Under California employment law, an employer is required to provide specific information on an employee’s pay stub or wage statement. This includes
- hours worked,
- deductions, and
- pay rate.
If an employer leaves out certain information or includes incorrect information, they may be in violation of California labor laws and subject to a statutory penalty.
In this article, our California labor and employment law attorneys will address the following key issues:
- 1. Pay Stub Violations
- 2. What Goes On Pay Stubs
- 3. “Total Hours Worked”
- 4. Incorrect Pay Stubs
- 5. Remedies
- 6. Corrections
- Additional Resources
If you have further questions after reading this article, we invite you to contact us at Shouse Law Group.
1. Pay Stub Violations
Employers in California are required to provide employees with an itemized wage statement, also known as a pay stub. Pay period regulations require employers to provide pay stubs semi-monthly or at the time of each payday.1
Pay stubs are required even if an employee is given a wage payment in cash. However, most employers provide a wage statement that is a detachable part of the employee’s
- paycheck or
- direct deposit statement.2
Pay stubs are required to include certain information about the
- employee,
- employer,
- rate of pay, and
- other information.
If a wage statement does not include this information, no pay stub is provided, or the pay stub information is incorrect, the employer may be in violation of California labor laws.3
If an employer willfully fails to provide a wage statement or the employer fails to provide an accurate and complete wage statement, the employee may be able to seek damages from the employer for each wage statement violation.4
“Exempt employees” are employees who are exempt from California’s wage and hour laws. However, in order to qualify as an exempt employee, an employee must meet specific duties requirements and earn a minimum salary equivalent to twice the state minimum wage based on a 40-hour workweek.3
Some non-exempt employees may also be paid a salary. Salaried non-exempt employees cannot be paid less than the state minimum wage. Salaried non-exempt employees are also protected by California wage and hour laws–including overtime laws and laws requiring meal and rest breaks.4
2. What Goes On Pay Stubs
The information required to be provided in a pay stub or wage statement includes the following:
- Gross wages earned
- Total hours worked, including overtime hours
- All deductions (all deductions made on written orders of the employee may be aggregated and shown as one item)
- Net wages earned
- The inclusive dates of the period for which the employee is paid
- The name of the employee
- The last four digits of the employee’s social security number (or employee identification number other than a social security number)
- The name and address of the legal entity that is the employer
- All applicable hourly rates in effect during the pay period, and the corresponding number of hours worked at each hourly rate by the employee5
If the employee is paid on a piece-rate basis, the wage statement is required to show the number of piece-rate units earned and any applicable piece rate.6
If the employer is a temporary service employer, the rate of pay and total hours worked must be included for each temporary service assignment.7
3. “Total Hours Worked”
For most employees, a pay stub or wage statement must include the “total hours worked by the employee.” If an employee’s pay stub does not include total hours worked, the employer may be in violation of California wage statement laws.8
However, employees who are exempt from overtime and minimum wage laws may be exempt from the requirement that their pay stubs show “total hours worked.” This includes the following workers:
- Employed in an executive capacity
- Employed in an administrative capacity
- Employed in a professional capacity
- Outside salespersons
- Salaried computer software professionals
- Employees in a live-in alternative to incarceration rehab facility
- Commercial fishing crew 9
The largest group of exempt employees are generally known as “white-collar” workers, or those employed in administrative, managerial, executive, or professional capacities.10
In order to qualify as an exempt executive, administrative, or professional employee in California, the employee must meet the following tests:
- Be primarily engaged in executive, administrative or professional duties (generally, this requires the employee dedicate about 50% or more of his or her work time to these duties);
- Regularly and customarily exercise discretion and independent judgment on the job; and
- Earn a salary equivalent to at least twice the state minimum wage for full-time work (based on a 40-hour workweek).11
If an employee meets the test for an exempt employee, they may be exempt from certain wage and hour laws, including the requirement that a pay stub indicates total hours worked.
California law requires pay stubs to contain certain information.
4. Incorrect Pay Stubs
If an employer has incorrect information on the wage statement or the required information is missing, the employer may be in violation of California labor laws.12
California labor statutes give employees a cause of action against their employers for pay stub violations, providing for
- penalties,
- attorney’s fees, and
- court costs.
However, the law also allows employers to correct some errors to avoid penalties.13
5. Remedies
An employee who suffers an injury as a result of an employer’s intentional failure to comply with California pay stub laws is entitled to recover damages through filing a lawsuit against the employer.14
An employee is eligible for damages for the purposes of pay stub violation penalties if the employer:
- Fails to provide a wage statement; or
- Fails to provide accurate and complete wage statement information.15
In many cases, when an employer is violating California pay stub laws against one employee, they are violating labor laws against a number of employees. This may lead to a class action lawsuit involving multiple violations against employees.
The employee must be able to promptly and easily determine the necessary information from the statement alone. This means that a reasonable person would be able to readily ascertain the information without referring to other documents or information.16
This information includes:
- Amount of gross wages or net wages
- Which deductions the employer made from gross wages to determine net wages
- Name of the employer
- Address of the employer
- Name and address of the legal entity that secured the services of the employer if the employer is a farm labor contractor
- Name of the employee
- Last 4 digits of the employee’s social security number or employee identification number17
Civil penalties from a pay stub violation amount to $50 for the initial pay period and $100 per employee for each violation in a subsequent pay period. The maximum award available to an employee is $4,000.18
In addition to the pay stub violation penalties, an employee is also eligible to recover
- the court costs of bringing the lawsuit and
- reasonable attorney’s fees.19
An employee can also sue their employer for injunctive relief. This means that the employee can force the employer to follow California pay stub requirements, in addition to seeking damages.20
6. Corrections
An employer can correct some pay stub violations without incurring penalties. A bill signed into law by Governor Brown gives employers a 33-day window to
- fix certain name and address violations and
- avoid the statutory penalties.21
This ability to fix pay stub violations is limited to errors in:
- The inclusive dates of the period for which the employee is paid; and
- the name and address of the legal entity that is the employer.
An employee who seeks damages for a pay stub violation files a claim under the Private Attorneys General Act (PAGA).22
Once the employer is notified of the PAGA claim, the employer then has 33 calendar days to fix the error and avoid the statutory penalties. In order to “cure” the mistakes, the employer has to provide a fully compliant itemized wage statement for each pay period prior to the notice, going back three years.23
Additional Resources
For more information, refer to the following:
- Industrial Welfare Commission Wage Orders – Compilation of labor laws by the California Department of Industrial Relations.
- Exempt and Nonexempt Employees – Explanation of the two classifications of workers by the California Chamber of Commerce.
- California Paycheck Calculator For Salary & Hourly Payment – Free online tool from Forbes.
- California Tax Service Center – Information about income taxes (and other types of taxes) in the state.
- 8 ways to stretch your paycheck further – Tips from Bankrate.com.
Legal References:
- Labor Code section 226 LC –
(a) An employer, semimonthly or at the time of each payment of wages, shall furnish to their employee, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately if wages are paid by personal check or cash, an accurate itemized statement in writing showing (1) gross wages earned, (2) total hours worked by the employee, except as provided in subdivision (j), (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 their 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, if the employer is a farm labor contractor, as defined in subdivision (b) of Section 1682, the name and address of the legal entity that secured the services of 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. The deductions made from payment of wages shall be recorded in ink or other indelible form, properly dated, showing the month, day, and year, and a copy of the statement and the record of the deductions shall be kept on file by the employer for at least three years at the place of employment or at a central location within the State of California. For purposes of this subdivision, “copy” includes a duplicate of the itemized statement provided to an employee or a computer-generated record that accurately shows all of the information required by this subdivision.
(b) An employer that is required by this code or any regulation adopted pursuant to this code to keep the information required by subdivision (a) shall afford current and former employees the right to inspect or receive a copy of records pertaining to their employment, upon reasonable request to the employer. The employer may take reasonable steps to ensure the identity of a current or former employee. If the employer provides copies of the records, the actual cost of reproduction may be charged to the current or former employee.
(c) An employer who receives a written or oral request to inspect or receive a copy of records pursuant to subdivision (b) pertaining to a current or former employee shall comply with the request as soon as practicable, but no later than 21 calendar days from the date of the request. A violation of this subdivision is an infraction. Impossibility of performance, not caused by or a result of a violation of law, shall be an affirmative defense for an employer in any action alleging a violation of this subdivision. An employer may designate the person to whom a request under this subdivision will be made.
(d) This section does not apply to any employer of a person employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant.
(e) (1) An employee suffering injury as a result of a knowing and intentional failure by an employer to comply with subdivision (a) is entitled to recover the greater of all actual damages or fifty dollars ($50) for the initial pay period in which a violation occurs and one hundred dollars ($100) per employee for each violation in a subsequent pay period, not to exceed an aggregate penalty of four thousand dollars ($4,000), and is entitled to an award of costs and reasonable attorney’s fees.
(2) (A) An employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide a wage statement.
(B) An employee is deemed to suffer injury for purposes of this subdivision if the employer fails to provide accurate and complete information as required by any one or more of items (1) to (9), inclusive, of subdivision (a) and the employee cannot promptly and easily determine from the wage statement alone one or more of the following:
(i) The amount of the gross wages or net wages paid to the employee during the pay period or any of the other information required to be provided on the itemized wage statement pursuant to items (2) to (4), inclusive, (6), and (9) of subdivision (a).
(ii) Which deductions the employer made from gross wages to determine the net wages paid to the employee during the pay period. Nothing in this subdivision alters the ability of the employer to aggregate deductions consistent with the requirements of item (4) of subdivision (a).
(iii) The name and address of the employer and, if the employer is a farm labor contractor, as defined in subdivision (b) of Section 1682, the name and address of the legal entity that secured the services of the employer during the pay period.
(iv) The name of the employee and only the last four digits of their social security number or an employee identification number other than a social security number.
(C) For purposes of this paragraph, “promptly and easily determine” means a reasonable person would be able to readily ascertain the information without reference to other documents or information.
(3) For purposes of this subdivision, a “knowing and intentional failure” does not include an isolated and unintentional payroll error due to a clerical or inadvertent mistake. In reviewing for compliance with this section, the factfinder may consider as a relevant factor whether the employer, prior to an alleged violation, has adopted and is in compliance with a set of policies, procedures, and practices that fully comply with this section.
(f) A failure by an employer to permit a current or former employee to inspect or receive a copy of records within the time set forth in subdivision (c) entitles the current or former employee or the Labor Commissioner to recover a seven-hundred-fifty-dollar ($750) penalty from the employer.
(g) The listing by an employer of the name and address of the legal entity that secured the services of the employer in the itemized statement required by subdivision (a) shall not create any liability on the part of that legal entity.
(h) An employee may also bring an action for injunctive relief to ensure compliance with this section, and is entitled to an award of costs and reasonable attorney’s fees.
(i) This section does not apply to the state, to any city, county, city and county, district, or to any other governmental entity, except that if the state or a city, county, city and county, district, or other governmental entity furnishes its employees with a check, draft, or voucher paying the employee’s wages, the state or a city, county, city and county, district, or other governmental entity shall use no more than the last four digits of the employee’s social security number or shall use an employee identification number other than the social security number on the itemized statement provided with the check, draft, or voucher.
(j) An itemized wage statement furnished by an employer pursuant to subdivision (a) shall not be required to show total hours worked by the employee if any of the following apply:
(1) The employee’s compensation is solely based on salary and the employee is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission.
(2) The employee is exempt from the payment of minimum wage and overtime under any of the following:
(A) The exemption for persons employed in an executive, administrative, or professional capacity provided in any applicable order of the Industrial Welfare Commission.
(B) The exemption for outside salespersons provided in any applicable order of the Industrial Welfare Commission.
(C) The overtime exemption for computer software professionals paid on a salaried basis provided in Section 515.5.
(D) The exemption for individuals who are the parent, spouse, child, or legally adopted child of the employer provided in any applicable order of the Industrial Welfare Commission.
(E) The exemption for participants, director, and staff of a live-in alternative to an incarceration rehabilitation program with special focus on substance abusers provided in Section 8002 of the Penal Code.
(F) The exemption for any crew member employed on a commercial passenger fishing boat licensed pursuant to Article 5 (commencing with Section 7920) of Chapter 1 of Part 3 of Division 6 of the Fish and Game Code provided in any applicable order of the Industrial Welfare Commission.
(G) The exemption for any individual participating in a national service program provided in any applicable order of the Industrial Welfare Commission.
(H) The exemption for any person who has entered into a contract to play baseball at the minor league level who satisfies the requirements set forth in subdivision (a) of Section 514.5.
- Labor Code 226 LC. See also Camp v. Home Depot U.S.A., Inc. (2022) 84 Cal. App. 5th 638.
- Labor Code 226 LC.
- Labor Code 226 LC.
- Labor Code 226(a) LC.
- Labor Code 226(a) LC.
- Labor Code 226(a) LC.
- Labor Code 226(a)(2) LC.
- Labor Code 226 LC.
- 8 California Code of Regulations (“C.C.R.”) 11040(1)(A).
- Labor Code 515 LC.
- Labor Code 226(a) LC. See, for example, Naranjo v. Spectrum Security Services, Inc. (Cal. App. 2d Dist. 2023) 88 Cal. App. 5th 937 (“Accordingly, we conclude substantial evidence supports the trial court’s finding that Spectrum’s defenses were presented in good faith, and were not unreasonable or unsupported by the evidence. The trial court, therefore, properly denied waiting time penalties under section 203 based on its finding that Spectrum did not “willfully” fail to pay timely wages.”).
- Labor Code 226 LC.
- Same.
- Labor Code 226 LC.
- Labor Code 226 LC.
- Labor Code 226(e)(2) LC.
- Labor Code 226(e)(1) LC.
- Same.
- Labor Code 226 LC.
- Labor Code 2699 LC.
- Labor Code 2699.3 LC.
- California Labor Code 2699.3 LC.