Human Resources Management for Startup and Growing Companies

Common mistakes failing to provide the correct full legal name of the employer, Not providing the employer’s address, not listing the beginning and the end of the pay period, not providing the total hours worked, regular and overtime.  The penalty for failure to follow California Labor Code 226, failure carries a civil penalty of $50 for the first violation and $100 per pay period for each subsequent violation up to a total of $4,000 per employee. The reason pay stub violations are big business are class action lawsuits Plaintiff’s Attorney chase because all paystubs will be wrong not just one or two employees.

Pursuant to of Labor Code §226:

“Every employer shall provide a paystub to employees with each paycheck. Employers need to get them right. The new piece-rate rules just increase the chances your paystub is not correct:

https://www.dir.ca.gov/dlse/PayStub.pdf

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 overtime under Labor Code Section 515(a), or any applicable order of the Industrial Welfare Commission,
3. All deductions provided that all deductions made on written orders of the employee may be aggregated and shown as one item,
4. Net wages earned,
5. The inclusive dates of the period for which the employee is paid,
6. The name of the employee and the last four digits of his or her social security number, or an employee identification number other than a social security number,
7. The name and address of the legal entity that is the employer,
8. All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee;
9. The amount of accrued paid sick leave; AND
10. If applicable, the number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis.

In addition to getting the right data on the pay stub, they open the door to overtime violations and missed meal periods or meal periods not provided in compliance with the wage order. This can become problematic for any employer who misclassifies an employee as exempt from FSLA because the exempt paystub does not track hours or meal periods.

Employers need to audit their payroll practices and ensure their paystubs have all the information required.