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Riverside County Employment Lawyers > Blog > Employment Lawyer For Employers > How Failing To Provide Proper Wage Statements Can Prove Costly To Your California Business

How Failing To Provide Proper Wage Statements Can Prove Costly To Your California Business


If you run a California business with nonexempt employees–i.e., workers who are subject to minimum wage and overtime laws–you need to keep detailed time records of any and all hours worked and applicable pay rates. Each employee must receive a wage statement (pay stub) explaining for each pay period, explaining how that employee’s pay was calculated.

At a minimum, this wage statement must contain the range of dates covered, total hours worked, hourly rates, gross pay, deductions, and net pay. There must also be sufficient information on it to identify both the employer and employee. An employer who fails to maintain proper wage statements can be sued and ordered to pay civil damages–including legal costs–to an affected employee.

Restaurant Ordered to Pay Damages, Legal Fees to Workers

Lawsuits on wage statement issues happen more often than you might think. Just recently, for instance, the California Second District Court of Appeals upheld a Superior Court judgment against an employer who did not provide proper wage statements. The case, Lopez-Lopez v. BBS National Inc.  involved restaurant workers who alleged they were illegally “paid a flat weekly rate rather than an hourly wage with overtime pay.”

The case was tried before a Superior Court judge sitting without a jury. The judge heard evidence that the employer provided pay stubs twice a month that showed “almost no variation in the amount of the payments to each plaintiff.” More to the point, the pay stubs did not specify what hourly rate the worker was paid, and only showed the total amount paid.

The employee-plaintiffs told the judge that the employer did not keep any time records. The employer did submit handwritten “time records” to the court, but the judge ultimately determined they were not credible. This lack of proper record-keeping also masked the fact that employees did not receive state-mandated meal and rest breaks, the plaintiffs testified.

Given the absence of proper wage statements or time cards, the judge found the employer violated numerous California labor laws. The judge awarded damages and penalties against the employer of approximately $124,000 to the three plaintiffs plus their legal fees.

On appeal, the employer claimed the judge’s ruling was not supported by “substantial evidence.” The Second District disagreed. It held the trial court acted within its discretion as the trier of fact in crediting the testimony of the plaintiffs and discounting the handwritten time cards presented by the defendant. The appellate court therefore upheld both the judgment for the plaintiffs’ damages and penalties and the award of attorney’s fees.

Contact California Employment Law Attorney Karen J. Sloat Today

Some employers fail to meet their wage statement obligations, not out of malice but rather out of ignorance. But we are long past the days when you can pay employees “under the table” and not keep proper records. If you are doing business in California, you need to be aware of these rules and ensure your managers and staff are always in compliance.

If you need legal advice in this area from an experienced Riverside County and Coachella Valley employment lawyer for employers, contact the Law Office of Karen J. Sloat, APCtoday.



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