm that the wage statements accompanying employee paychecks (regardless of whether such paychecks are issued directly by an employer or by a service) are in compliance with the requirements of Labor Code section 226, as amended.