Rare Wage Statement Win For California Employers

Although the draconian state law on wage statements often makes it feel like the deck is stacked against the business community, a California Court of Appeals recently provided a rare win for employers when it comes to what information must be provided on the statements. The Court upheld a trial court decision that found the employer did not violate Labor Code Section 226 by using its fictitious business name as the “employer name” on its wage statements, or by providing an employer address that did not contain a mail stop code or ZIP+4 code. 

The Dispute: How Much Precision Is Required?

Labor Code Section 226 requires California employers to provide an itemized wage statement that includes:

1. Gross wages earned;
2. Total hours worked;
3. Certain information for employees paid on a piece-rate basis;
4. All deductions;
5. Net wages earned;
6. Pay period;
7. Employee’s name and identifying information;
8. Name and address of the legal entity that is the employer; and
9. All applicable hourly rates.

At issue was item number 8. Vaiula Savea, an employee of transportation company YRC Inc., alleged that the company failed to provide the correct employer name on its wage statements because it used its fictitious business name, “YRC Freight,” instead of the entity name registered with the Secretary of State, “YRC Inc.” The wage statements also listed the employer address as 10990 Roe Avenue, Overland Park, KS 66211. However, Savea contended that the “complete address” should be 10990 Roe Ave, MS A515, Overland Park, KS 66211-1213 (italics added).

The Finding: Hypertechnical Compliance Not Required

The court found that there was no violation of Section 226 because “YRC Freight” was the company’s actual, recorded fictitious business name in California at the time it issued the wages statements at issue. It was recorded in San Bernadino and Sacramento Counties, and it was the name the company used to transact all regular business in California. Most importantly, the court found that there was no confusion as to who the employer was. The court found that because YRC Inc. and YRC Freight are the same legal entity, the wage statements in question did not violate Section 226.

Similarly, the court found that Section 226 merely requires that the employer provides its “address,” which YRC did. The employee provided no authority to support his position that a mail stop code or ZIP+4 Code was required. Thus, the court concluded that the YRC fully complied with the law for purposes of providing its name and address in its wage statements.

Takeaway: Nice Win For Employers, But Beware

The court’s decision offers a small respite for employers when it comes to litigation over wage statements. However, the facts in each case are always different, thus it is always prudent to review your wage statements to ensure compliance with the elements of Section 226, as other courts may not be as forgiving as this court depending on the wage statement at issue.

For more information, contact the author at ALau@fisherphillips.com or 415.490.9023.