The Anatomy of a Compliant California Wage Statement

Many employers are confused when it comes to information California requires on wage statements that accompany the payment of wages to their employees. California has many content requirements for employee wage statements, including new requirements for employees who are
paid based by a piece rate.

Employees paid by piece rates must be separately compensated for rest and recovery periods and, where the employee does not earn at least minimum wage in addition to the piece rate, must be separately paid for non-productive time. The amount of time for these periods, the applicable rates of pay, and gross wages for these periods are required to be noted on the wage statement.

A wage statement is generally a detachable part of the paycheck or a separate writing containing the necessary disclosures. Failure to comply with the disclosure requirements can result in substantial penalties and other damages.

The following information is required to be on itemized statements:

• Gross wages earned;
• Net wages earned;
• Total hours worked (not required for salaried exempt employees);
• All applicable hourly rates in effect during the pay period, and the corresponding number of hours worked at each hourly rate by the employee;
• The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece rate basis;
• New for 2016 employees paid a piece rate:
  • the total number of hours of compensable rest and recovery time, the rate of pay for that time, and gross wages earned for that time; and;
  • the total number of hours of compensable non-productive time, the rate of pay for that time, and gross wages earned for that time (not applicable if the employee is paid at least minimum wage for all hours worked which is in addition to the piece rate).
• The inclusive dates of the period for which the employee is paid;
• 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;
• The name and address of the legal entity that is the employer; and
• The amount of paid sick leave an employee has available. If the employer provides unlimited sick leave the statement must state “unlimited.” If an employer is eligible to use a Paid Time Off program to comply with the paid sick leave law, the amount of PTO
  available must be listed on the wage statement.

Take the time you review the information on the pay stub of your employee paychecks and make sure the disclosures comply with the law.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.