Employment law: rules regarding pay stubs
Attorney Joe Richardson with Legal Learning about the requirements surrounding pay stubs
The pay stub is the most visual indication of the employee’s job situation and a clear indicator of employer errors
A payslip, pay stub, paystub, pay advice, or sometimes paycheck stub, is a document an employee receives either as a notice that the direct deposit transaction has gone through, or is attached to the paycheck. It is important for employers and employees to understand the requirements surrounding pay stubs. When followed, these rules allow employees to always know where they stand and are a clear indication of the employer’s compliance with the law.
Under California Labor Code Section 226, there are certain facts that must be shown on an employee’s pay stub:
- Gross wages earned;
- Total hours worked by the employee (unless exempt);
- The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece-rate basis;
- All deductions, provided that all deductions made on written orders of the employee may be aggregated and shown as one item;
- Net wages earned;
- Dates of the period for which the employee is paid
- The employee name and ONLY the last four digits of the employee’s social security number OR an employee identification number;
- The name and address of the employer legal entity, and if the employer is a farm labor contractor as defined in subdivision (b) of Section 1682, the name and address of the legal entity that secured the services of the employer;
- All applicable hourly rates in effect during the pay period and the corresponding number of hours worked at each hourly rate by the employee.
Penalties for violations
If an employer fails to include any of these categories or does so inaccurately penalties may include but not be limited to $50 for the first pay stub violation, and $100 per violation after the first, up to $4,000 per employee.
Because it is the most visual indication of the employee’s job situation, the pay stub can also be a clear (and expensive) indication of employer errors. For instance, if the employee was believed to be exempt but later found to be non-exempt, each of the pay stubs are violations because hours were not listed. If the pay stub has all 9 social security numbers (instead of just the last 4 digits), it is a violation.
If an employer has made a mistake as to any of these categories and has done it for every employee, every pay stub can be a violation requiring the payment of both compensation and penalties.