372 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com for wage-statement purposes and (2) wages earned must be reported on a wage statement regardless of whether they have been paid.23 Amounts that should have been paid. Must wage statements record amounts that should have been, but were not paid? One might no, because the purpose of wage statements is to let employees check the employer’s math as to what has been paid. The Court of Appeal thus once rejected an argument that an employer’s failure to pay overtime premium pay necessarily results in deficient wage statements. The wage statements did correctly record the hours actually worked and the pay actually received. That was good enough. There was no further requirement that the wage statement shows the overtime premium pay that the employees should have been paid. The Court of Appeal reasoned that if failure to pay overtime wages at the appropriate rate generates an injury that justifies penalties for an inadequate wage statement, then there would be an apparently unintentional double recovery.24 This rationale has been upset, however, by the California Supreme Court’s 2022 Naranjo decision, which reasons that wage statements must report any earned wages, regardless of whether they were paid.25 16.3.2 Items the wage statement need not record Statutory exemptions. Wage statements need not show total hours worked by the employee if (1) the employee is a salaried, exempt employee or (2) the employee is exempt from the payment of minimum wage and overtime under any of these exemptions: (a) persons employed in an executive, administrative, or professional capacity, (b) outside salespersons, (c) computer software professionals who are paid on a salaried basis, (d) individuals who are parent, spouse, child, or legally adopted child of the employer, (e) participants, director, and staff of a live-in alternative or incarceration rehabilitation program, (f) any crew member employed on a commercial passenger fishing boat, and (g) any individual participating in a national service program provided in any applicable order of the Industrial Welfare Commission.26 Vacation pay. Wage statements need not record the accrued amount of vacation pay. Although in some contexts vacation pay is a “wage” that vests over time, unused vacation time does not become quantifiable until the employee leaves employment. Thus, vacation pay is not “wages earned” until the termination of employment. Further, since vacation pay is to be paid at the “final rate,” the amount of vacation balance will depend on the particular circumstances surrounding the termination of employment.27 Events applying to prior pay period. The Court of Appeal has rejected claims that wage statements must (1) record events occurring in a prior pay period and (2) deliver wage statements immediately to terminating employees, with the final paycheck.28 As to the first claim, the Court held that a wage statement need not include the hourly rates and hours worked with respect to a bonus yet to be calculated at the end of the month, quarter, or year: “there were no applicable hourly rates in effect during the pay period which defendant was required to include in the wage statement.” As to the second claim, the Court held that final wage statements were timely by being mailed by the day after termination of employment, because section 226 requires only that wage statements be furnished “semimonthly” or “at the time of each payment of wages.” This holding rejected—as a “void underground regulation”—the Labor Commissioner’s more restrictive interpretation of the statute. Social Security Numbers. Originally, wage statements were required to show the employee’s social security number. Upon realizing that this requirement created risks of identity theft, the California Legislature permitted employers to use alternatives to the SSN, such as an employee-identification number or just the last four digits of the SSN. As of 2008, wage statements must use such alternatives and can no longer use entire SSNs.29
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