Posted on January 19, 2012 by Alison Dearden

Employers are required to provide itemized wage statements to employees, containing specified information, all as set forth in section Labor Code section 226(a)1. The requirement is mandatory and an employer's failure to comply constitutes a statutory violation. A proper itemized wage statement for an hourly employee will contain the following information:

•· Employer's name and address;

•· Employee's name and social security number (last four digits only);

•· Dates of the pay period;

•· Gross wages earned;

•· Employee's hourly rate;

•· Total hours worked;

•· Deductions;

•· Net wages earned.

Section 226(a) violations can lead to expensive litigation and costly penalties for employers. If the violation is "knowing and intentional," employees may obtain the greater of all actual damages or $50 for the initial pay period in which a violation occurs and $100 per employee for each violation in a subsequent pay period, not exceeding $4,000.2 

This means, if an employer has a practice of utilizing improper pay statements or no pay statements at all, and this practice has been going on for some time, he could potentially be required to pay $4,000 to all hourly employees he has employed in the past 4 years. However, whether an employee suffers "injury" from improper pay statements and what constitutes "knowing and intentional," are presently before the California Supreme Court in Brinkley v. Public Storage, Inc., Case No. S168806 (rev.grntd. 1/14/09).

[1] Section 226(a) reads in full as follows: "Every employer shall, semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee's wages, or separately when 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 for any employee whose compensation is solely based on a salary and who is exempt from payment of overtime under subdivision (a) of Section 515 or any applicable order of the Industrial Welfare Commission, (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 his or her social security number, except that by January 1, 2008, only the last four digits of his or her social security number or an employee identification number other than a social security number may be shown on the itemized statement, (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. The deductions made from payments 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 or a 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."

[2] Labor Code section 226(e), (g).