Lawsuit Prevention for Employers

The failure of employers to properly include all information required by law on itemized wage statements forms the single most-common basis for class-action lawsuits in California.

Every employer must provide an accurate itemized statement in writing, either semimonthly, or at the time of each payment of wages, with the following items of information:

1. Gross wages earned;
2. Total hours worked by the employee, unless the employee is salaried/exempt;
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, including those requested in writing by the employee;
5. Net wages earned;
6. Inclusive dates of the period for which the employee is paid;
7. Employee’s name and last four digits of their 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.

Deductions made from the payment of wages must be recorded in ink or other indelible form, and dated, showing the month, day and year, and a copy of the statement or a record of the deductions must be kept on file by the employer for at least three years at the place of employment.

Effective January 1, 2016, Labor Code, section 226.2 requires an itemized statement be provided to employees compensated on a piece-rate basis to also separately state the total hours of compensable rest and recovery periods, the rate of compensation, and the gross wages paid for those periods during the pay period, and the total hours of other nonproductive time, as specified, the rate of compensation and the gross wages paid for that time during the pay period.

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Jay G. Putnam is a Petaluma labor lawyer who has specialized in representing California employers for over three decades. His practice is devoted to preventing lawsuits against his clients, without sacrificing workplace authority or management prerogatives.

While no one can guarantee a future free of lawsuits, Putnam has compiled a remarkable record of success: Not one employer-client has been sued in 36 years with his system of precautions in place.

For those clients who have arrived with pending lawsuits, Putnam has established an excellent track record of success as well. 

You are invited to visit Mr. Putnam’s website, where you will find in-depth discussion of the most common mistakes made by California employers, and how to avoid them. www.jaygputnam.com/articles-by-jay-g-putnam/