Amended in Assembly May 29, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 155

Introduced by Assembly Member Alejo

January 22, 2013

An act to amend Section 226 of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL’S DIGEST

AB 155, as amended, Alejo. Employment: payroll records: right to inspect.

Existing law requires an employer to furnish each employee with an accurate itemized statement showing, among other things, the gross and net wages earned, the inclusive dates of the pay period, and all deductions. Existing law requires the employer to keep on file a copy of the statement for at least 3 years at a specified location. Existing law affords current and former employees the right to inspect or copy records pertaining to their employment, upon reasonable request to the employer. begin delete Existing law authorizes the employer end delete begin insert Under existing law, if the employer provides copies of the records, the employer is authorized end insert to charge any begin insert actual end insert costs of reproduction of the employee’s records to the current or former employee.

This bill would require the employee to elect to inspect or copy, or receive a copy of, or any combination thereof, his or her employment records begin insert and would require the employer to comply with that election. The bill would entitle a former employee terminated for workplace violence or harassment only to receive a copy of the records, without any charge by the employer. The bill would define “actual cost of reproduction” to mean only the per page cost to the employer for the physical duplication of the records end insert . The bill would also declare the Legislature’s intent in this regard.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) In 1988, the Legislature passed, and the Governor signed
into law begin insert , end insert Senate Bill 2155 that amended employees’ preexisting
statutory right to inspect their itemized pay records under Section
226 of the Labor Code and extended to them a new right to receive
a copy of these basic pay records upon reasonable request to their
employer.

(b) Senate Bill 2155 was sponsored by California Rural Legal
Assistance, Inc., and was supported by the Alien Legalization
Program for Agriculture (whose membership included the
California Farm Bureau Federation and the Western Growers
Association), the California Labor Federation, and others. There
was no opposition to Senate Bill 2155, which passed by 37 “Aye”
and no “No” votes in the Senate and by 70 “Aye” and 1 “No” votes
in the Assembly.

(c) According to the Senate Committee on Labor and Industrial
Relations March 1988 analysis of Senate Bill 2155, as introduced,
the bill’s proponents contended that Senate Bill 2155 was
“necessary to ensure that workers have the right to obtain copies
of their payroll records, especially in the case of undocumented
workers who are applying for amnesty under the federal
Immigration Reform and Control Act of 1986 (IRCA).”

(d) The Senate Rules Committee’s August 11, 1988, Senate
Floor Analysis (for final passage of the bill as amended in the
Assembly) stated: “This bill would permit current or former
employees to copy payroll deduction records that are maintained
by the employer. ... Employers would be empowered to charge
former and current employees for the actual costs of reproducing
the records.”

(e) The Department of Industrial Relations, in its August 26,
1988, Enrolled Bill Report recommending that the Governor sign
the bill, stated: “This bill would require an employer, who is
mandated by law to keep wage deduction records, to allow
employees to inspect and/or copy such records. [The bill also]
permits employers to charge employees for the actual costs of
reproducing the records.”

(f) The Department of Finance, in its August 29, 1988, Bill
Analysis recommending that the Governor sign the bill, stated:
“[Senate Bill] 2155 gives employees or former employees the right
to copy these records and allows the employer to take reasonable
steps to verify the identity of the employee and to charge for the
reproduction of the records.”

(g) The author of the bill, Senator Nicolas C. Petris, in his
September 6, 1988, letter urging Governor Deukmejian to sign
Senate Bill 2155 into law, stated “Senate Bill 2155 clarifies current
law by spelling out that when employers are required to make basic
pay records ‘available’ to workers, that means they are required
to provide a copy, upon reasonable request.”

(h) Despite more than 20 years of consistent interpretation of
these provisions of the Labor Code, the California Superior Court
in the County of Riverside determined, in Esteban v. JSO, Inc.
d.b.a. America’s Labor Supply, Inc., Docket No. INC-1104544,
that the Labor Code provisions enacted by Senate Bill 2155 do not
obligate an employer to make copies: “If the Legislature wanted
to require an employer to copy records on request, it could easily
have said so.”

(i) The amendments made by this bill to provisions of Section
226 of the Labor Code enacted by Senate Bill 2155 are expressly
intended to overturn Esteban v. JSO, Inc., and are further intended
to make clear that these provisions afforded a current or former
employee the right to inspect or copy, or receive copies of, his or
her payroll records, or any combination thereof; that it was solely
the employee, and not the employer, who was authorized to make
that election under the statute; and that the amendments to these
provisions made by this bill are declaratory of existing law.

SEC. 2.  

Section 226 of the Labor Code is amended to read:

226.  

(a) Every begin delete employer shall, end delete begin insert employer, end insert semimonthly or at
the time of each payment of wages, begin insert shall end insert 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 accurate itemized statement
in writing showing begin insert all of the following: end insert (1) gross wages earned,
(2) total hours worked by the employee, except for any employee
whose compensation is solely based on a salary and who is exempt
from payment of overtime under subdivision (a) of Section 515
or any applicable order of the Industrial Welfare Commission, (3)
the number of piece-rate units earned and any applicable piece
rate if the employee is paid on a piece-rate basis, (4) all deductions,
provided that all deductions made on written orders of the
employee may be aggregated and shown as one item, (5) net wages
earned, (6) the inclusive dates of the period for which the employee
is paid, (7) the name of the employee and only the last four digits
of his or her social security number or an employee identification
number other than a social security number, (8) the name and
address of the legal entity that is the employer and, if the employer
is a farm labor contractor, as defined in subdivision (b) of Section
1682, the name and address of the legal entity that secured the
services of the employer, and (9) all applicable hourly rates in
effect during the pay period and the corresponding number of hours
worked at each hourly rate by the employee and, beginning July
1, 2013, if the employer is a temporary services employer as
defined in Section 201.3, the rate of pay and the total hours worked
for each temporary services assignment. The deductions made
from payment of wages shall be recorded in ink or other indelible
form, properly dated, showing the month, day, and year, and a
copy of the statement and the record of the deductions shall be
kept on file by the employer for at least three years at the place of
employment or at a central location within the State of California.
For purposes of this subdivision, “copy” includes a duplicate of
the itemized statement provided to an employee or a
computer-generated record that accurately shows all of the
information required by this subdivision.

(b) An employer that is required by this code or any regulation
adopted pursuant to this code to keep the information required by
subdivision (a) shall afford current and former employees the right
to inspect or copy records pertaining to their employment, upon
reasonable request to the employer begin insert , except that a former employee
terminated for workplace violence or harassment shall be entitled
only to receive a copy of the records, without any charge by the
employer end insert . The employer may take reasonable steps to ensure the
identity of a current or former employee. In making a request under
this subdivision, an employee shall elect to inspect or copy the
records, or to receive a copy of the records, or any combination
thereof. If the employer provides copies of the records, the
begin insert employer may charge the end insert actual cost of reproduction begin delete may be
charged end delete to the current or former employee. begin insert For purposes of this
subdivision, “actual cost of production” means only the per page
cost to the employer for the physical duplication of the records. end insert

(c) An employer who receives a written or oral request to inspect
or copy records, or to receive a copy of the records, or any
combination thereof, as specified by the employee pursuant to
subdivision (b) pertaining to a current or former employee shall
comply with the request as soon as practicable, but no later than
21 calendar days from the date of the request. A violation of this
subdivision is an infraction. Impossibility of performance, not
caused by or a result of a violation of law, shall be an affirmative
defense for an employer in any action alleging a violation of this
subdivision. An employer may designate the person to whom a
request under this subdivision will be made.

(d) This section does not apply to any employer of any person
employed by the owner or occupant of a residential dwelling whose
duties are incidental to the ownership, maintenance, or use of the
dwelling, including the care and supervision of children, or whose
duties are personal and not in the course of the trade, business,
profession, or occupation of the owner or occupant.

(e) (1) An employee suffering injury as a result of a knowing
and intentional failure by an employer to comply with subdivision
(a) is entitled to recover the greater of all actual damages or fifty
dollars ($50) for the initial pay period in which a violation occurs
and one hundred dollars ($100) per employee for each violation
in a subsequent pay period, not to exceed an aggregate penalty of
four thousand dollars ($4,000), and is entitled to an award of costs
and reasonable attorney’s fees.

(2) (A) An employee is deemed to suffer injury for purposes
of this subdivision if the employer fails to provide a wage
statement.

(B) An employee is deemed to suffer injury for purposes of this
subdivision if the employer fails to provide accurate and complete
information as required by any one or more of items (1) to (9),
inclusive, of subdivision (a) and the employee cannot promptly
and easily determine from the wage statement alone one or more
of the following:

(i) The amount of the gross wages or net wages paid to the
employee during the pay period or any of the other information
required to be provided on the itemized wage statement pursuant
to items (2) to (4), inclusive, (6), and (9) of subdivision (a).

(ii) Which deductions the employer made from gross wages to
determine the net wages paid to the employee during the pay
period. Nothing in this subdivision alters the ability of the employer
to aggregate deductions consistent with the requirements of item
(4) of subdivision (a).

(iii) The name and address of the employer and, if the employer
is a farm labor contractor, as defined in subdivision (b) of Section
1682, the name and address of the legal entity that secured the
services of the employer during the pay period.

(iv) The name of the employee and only the last four digits of
his or her social security number or an employee identification
number other than a social security number.

(C) For purposes of this paragraph, “promptly and easily
determine” means a reasonable person would be able to readily
ascertain the information without reference to other documents or
information.

(3) For purposes of this subdivision, a “knowing and intentional
failure” does not include an isolated and unintentional payroll error
due to a clerical or inadvertent mistake. In reviewing for
compliance with this section, the factfinder may consider as a
relevant factor whether the employer, prior to an alleged violation,
has adopted and is in compliance with a set of policies, procedures,
and practices that fully comply with this section.

(f) A failure by an employer to permit a current or former
employee to inspect or copy records, or to receive a copy of the
records, or any combination thereof, as specified by the employee
pursuant to subdivision (b) within the time set forth in subdivision
(c) entitles the current or former employee or the Labor
Commissioner to recover a seven-hundred-fifty-dollar ($750)
penalty from the employer.

(g) The listing by an employer of the name and address of the
legal entity that secured the services of the employer in the itemized
statement required by subdivision (a) shall not create any liability
on the part of that legal entity.

(h) An employee may also bring an action for injunctive relief
to ensure compliance with this section, and is entitled to an award
of costs and reasonable attorney’s fees.

(i) This section does not apply to the state, to any city, county,
city and county, district, or to any other governmental entity, except
that if the state or a city, county, city and county, district, or other
governmental entity furnishes its employees with a check, draft,
or voucher paying the employee’s wages, the state or a city, county,
city and county, district, or other governmental entity shall use no
more than the last four digits of the employee’s social security
number or shall use an employee identification number other than
the social security number on the itemized statement provided with
the check, draft, or voucher.