Pay Stub Violations in California and Your Wage Statement

If you’re like many Americans, you work hard to provide for yourself and perhaps your family.  When you work for a reputable employer, you come to expect that your paycheck will arrive on time and without issue. Many of us pay our bills, and if our expected salary arrives every pay period, we may go weeks, months, or years without looking at our pay stubs because we’ve come to trust that things are correct.

Mistakes Happen

But sometimes, as Carter Law Firm observes, even reputable employers make mistakes when it comes to your paycheck.  You might notice if you don’t receive as much money as you’re expecting. But how closely are you looking at the other information on your pay stub?

Every two weeks, attached to a paycheck or a direct deposit receipt, California employees are supposed to receive what’s called an “itemized pay stub.”  It’s also acceptable if the pay stub isn’t delivered as a hard copy, but is accessible online.

California Law

California law is generally protective of the state’s workers and is particularly so when it comes to paystubs.  The reason that the law sees paystubs as being so important is that they allow the employee to see exactly what they are being compensated for.  Accordingly, the central legal test to determining whether or not a paystub complies with the law is whether the employee — with minimal effort — can determine precisely what they are being paid, and for what labor.

For this reason, paystubs must list the hours worked by the employee during the pay period, at each hourly rate.  So, if you worked 40 hours of “straight time” (8 hours per day, 5 days per week) and one hour of overtime per day, the paystub would need to list the dates of the pay period, 40 hours, the base hourly rate, and, separately, 1 hour, and the overtime rate (1.5 times the base rate).  If the paystub lumped all of these hours into one category or didn’t list the number of hours worked, or didn’t list the pay rate for each category of hours, there would be what we lawyers call a “paystub violation.”  There are also technical items a paystub needs to include, like the name and address of the employer, and the employee’s ID number or the last 4 digits of his or her social security number.

While most employers get it right on these basics, they make mistakes or take shortcuts when it comes to tricky situations.

Magadia v. Wal-Mart

One such tricky situation occurred in the recent case of Magadia v. Wal-Mart, where the court delivered a verdict against Wal-Mart for the whopping sum of $102 million.  Wal-Mart gave its employees bonuses per its incentive plan.  When employees worked overtime, the law required it to adjust their hourly rates upward because they received these bonuses.  Wal-Mart did that, but the trouble was that it didn’t explain exactly what it was doing on the paystubs — merely putting down payments for “MyShare INCT” and “Overtime INCT.”  Because the employees couldn’t reasonably be expected to understand what those codes stood for or what they were being paid extra for, there were paystub violations galore.

Share Your Story

If you believe you might be experiencing a similar situation with your paystubs, Carter Law Firm wants to know. We can analyze your paystub for free to see if there is a claim worth pursuing.  Attorney Roger Carter, based in Newport Beach, has been consistently rated as a Top 100 Trial Lawyer and Top Settlements Labor and Employment Law attorneys.