Now is a good time to check your wage statements to see if they are in strict compliance with federal and state law.
By Riley Walter and Paul Bauer, attorneys
We had the opportunity to speak to an audience of elite dairy producers at Dairy Today’s Elite Producer Business Conference held in Las Vegas in early November. Our topic dealt with how to avoid getting tagged with penalties or fines for wage and hour violations.
One of the things that we discussed was the increasing reporting by major media about so called “wage theft.” This is a term that is being applied to industries where there is a pattern of shorting employees on their paychecks and/or where there is a failure by the employer to strictly comply with wage and hour rules.
One of the wage and hour rules that is being used by plaintiff lawyers regards inaccurate, incomplete or inadequate wage statements.
Although the federal wage and hour laws are for the most part silent on what is required on itemized wage statements, California certainly goes above and beyond most states to require itemized wage statements contain the following information:
- Gross wages earned;
- Total hours worked by the employee, except for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime under California Labor Code section 515(a) or any applicable order of the IWC;
- The number of piece rate units earned and any applicable piece rate if the employee is paid on a piece rate basis;
- All deductions, provided that all deductions made on written orders on 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 and only the last four digits of his/her social security number or employee identification number;
- The name and address of the legal entity that is the employer and, if the employer is a farm laborer contractor as defined in California Labor Code section 1682(b), the name and address of the legal entity that secured the services of the employer; 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 and if the employer is a temporary services employer as defined in California Labor Code section 201.3, the rate of pay and the total hours worked for temporary services assignment.
At the conference, a recurring question was whether the wage statements used by QuickBooks and other accounting programs are adequate. Because there can be several variations and versions, anyone using such an application would be wise to double-check their wage statements against the statute.
Using this one item as an example, (if, for example, your wage statement fails to address any one of the nine required pieces of information) you could be susceptible to huge penalties. An employer that violates this itemized wage statement requirement potentially faces penalties in the amount of $50 for the first pay period in which a violation occurs, and $100 per employee for each violation in any subsequent pay period, not to exceed an aggregate penalty of $4,000.
Employees who use attorneys to assist them in recovering penalties under this section are entitled to an award of costs and reasonable attorney’s fees. California Labor Code section 226 further explains that an employee is deemed to suffer injuries for purposes of this subdivision if the employer fails to provide a wage statement. Alternatively, 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 the above items 1 to 9, inclusive, and the employee cannot promptly and easily determine from the wage statement alone one or more of the those nine items.
Plaintiffs’ lawyers usually bundle together six or seven of the violations and they can be “stacked” under some circumstances.
The point is that now is a good time to check your wage statements to see if they are in strict compliance with federal and state law. It is better that you fix things now than fix them after you’ve been challenged by the regulator or a group of employees.
Riley Walter and Paul J. Bauer are attorneys with the Central Valley-based Walter & Wilhelm Law Group, a law firm specializing in agribusiness, reorganization and bankruptcy. Contact them at 559-435-9800 or [email protected] or [email protected].