Do They Comply with California Wage Statement Laws?

As the corporate world heads towards paperless offices, more employers may wish to remit pay stubs electronically without running afoul of applicable law.

California Labor Code section 226(a) requires employers to furnish wage statements “in writing” and itemized deductions to be recorded “in ink or other indelible form.” Additionally, any electronic wage statement system must ensure confidentiality of the employee’s personal information.

Thus, employers must proceed with caution when deciding to distribute electronic pay stubs, carefully reviewing the California Labor Commissioner’s opinion letter which enumerates certain safeguards, such as:

1. Allowing the employee to receive paper copies of his or her pay stubs at any time upon request at the employer’s expense.

2. Including all itemized information on the electronic pay stub as required by California law.

3. Making the electronic pay stub available on or before each regularly scheduled pay day.

4. Providing confidential access at all times to a secure website using unique employee identification numbers (PINs).

5. Allowing employees online access over the internet using their own personal and/or company computers with the option to print and/or save their records electronically at no charge.

6. Maintaining electronic records for at least three years. (Best practice is to maintain for four years to comply with employment-related records retention requirements.)

7. Providing former employees with hard copies upon request.

However, Labor Commissioner opinion letters merely interpret the law and courts need not follow such interpretations. Given there is no express law permitting electronic record-keeping, there’s still some degree of risk in doing so and paper statements (with electronic back-up) continue to remain the safer route.

See also:

• Overlooked Paystub Requirements Can Lead to Trouble (February, 2018)
• Payroll Record- Keeping 101 (May, 2016)

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth

February 28, 2018