374 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com Not showing how many hours were worked at each applicable rate. Recording an incomplete employer name (e.g., “Summit” instead of “Summit Logistics, Inc.”). Recording an incomplete employer address. Failing to provide employee ID numbers, or reporting all nine SSN digits instead of just the last four digits. Prominent among the hypertechnical complaints have been those seeking penalties for failing to state the full “name and address of the legal entity that is the employer,” as required by section 226(a)(8). Such lawsuits have occurred when a wage statement for First Transit Transportation, LLC referred to “First Transit,” when a wage statement for Wal-Mart Stores, Inc. referred to “Walmart,” and when a wage statement for Longs Drugs Stores California, Inc. referred to “Longs Drug Stores.”38 In 2019, the Court of Appeal upheld an employer-name claim, even though the employer’s full name appeared on the attached pay check. Stating the full employer name there was insufficient because the requirement is to state the employer name “as a detachable part of the check.”39 Companies have also been sued for failing to state “the inclusive dates of the period for which the employee is paid,” as required by section 226(a)(6), when the wage period stated only the first or last date of the pay period.40 Some common sense occasionally emerges in judicial interpretations of wage-statement requirements. The Court of Appeal has recognized that separately listing the total number of regular hours worked and the total number of overtime hours, without separately summing up the two figures, complies with the requirement of section 226(a)(2) to list “total hours worked.”41 A similar signal victory for common sense occurred in 2019, when the Court of Appeal rejected a claim that a wage statement violated section 226(a)(8) by stating the employer’s registered fictitious business name (YRC Freight) instead of the name registered with the California Secretary of State (YRC Inc.) and by providing only a five-digit zip code (66211) instead of a ZIP+4 Code (66211-1213).42 Hope lives on for employers. In 2021, two decisions rejected wage-statement liability for hyper-technical violations. In one case, the wage statement displayed earnings in two categories: a standard hourly rate and an overtime rate of 0.5 times the regular rate.43 The employee argued that by showing “0.5 times the regular rate of pay rather than 1.5,” the statement “failed to identify the correct rate of pay for overtime wages.” The Court of Appeal rejected the employee’s argument, holding that the wage statement was compliant because it showed “(1) the standard hourly rate determined by contract or other agreement between the employee and the employer and (2) the overtime premium hourly rate, determined by statute, that must be added to the employee’s standard wages to compensate the employee for working overtime.” The Court of Appeal also rejected the employee’s aggressive theory that wage statements must always show overtime at 1.5x the regular rate of pay, explaining that the regular rate may differ from the standard hourly rate if “an employee earns multiple standard hourly rates, or other compensation.” In another case, the Ninth Circuit overturned a $5.8 million PAGA award against Walmart for alleged wage statement deficiencies.44 There, Walmart paid a performance-based bonus at the end of each quarter that was to be factored into the regular rate for overtime. But because the bonus was not determined until the quarter ended, Walmart made “an after-the-fact adjustment to overtime pay,” which calculated “the difference between the employees’ overtime pay rate over the quarter and the employees’ overtime rate” as if the bonus had been paid as part of the base rate of pay. Walmart then reported both the bonus and the adjusted overtime pay as lump sums on wage statements at the quarter end, without including hourly rates of pay or hours worked for the adjusted overtime pay. The Ninth Circuit held that Walmart’s wage statements were compliant because there was no “hourly rate in effect during the pay period” for the overtime adjustment: the “overtime adjustment is no ordinary overtime pay with a corresponding hourly rate. It is a non-discretionary, after-the-fact adjustment to compensation based on the overtime hours worked and the average of overtime rates over a quarter.”
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