Employers Must Heed Pay Stub Technicalities

California employers must accurately list specific wage-related information on each worker’s pay stub per pay period, including but not limited to the company’s name and address, total hours worked, wage rate(s), gross and net wages earned, all deductions, and inclusive dates of the pay period.

Seemingly, the easiest requirement should be listing the employer’s name and address (Labor Code 226 (a)(8)). However, to mangle Shakespeare, that which we call an employer by any other name might not be as lawful.

In Savea v. YRC Inc., the plaintiff, on behalf of himself and all co-workers, sued this employer for failing to provide the correct company name on its wage statements (pay stubs). Instead of listing its corporate name, YRC Inc., the company listed its fictitious business name, YRC Freight. The plaintiff also alleged the employer’s address improperly omitted its mail stop code and its extended four-digit zip code (the ZIP+4 code). Plaintiff sought statutory damages, civil penalties, attorney fees, and costs.

In a rare victory for employers, the court sided with YRC. The court emphasized that the legislature enacted Labor Code 226 to ensure an employer properly documents “the basis of the employee compensation payments” to help the employee ascertain whether he or she has been paid properly. As YRC had a valid, properly recorded fictitious business name statement, the court decided there was no confusion about the employer’s identity. The court also concluded that YRC’s proper mailing address does not need to include either the mail stop code or ZIP+4 Code.

This decision serves as an important reminder for California employers as failure to properly adhere to any pay stub requirements can be costly. For any offense within 12 months of the filing of a claim, each affected worker can recover at least $50 for the first violation and a minimum $100 for each subsequent occurrence up to a maximum of $4,000. If a company’s non-compliance applies to a large number of employees, that total potential liability could be very significant. See Labor Code 226(e).

Best practices:

• Preferably list the employer’s name as registered with the California Secretary of State on all pay stubs.
• If the employer operates under a fictitious business name (FBN), ensure the FBN is properly renewed prior to its expiration.
• Correctly and fully state the corporate name and/or FBN on all pay stubs without abbreviating or shortening them.
• Do not print the company logo on the pay stub in lieu of the actual corporate name or FBN name.
• Routinely audit the company’s pay stubs to ensure compliance with all required items, preferably in consultation with experienced legal counsel.

See also:

• Correct Pay Stubs Save Bucks (May, 2018)
• California’s Itemized Pay Stub (March, 2016)

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

Cindy Bamforth

May 17, 2019

Employers Must Heed Pay Stub Technicalities