Victory for Employers in Wage Case!Fourth Quarter 2010 – Newsletters California Update Employment Law
In a purported class action against United Retail Inc., an employee alleged that her former employer’s wage statements failed to comply with California Labor Code §226(a) because the paystub listed the total number of regular hours and total number of overtime hours worked by employee but did not list the sum of the regular and overtime hours worked in a separate line. The employee alleged that a separate line with a total sum was required by Labor Code §226(a)(2).
Labor Code §226 requires employers to provide employees with accurate itemized wage statements identifying the following:
(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 Labor Code §515(a) or any applicable order of the Industrial Welfare Commission;
(3) 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) Inclusive dates of the period for which the employee is paid;
(7) Name of the employee and the last four digits of his or her Social Security number;
(8) 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.
In July, a California appellate court concluded that the trial court properly dismissed the employee’s claims because the employer’s wage statements complied with the statutory requirements by “showing . . . total hours worked.” The court reasoned, in part, that the plain language of the statute did not specifically require two separate lines and that the paystubs used by the employer provided the employees with the essential information for verifying that they were being paid for all hours worked. The case is Morgan v. United Retail Inc., 186 Cal.App.4th 1136 (June 23, 2010).