Happy Friday!  This Friday’s Five provides five legal requests and/or notices that, if ignored, can create huge liability for a California employer.

1. Requests for personnel records and time records

There are many different Labor Code provisions that obligate the employer to provide current and former employees with a copy of their personnel files and/or payroll records.  For example, Labor Code section 432 permits employees to obtain a copy of any document they signed, Labor Code section 1198.5 allows current and former employees to obtain copies of their personnel records, and Labor Code section 226(c) permits employees to inspect or copy payroll records within 21 days after making a request to do so.

2. PAGA notice

Employees seeking recovery under the Private Attorneys General Act (PAGA) must comply with requirements that place the Labor and Workforce Development Agency and the employer on notice that the employee will be seeking remedies under the Act and give the Agency a chance to investigate.  If the Agency does not investigate, then the plaintiff can proceed with the claim.  Employers have the the ability to cure some issues set forth in the plaintiff’s letter to the LWDA, which could bar the plaintiff from obtaining any penalties.  Plus, the PAGA notice usually results in litigation being filed shortly after receiving the notice, so employers should begin discussing defense strategies as soon as it receives a PAGA notice.

3. Labor commissioner or DOL investigation notice

Under the Federal Labor Standards Act (FLSA), the Department of Labor (DOL) has certain permissions to investigate and gather date about wages, hours worked, and other working conditions at workplaces. The FLSA also provides the DOL limited permission to enter employers’ premises, review records, and even potentially question employees about employment practices.  Under California law, the Labor Commissioner has subpoena power and the ability to review records and workplaces in order to enforce California employment laws.  Upon receiving a request from any public agency, such as the DOL or the California Labor Commissioner, an employer should immediately review what obligations and rights it has in responding to the request.

4. Subpoenas from third parties

Employers may receive subpoenas from third parties seeking employment records.  The “custodian of records” is responsible for responding to the requests and producing employment records in certain circumstances.  California law requires that a request for a personnel file include a “Notice to Consumer” notifying the employee that such records are being sought, and providing the individual an opportunity to object to the disclosure of the information.  If the employee or former employee has not been notified, or objects to the production of the requested records, the employer should not produce the information requested unless and until a court orders otherwise, or the affected employee agrees to the production.  If the subpoena seeks the disclosure of confidential or proprietary information, the employer should contact an attorney to see if the company has an obligation to move to quash the subpoena or seek an appropriate protective order to preserve the confidentiality of the information sought.

Employers should not produce requested documents without being satisfied that the proper subpoena procedures and notice requirements, if applicable, have been met.  Employers have a duty to maintain the privacy rights of current and former employees, which includes personnel files.

5. Service of a Complaint

Ultimately, once a lawsuit is initiated, Plaintiffs will serve the complaint on the registered agent of the company.  Generally speaking, defendants have 30 days to respond to a complaint once served.  It is important to immediately begin assessing the company’s rights and obligations once a complaint has been served in order to ensure its rights are protected.  If a company does not timely respond to a lawsuit, entry of default judgment could be entered against the company, which could result in providing the plaintiff a judgment in the full amount of damages sought.

Employers across the nation have been preparing to increase salary levels for managers to meet the higher salary level requirements implemented by the Department of Labor earlier this year under the Fair Labor Standards Act (FLSA).  The DOL rules were set to take effect on December 1, 2016, and require that employers must pay employees that qualify to be exempt executive, administrative or professionals (referred to as the “EAP” exemption) a minimum salary level of at least $921 per week or $47,892 annually.  21 states filed a lawsuit to prevent the DOL’s rule to take effect, arguing that in raising the minimum salary level, the DOL exceeded its delegated authority from Congress.  While not issuing a final ruling, the court determined that the plaintiff states have shown a likelihood of success on the merits justifying the preliminary injunction.  The merits of the case and a final determination will be made at a later date.

Therefore, the court issued an injunction preventing the DOL’s overtime rules from taking effect on December 1, 2016.  An issue addressed by the court was whether the injunction applied only to the 21 states involved in this case, or to all states.  The court’s opinion is unambiguous that the scope of the injunction applies to all states and all employers:

A nationwide injunction is proper in this case.  The Final Rule is applicable to all states.  Consequently, the scope of the alleged irreparable injury extends nationwide.  A nationwide injunction protects both employees and employers from being subject to different EAP exemptions based on location.

Now employers that started the process of raising salary levels for managers in order to comply with the DOL’s overtime rules must make a decision to continue with the raises or hold back on any implementation until there is further guidance from the courts.  It is also likely that President-elect Trump’s administration will not look favorably on the DOL’s overtime rules.  This adds further uncertainty about whether the increase in the salary level will ever go into effect once President-elect Trump takes office.

The opinion in State of Nevada, et al v. United States Department of Labor, can be read here.

Employers also need to remember that the minimum salary requirement is only one part of the exemption test, and California employers need to ensure that they are still complying with California’s requirements.

The DOL’s change in the federal overtime rules requiring a higher salary threshold ($47,476 paid annually) for employees to qualify as an exempt employee takes effect December 1, 2016.  This Friday’s Five discusses five final checklist items California employers should consider when reclassifying from exempt employees to nonexempt employees.

1. The DOL rule changes are still going into effect December 1, 2016.

This week, a few people asked me if the DOL changes are still going into effect since Donald Trump was elected as president.  Mr. Trump is unable to change the DOL’s rule that requires exempt employees be paid $47,476 in an annual salary until he is inaugurated as president.  Therefore, employers still must comply with this deadline.

2. Notice to Employee may be required.

Section 2810.5 of the California Labor Code requires employers provide notice to employees of their rate(s) of pay, designated pay day, the employer’s intent to claim allowances (meal or lodging allowances) as part of the minimum wage, and the basis of wage payment (whether paying by hour, shift, day, week, piece, etc.), including any applicable rates for overtime.

The law requires that the notice is provided to employees at the time of hiring or within 7 days of a change if the change is not listed on the employee’s pay stub for the following pay period. The notice must be provided in the language the employer normally uses to communicate.

Employers should carefully review the need to provide the notice to employee given any reclassification of employees from exempt to a nonexempt employee.  A template Notice to Employee can be downloaded from the DIR’s website here.

3. Consider how the change will be communicated and documented with employees.

Employers should explain to employees who are being reclassified from exempt to nonexempt about how they will be paid.  The notice should inform workers they will be paid overtime for work over 8 hours in a day and over 40 hours in a week.  The communication should also explain any changes in bonuses (don’t forget that nondiscretionary bonuses must be figured into the employee’s regular rate of pay for overtime purposes) and benefits.  Finally, the communications should set out the different duties the employee may be required to perform given the change in classification.

4. Meal and rest breaks.

In addition to communicating the change in pay to employees, the company should also distribute its meal and rest break policy.  The company should distribute any meal and rest break forms to the employees who are being converted to nonexempt that are normally given to new hires.

5. Off the clock and timekeeping policies.

Finally, employers need to implement compliant timekeeping policies to ensure that all nonexempt employees clock in and out for all work time.  In addition, California requires that employers record when nonexempt take their meal breaks, and any reclassified employees must understand this requirement.  Employers need to be careful about allowing employees who are reclassified as nonexempt to continue to use a company cell phone or laptop, as now any work performed once they leave the office must be compensated.  Employers should consider limiting nonexempt employees’ access to company cell phones, e-mail, and computers to avoid off the clock claims.

Any reclassification and audit regarding the proper classification of employees should be done with caution, as there are many different issues to consider that are outside of the scope of this article.

What a week – and here we are at Friday already.  This Friday’s Five focuses on how President Trump could change the employment landscape on the federal and California levels.

1.      Department of Labor’s overtime regulations effective December 1, 2016 are still on course to take effect, but could be changed in 2017.

As I’ve written about previously, the DOL has issued changes to the federal rules raising the salary required for employees to qualify as exempt employees.  The DOL raised the salary required to $47,476 annually for a full time worker, and this change is effective December 1, 2016.  Mr. Trump will obviously be unable to roll back this increase until he is inaugurated as president.  However, there have been discussions that congress and some legal actions could prevent this requirement from taking effect, but prudent employers should continue to proceed to comply with the new requirement on December 1, 2016.  It is likely that this regulation will be carefully reviewed by President Trump, but any changes he potentially could make would likely not be effective until mid or late 2017.

2.      Immigration and E-verify issues.

During the campaign, Trump stated that he would mandate employers use the E-verify program to check on applicants’ right to work within the United States.  The system is available for employers to use currently, but Federal law does not require employers to use the system, and some states require its use.  However, employers in California are not currently required to use E-verify.

3.      Minimum wage.

During the campaign, Mr. Trump supported the idea of raising the federal minimum wage from $7.25 per hour to $10 per hour.  In July of 2016, Mr. Trump made statements that he supported this increase, and also supported the idea that states could set a higher minimum wage.  Of course, given California’s current minimum wage is set at $10 per hour, an increase on the federal level will probably not impact California employers, as California’s minimum wage is increasing to $10.50 per hour on January 1, 2017, $11 per hour on January 1, 2018, and then $1 per year thereafter until it reaches $15 per hour in January 2022.  These increased are delayed by one year for employers with 25 or fewer employees.

4.      Paid maternity leave.

Mr. Trump’s website proposes that he would support a law providing 6 weeks of paid leave to new mothers before returning to work.  Currently, under the FMLA, employers with 50 or more employees are required to provide up to 12 workweeks of unpaid, job-protected leave for the birth of a child and care for a newborn.

5.      Implementation of more local laws expected. 

As we have seen here in California, local cities and counties have taken the minimum wage and paid sick leave issues into their own hands and require employers to comply with more restrictive laws than those passed on the state or federal level.  Just in Southern California for example, there are many different minimum wage and paid sick leave laws that employers need to be aware of and comply with.  This local legislation makes it hard for businesses that have more than one location, as the laws require different policies, notices, pay requirements, and tracking obligations for each location.

Interested in learning more about employment law updates facing California employers?  My firm is hosting a webinar on December 13, 2016, discussing the new laws employers must comply with in 2017 and an update on the litigation front.  Click here to register.

This Friday’s Five is a bit of everything: news, new California employment laws, and reminders about October 1 deadlines for the City of San Diego:

 1. House moves to delay DOL overtime rule implementation.

There is a great article by Lisa Jennings from Nation’s Restaurant News summarizing the House’s move to delay the overtime rule implementation, which is set to go into place on December 1, 2016.  The White House has already threatened to veto the bill if it makes it to the President’s desk.  For more information about the DOL overtime rules, visit my posts here.

2.  San Diego employers need to ensure they are in compliance with the October 1, 2016 deadline.

The City of San Diego’s new paid sick leave law (and its “implementing ordinance”) requires employers to provide written notice to employees about the paid sick leave law by October 1, 2016 (yes – that is tomorrow).  The Implementing Ordinance requires that every employer must also provide each employee at the time of hire, or by October 1, 2016, whichever is later, written notice of the employer’s legal name and any fictitious business names, address, and telephone number and the employer’s requirements under the law.  The notice must also include information on how the employer satisfies the requirements of the law, including the employer’s method of earned sick leave accrual.  The notice must be provided to employees in English and in each employee’s primary language, if it is a language if it is spoken by at least five percent of the employees at the employer’s workplace.  Employers may provide this notice through an accessible electronic communication in lieu of a paper notice.  The City published a form notice to comply with these requirements, which can be downloaded here.

3.  Governor signs law making it illegal for out-of-state employers to have their disputes heard outside of California.

Governor Brown signed S.B 1241 into law that restricts employers from requiring employees who primarily reside and work in California to adjudicate claims outside of California when the claim arose in California, or deprive employees of California law with respect of claims arising in California.

Employers should carefully review their arbitration agreements with California employees to ensure that the agreement does not have a choice of law provision that applies another state’s law to the agreement or require any claims be adjudicated outside of California.  The effective date for the law is January 1, 2017.

4.  New CA law prohibits employers from asking about juvenile convictions.

A.B. 1843, signed into the law by Governor Brown on September 27, 2016 prohibits employers from asking or taking into consideration juvenile convictions.  The law states, “employers [are prohibited] from asking an applicant for employment to disclose, or from utilizing as a factor in determining any condition of employment, information concerning or related to an arrest, detention, processing, diversion, supervision, adjudication, or court disposition that occurred while the person was subject to the process and jurisdiction of juvenile court law.”

5. NCAA and Pac-12 sued by former USC football player for unpaid wages.

An interesting class action lawsuit was filed by a former USC football player claiming that the NCAA and Pac-12 violated the Fair Labor Standards Act and California law by not paying football players minimum wage or overtime.  This is a different twist to the often debated issue of whether college athletes should be allowed to accept endorsement money.  It will be interesting to see how the lawsuit develops: on one side there is an argument that as the college sports programs have turned into huge profit generating centers sports, not academics could be seen as the primary focus for these athletes, but on the other hand the players are still students and many school programs do not generate huge revenues for the schools.

The DOL’s Final Rule was issued this week (see my previous article for the details), and we have had a few days to digest the new rules.  Now employers need to start putting together a plan to ensure compliance with the federal rules, and take time to ensure they are also complying with applicable California law.  This Friday’s Five is five suggestions to start the process:

1. Understand that the DOL’s changes apply to the FLSA, not California law.

At risk of sounding like a lawyer, the analysis to determine if an employee is properly classified as an exempt employee is very detailed and complex.  California’s requirements differ from the Federal requirements in many ways.  Therefore, it is imperative that California employers understand which laws apply to their employees, and that they are following the correct laws.  The set of rules that provides the employee with more rights and protections is usually the law that governs.  For example, to qualify as an exempt employee under California law, the employee must be paid the equivalent of two times the state minimum wage for full-time employment.  As of January 1, 2016, with the state minimum wage at $10 per hour, the annual salary must be at least $41,600 to qualify for the California white collar exemptions.  This is less than the annual salary of $47,476 or $913 per week as set by the DOL in the Final Rule.  Therefore, in order to avoid paying overtime for work over 40 hours in a week, California employers will need to pay at the higher salary required by federal law by the December 1, 2016 deadline.

2. Understand which law – federal or California – applies to your workforce.

Again, this analysis is complex and needs to be done carefully with competent legal counsel.  Generally, the law that gives employees the most protections or benefits must be followed.  The FLSA had a much lower salary basis test in the past, so California employers generally had to comply with California law regarding exempt status because it set a higher salary basis (the equivalent of two times the state minimum wage for full-time employment, which equals $41,600 annually, or $3,466.67 per month based on $10 per hour) and a stricter duties test than federal law.  Now, California employers will likely need to focus on compliance with the higher salary required under Final Rule, which becomes effective December 1, 2016, but still must also likely comply with California’s stricter duties test.  This is territory where advice from an employment lawyer particular to the client’s situation is critical.

3. Take time to evaluate workforce and reclassify employees if needed.

Employers should use the DOL’s Final Rule changes as an opportunity to audit their workforce to determine if employee classifications need to be reclassified prior to the December 1, 2016 implementation date of the Final Rule.  While the DOL changed the salary level required to qualify as exempt, employers cannot forget to ensure that exempt employee must also meet the requirements of the duties test, which generally requires employees to perform high level managerial duties for a substantial portion of their worktime.  As mentioned above, California applies a different, stricter duties test on employers, and because this provides more protection to the employee, California employers usually have to meet the California duties test.

It would also be an ideal time when the DOL’s regulations take effect to reclassify employees as nonexempt without raising the question of why the reclassification is taking place.

4. Update timekeeping systems and policies.

The increase in the salary basis test will likely result in many employers reclassifying employees as nonexempt.  Therefore, with more employees needing to clock-in an out for their start and stop times (in addition to tracking the start and stop times for meal breaks as required under California law), employers need to ensure their timekeeping system is up-to-date and compatible with their workforce.

5. Enforce a strict policy prohibiting off-the-clock work and implement policies designed to limit the amount of overtime worked to keep costs under control.

With many more employees likely being reclassified as nonexempt, it is even more critical that employers ensure they take all appropriate steps to protect themselves from off-the-clock work claims.  Employers should have an effective timekeeping policy and train their managers about preventing off-the-clock work.  In addition, employers need to develop a policy and train managers on the correct policies to control unauthorized overtime worked.  Managing overtime costs requires effective policies and manager training to ensure all wage and hour laws are complied with.

On May 18, 2016 the Department of Labor issued long awaited changes to the Federal rules setting forth the requirements for employees to qualify as exempt under the white collar exemptions.  Exempt employees are “exempt” from some labor laws governing employees, such as overtime pay.  Exempt employees are designated as such because they are “exempt” from certain wage and hour requirements due to their duties and level of pay (more information about exempt employees can be found here).  Generally speaking, in order to qualify as an exempt employee, the employee must meet (1) a salary basis test and (2) a duties test.  If the employee does not earn a high enough level of pay, or does not perform managerial duties for a certain percentage of their work time, the employee cannot qualify as exempt, and would be entitled to overtime pay and other labor law protections.

The DOL reviewed both the salary basis test and the duties test to “update and modernize the regulations governing the exemption of executive, administrative and professional (‘EAP’) employees” from the minimum wage and overtime pay protections of the Fair Labor Standards Act (“FLSA”).  The DOL’s Final Rule issued on May 18, 2016 makes the following changes to the FLSA requirements necessary for employees to qualify as an exempt executive, administrative, or professional employee:

  1. Exempt professional employees must earn at least $913 per week, or $47,476 annually for a full-year worker.  This is an increase from the $455 per week, or $23,660 annually for a full-year employee that is currently required under federal law.
  2. The higher salary requirement is effective December 1, 2016.
  3. The salary level that must be paid to employees to meet the salary basis test under federal law will increase automatically every three years.  Therefore, the first increase from the amount set forth above will take effect on January 1, 2020.
  4. Employers may count nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the salary requirement.  The nondiscretionary bonuses and incentive payments must be paid on a quarterly or more frequent basis in order to apply.  Examples of nondiscretionary bonuses include bonuses set for meeting production levels, retention bonuses, and commissions based on a fixed formula.  Discretionary bonuses, such as bonuses provided to employees at the employer’s sole discretion and not according to predetermined standards cannot apply towards this 10 percent requirement.  Therefore, tips cannot be including when calculating the amount of salary the employee earns to meet the salary requirement pay.
  5. The Final Rule also allows employers to make “catch-up” payments to employees if they do not receive enough compensation in nondiscretionary bonuses in a given quarter to remain exempt.
  6. There is no change in the standard duties test.
  7. Set the total annual compensation requirement for highly compensated employees (HCE) subject to a minimum duties test to at least $134, 004.  The pay requirements for HCEs are effective as of December 1, 2016, and will also be reviewed and increased automatically every three years.

It is important to note for California employers that these changes apply to the FLSA, not California law.  Therefore, employers need to evaluate which law governs their situation (generally the law that provide more benefits or protections to the employee will apply, but this can be a complicated analysis, so approach with caution).  I’ll write more about how these changes will effect California employers in the coming days, as well as publish some resources for California employers to help navigate these changes.

In 2015 the Department of Labor (DOL) proposed increasing the salary employees must receive in order to be classified as exempt.  The DOL finalized the rules and the changes are pending before the White House’s Office of Management and Budget.  If approved, it is likely that the final rules would take effect late summer or early fall of 2016.  Here are five action items employers should take now in order to comply with the pending DOL regulations:

1.     Understand how California differs from Federal regulations in regards to the exempt status of employees.

It is very dangerous for an employer to read a few legal updates from lawyers and a few articles from the internet and assume that they have a full understanding the requirements and the analysis that goes into properly classifying employees as exempt or non-exempt.  At risk of sounding like a lawyer, it is a very detailed analysis, and California’s requirements differ from the Federal requirements in many ways.  Therefore, it is imperative that employers understand which laws apply to their employees, and that they are following the correct laws.  The set of rules that provides the employee with more rights is usually the law that governs the particular situation.  As an example, California law sets forth requirements specific for an employee to qualify as a computer professional, while Federal law does not have a separate set of rules for this position.

2.     Take time to evaluate workforce and make any reclassifications when new regulations are issued. 

Employers should use the DOL’s change in regulations as an opportunity to audit their workforce to determine if there are some employee classifications that should be changed.  It would be an ideal time when the DOL’s regulations take effect to reclassify employees as nonexempt without raising the question of why is the reclassification taking place.

3.     Update timekeeping system and policies.

If the DOL regulations are implemented as drafted, it would significantly raise the level of pay required to meet the white collar exemption to $50,440 salary per year in 2016.  Currently, California employers must pay the higher amount of twice the state minimum wage for employees to meet one of the white collar exemptions.  As of April 2016, the state minimum wage is $10 per hour, and therefore employers must pay an annual salary of $41,600 for an employee to meet the salary basis test for a white collar exemption.  The increase in the salary level proposed by the DOL will likely result in many employers reclassifying employees as nonexempt.  Therefore, with more employees needing to clock in an out for the start and stop times (in addition to tracking the start and stop times for meal breaks as required under California law), employers need to ensure their timekeeping system is up-to-date and compatible with their workforce.

4.     Ensure the company’s policy prohibiting off the clock work is effective and enforced in addition to policies designed to limit the amount of overtime worked. 

If reclassifying employees as nonexempt as a result of the DOL regulations, employers need to ensure they take steps to protect themselves off-the-clock work claims.  Employers should have an effective timekeeping policy and train their managers about how prevent off-the-clock work.  In addition, employers need to develop and train managers on the correct policies to control unauthorized overtime worked.  Managing overtime costs requires effective policies and training of managers to ensure all wage and hour laws are complied with.

5.     Keep current on when the DOL rules go into place. 

Employers should not analyze employee exemption issues now and delay taking any action until later this summer.  It is likely that the DOL regulations will take effect soon, and employers cannot get caught in not updating and reclassifying employees once the relations are implemented.  Now is the time to start the analysis.  In the unlikely chance that the DOL regulations are not implemented, employers can chalk up the work done as a wage and hour audit to ensure compliance with the current obligations.

Is your company in an industry that is likely to be targeted by the Department of Labor (DOL) for FLSA violations, or by the California Labor Commissioner for California Labor Code violations? A review of the Department of Labor’s Wage and Hour statistics for fiscal year 2014, in connection with California’s Division of Labor Standards Enforcement most recent reporting for 2012-2013, establishes a clear pattern of industries that are targeted for wage and hour violations:

  1. Restaurants
  2. Garment manufactures
  3. Guard services
  4. Car washes
  5. Agriculture

Here is a summary of the DOL’s statistics:

DOL 2014 Statistics

Here is a summary of California’s DLSE’s most recent statistics:

DLSE 2012-13 wages collectedWhile there are some differences between the two agencies’ statistics, restaurants lead both lists. It is also important to note that not every business can fit into these predetermined categories (note that the “other” category in the DLSE’s lists is very large), so there are many other industries affected.

It is also important to note the amount collected from the various industries that the DLSE found was due. According to the DLSE, the worse collection efforts was in the garment industry, with only 2.8% of the wages found to be due were actually collected. The next lowest collection rate per industry was in the car wash industry at only 10% collection rate. It is important to review these collection rates, because it is informative about how the DLSE or DOL will view your particular establishment when investigating potential claims. The lower collection rates are probably due to the result of the employer’s simply going out of business or taking other steps to avoid collections of the penalties and fines, or what I refer to as the bad actor presumption (rightly or wrongly).

Bad actor presumption (rightly or wrongly)
Imagine if you were in charge of collecting the penalties issued by the DLSE or DOL, these collection figures would color your view of employers operating in these industries. Going into the investigation, the government already has a predisposition that certain employers are more likely to have violations, and then when told they must pay fines, the employer likely to still simply refuse to abide by the determination. I’m not making a presumption that these penalties and fines were rightly or wrongly issued, but am only commenting about how these numbers skew the view from the perspective of the governmental agency. The agencies go through the process of making a determination and issue a citation, and then even after the determination has been made and the employer had an opportunity to appeal the agencies’ determination, the employer still refuses to pay the citation. In effect, employers therefore are harming the reputation of every business operating in that industry, and make it more difficult to overcome the predisposition the investigator has about the particular industry.

This illustrates the importance of companies operating in these targeted industries to be especially vigilant about compliance with Federal and California employment laws. An employer can gain a higher level of credibility with the investigator if they can show compliant policies, good record keeping, and proper payment of wages. Next week I will discuss violations most likely to be assessed by the DOL or the DLSE.

The DOL is pushing for regulations to require employers to provide more information about how employee’s paychecks are calculated. This week, the Labor Secretary Hilda Solis said that the Department of Labor is backing a proposal that would require employers to provide more information to employees in order help stop wage and hour violations. Bloomberg reported that the proposal “would require companies to give employees a report explaining how their pay and hours are set and is aimed at ensuring companies compensate workers for overtime.”

Many states already require certain information to be provided to the employees on their paystubs. For example, California Labor Code section 226(a) has specific requirements of the type of information that must be provided on employee wage statements. That section provides:

Every employer shall semimonthly, or at the time of each payment of wages, furnish each of his or her employees either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an itemized statement in writing showing: (1) gross wages earned; (2) total hours worked by each employee whose compensation is based on an hourly wage; (3) all deductions; provided, that all deductions made on written orders of the employee may be aggregated and shown as one item; (4) net wages earned; (5) the inclusive dates of the period for which the employee is paid; (6) the name of the employee and his or her social security number; and (7) the name and address of the legal entity which is the employer.

Many California employers, as well as out-of-state employers, often are unaware of this requirement, which can expose them to substantial penalties, even for minor, technical violations of this section.