California Legislature—2015–16 Regular Session

Assembly Bill No. 2405

Introduced by Assembly Member Gatto

February 19, 2016

An act to amend Section 226 of the Labor Code, relating to wages.

LEGISLATIVE COUNSEL’S DIGEST

AB 2405, as introduced, Gatto. Employment: wages: itemized statements.

Existing law requires an employer to provide his or her employee an itemized statement containing specified information at the time the employer pays the employee his or her wages.

This bill would make nonsubstantive changes to that requirement.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 226 of the Labor Code is amended to
read:

226.  

(a)  begin delete Every employer shall, end delete begin insert An employer, end insert semimonthly or
at the time of each payment of wages, begin insert shall end insert furnish begin delete each of end delete begin insert to end insert his
or her begin delete employees end delete begin insert employee end insert , either as a detachable part of the check,
draft, or voucher paying the employee’s wages, or separately begin delete when end delete
begin insert if end insert wages are paid by personal check or cash, an accurate itemized
statement in writing showing (1) gross wages earned, (2) total
hours worked by the employee, begin delete except for any employee whose end delete
begin insert unless the employee’s end insert compensation is solely based on a salary
and begin delete who end delete begin insert the employee end insert is exempt from payment of overtime under
subdivision (a) of Section 515 or any applicable order of the
Industrial Welfare Commission, (3) the number of piece-rate units
earned and any applicable piece rate if the employee is paid on a
piece-rate basis, (4) all deductions, provided that all deductions
made on written orders of the employee may be aggregated and
shown as one item, (5) net wages earned, (6) the inclusive dates
of the period for which the employee is paid, (7) the name of the
employee and only the last four digits of his or her social security
number or an employee identification number other than a social
security number, (8) the name and address of the legal entity that
is the employer 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, and
(9) all applicable hourly rates in effect during the pay period and
the corresponding number of hours worked at each hourly rate by
the employee and, beginning July 1, 2013, if the employer is a
temporary services employer as defined in Section 201.3, the rate
of pay and the total hours worked for each temporary services
assignment. The deductions made from payment of wages shall
be recorded in ink or other indelible form, properly dated, showing
the month, day, and year, and a copy of the statement and the
record of the deductions shall be kept on file by the employer for
at least three years at the place of employment or at a central
location within the State of California. For purposes of this
subdivision, “copy” includes a duplicate of the itemized statement
provided to an employee or a computer-generated record that
accurately shows all of the information required by this subdivision.

(b) An employer that is required by this code or any regulation
adopted pursuant to this code to keep the information required by
subdivision (a) shall afford current and former employees the right
to inspect or copy records pertaining to their employment, upon
reasonable request to the employer. The employer may take
reasonable steps to ensure the identity of a current or former
employee. If the employer provides copies of the records, the actual
cost of reproduction may be charged to the current or former
employee.

(c) An employer who receives a written or oral request to inspect
or copy records pursuant to subdivision (b) pertaining to a current
or former employee shall comply with the request as soon as
practicable, but no later than 21 calendar days from the date of the
request. A violation of this subdivision is an infraction.
Impossibility of performance, not caused by or a result of a
violation of law, shall be an affirmative defense for an employer
in any action alleging a violation of this subdivision. An employer
may designate the person to whom a request under this subdivision
will be made.

(d) This section does not apply to any employer of any person
employed by the owner or occupant of a residential dwelling whose
duties are incidental to the ownership, maintenance, or use of the
dwelling, including the care and supervision of children, or whose
duties are personal and not in the course of the trade, business,
profession, or occupation of the owner or occupant.

(e) (1) An employee suffering injury as a result of a knowing
and intentional failure by an employer to comply with subdivision
(a) is entitled to recover the greater of all actual damages or fifty
dollars ($50) for the initial pay period in which a violation occurs
and one hundred dollars ($100) per employee for each violation
in a subsequent pay period, not to exceed an aggregate penalty of
four thousand dollars ($4,000), and is entitled to an award of costs
and reasonable attorney’s fees.

(2) (A) An employee is deemed to suffer injury for purposes
of this subdivision if the employer fails to provide a wage
statement.

(B) An employee is deemed to suffer injury for purposes of this
subdivision if the employer fails to provide accurate and complete
information as required by any one or more of items (1) to (9),
inclusive, of subdivision (a) and the employee cannot promptly
and easily determine from the wage statement alone one or more
of the following:

(i) The amount of the gross wages or net wages paid to the
employee during the pay period or any of the other information
required to be provided on the itemized wage statement pursuant
to items (2) to (4), inclusive, (6), and (9) of subdivision (a).

(ii) Which deductions the employer made from gross wages to
determine the net wages paid to the employee during the pay
period. Nothing in this subdivision alters the ability of the employer
to aggregate deductions consistent with the requirements of item
(4) of subdivision (a).

(iii) The name and address of the employer 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 during the pay period.

(iv) The name of the employee and only the last four digits of
his or her social security number or an employee identification
number other than a social security number.

(C) For purposes of this paragraph, “promptly and easily
determine” means a reasonable person would be able to readily
ascertain the information without reference to other documents or
information.

(3) For purposes of this subdivision, a “knowing and intentional
failure” does not include an isolated and unintentional payroll error
due to a clerical or inadvertent mistake. In reviewing for
compliance with this section, the factfinder may consider as a
relevant factor whether the employer, prior to an alleged violation,
has adopted and is in compliance with a set of policies, procedures,
and practices that fully comply with this section.

(f) A failure by an employer to permit a current or former
employee to inspect or copy records within the time set forth in
subdivision (c) entitles the current or former employee or the Labor
Commissioner to recover a seven-hundred-fifty-dollar ($750)
penalty from the employer.

(g) The listing by an employer of the name and address of the
legal entity that secured the services of the employer in the itemized
statement required by subdivision (a) shall not create any liability
on the part of that legal entity.

(h) An employee may also bring an action for injunctive relief
to ensure compliance with this section, and is entitled to an award
of costs and reasonable attorney’s fees.

(i) This section does not apply to the state, to any city, county,
city and county, district, or to any other governmental entity, except
that if the state or a city, county, city and county, district, or other
governmental entity furnishes its employees with a check, draft,
or voucher paying the employee’s wages, the state or a city, county,
city and county, district, or other governmental entity shall use no
more than the last four digits of the employee’s social security
number or shall use an employee identification number other than
the social security number on the itemized statement provided with
the check, draft, or voucher.