[This guest post was provided by Douglas J. Farmer, Attorney, Ogletree Deakins, P.C., San Francisco. He can be contacted at doug.farmer@ogletreedeakins.com]
California Labor Code Section 226(a) requires employers to include nine (9) categories of information in wage statements given to employees. The rules apply whether the wage statement is distributed electronically or in hard copy. Failure to meet the precise requirements of Section 226 can result in penalties of $50 per employee per pay period for an initial violation, and $100 for each subsequent violation, up to a total of $4000 per employee.
Payroll services like ADP and Paychex take no responsibility for ensuring that your wage statements are legally compliant in California. If you have gotten it wrong on one wage statement, chances are that all of your wage statements (for all employees) are also in violation.
California businesses can protect themselves against these risks by checking their employee wage statements against the checklist of the nine required categories below.
The following categories of information must be precisely identified on each employee wage statement:
California Labor Code section 246(h), California’s paid sick leave law, requires employers to show a paid sick leave or PTO balance on their wage statements (or other writing furnished to the employee at the time wages are paid). Employers paying employees in whole or in part by way of a “piece-rate” must also comply with the wage statement requirements of Labor Code section 226.2.
Additional Resources
For additional information on California wage statements requirements, see, D. Farmer, California Employment Law: The Complete Survival Guide to Doing Business in California, available for purchase at www.EmploymentLawPublishers.com.
As a business owner, or HR or payroll manager, you are responsible for payroll compliance and knowing CA labor law where it applies to your business. Fortunately,you have a number of options for your payroll functions. Software that can be installed in-house, or cloud-based programs offer a good alternative.
But if you really want to take full advantage of the benefits available to you, outsourcing to a provider like Accuchex can still be the best decision.
If you are currently looking to invest in outsourcing, download our free resource, the Payroll Outsourcing Guide, to help you make an informed decision. Or call Accuchex Payroll Management Services at 877-422-2824.