©2023 Seyfarth Shaw LLP www.seyfarth.com 2023 Cal-Peculiarities | 375 In the same case, the Ninth Circuit rejected the employee’s additional argument that Walmart violated the wage statement law by not including the “dates of the period for which the employee is paid” on his Statement of Final Pay, which the employee received along with his final paycheck when he was terminated in the middle of a pay period.45 The Ninth Circuit noted that so long as an employer furnishes a wage statement on or before the semimonthly deadline, it complies with the law. Here, while Walmart did not include the dates of the period for which the employee was paid on the Statement of Final Pay, Walmart provided the final wage statement at the end of the next pay period, which was sufficient. 16.3.5 PAGA pile-on penalties. An employee aggrieved by an inadequate wage statement is not limited to the statutory penalties provided for in section 226. The employee can also pile on by invoking PAGA,46 to seek additional civil penalties.47 PAGA plaintiffs seeking civil penalties for a section 226 violation need not show that a wage-statement violation was “knowing and intentional” or that it caused any employee any injury. Rather, PAGA plaintiffs need only show that the employer failed to provide an accurate or itemized statement that contained each item of information called for by Labor Code section 226(a).48 And it gets even worse. While PAGA default penalties are more than steep enough ($100 per aggrieved employee per pay period for the initial violation and $200 per aggrieved employee per pay period for each further violation), Labor Code section 226.3 is even more draconian. Section 226.3 provides wage-statement penalties of $250 per employee per violation “in an initial citation” and $1,000 per employee “for each violation in a subsequent citation.” A 2011 Court of Appeal held that under section 226.3 an employer’s misunderstanding of the law is not “inadvertent” and thus cannot shield the employer from the imposition of penalties.49 But does section 226.3 apply when the wage statement is merely defective as opposed to missing altogether? Section 226.3 by its terms applies when “the employer fails to provide the employee a wage deduction statement or fails to keep the records required” by section 226(a)—not when the employer merely provides a wage statement that is somehow inadequate. Yet the Court of Appeal in Raines v. Coastal Pacific Food Distributors, an under-analyzed 2018 opinion, endorsed a PAGA plaintiff’s proposal to rely on section 226.3’s higher schedule of penalties. Raines acknowledged that “[s]ome courts have read Section 226.3 to limit civil penalties to only those instances where the employer failed to provide any wage statement or to keep records,” yet found “more persuasive a decision that found Section 226.3 sets out a civil penalty for all violations of Section 226.”50 And what did Raines find persuasive? A breezy conclusion that if only the PAGA default penalties were applied then somehow “the purpose of the statute would be thwarted.”51 In 2021, however, a little adult supervision arrived on the scene. The Court of Appeal, in Gunther v. Alaska Airlines,52 rejected the Raines conclusion that section 226.3 applies to a merely defective wage statement. Gunther holds that a PAGA claim for such a wage statement invokes the default $100/$200 civil penalties found in PAGA instead of the higher penalties called for by section 226.3. The trial judge in Gunther, citing Raines, had imposed $25 million in PAGA penalties for wage statements that lacked some of the information called for by section 226(a). Reversing this result, Gunther looked to the “plain meaning” of the statutory language to conclude that section 226.3’s “heightened penalties … apply only where the employer either fails to provide a wage statement or fails to keep required records as required” by section 226(a). Accordingly, the defendant’s incomplete wage statements would trigger only PAGA’s default penalties. 16.3.6 Electronic wage statements The DLSE has advised that even though the statute refers to the wage statement as a “detachable part of the check,” employers can meet wage itemization requirements by giving employees access to electronic wage
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