Amended in Assembly April 25, 2016

Amended in Assembly March 15, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 2535


Introduced by Assembly Member Ridley-Thomas

February 19, 2016


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

LEGISLATIVE COUNSEL’S DIGEST

AB 2535, as amended, Ridley-Thomas. Employment: wages: itemized statements.

Existing law requires an employer to provide his or her employee an accurate itemized statement in writing containing specified information, either semimonthly or at the time the employer pays the employee his or her wages. That specified information includes showing total hours worked by the employee, unless the employee’s compensation is solely based on a salary and the employee is exempt from payment of overtime under a specified statute or any applicable order of the Industrial Welfare Commission.

This bill would additionally exempt from that requirement for information on total work hours an employee exempt from payment of minimum wage and overtimebegin delete whose compensation is not based in whole or in part on hours worked.end deletebegin insert under specified statutes or any applicable orderend insertbegin insert of the Industrial Welfare Commission.end insert

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

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

P2    1

SECTION 1.  

Section 226 of the Labor Code is amended to
2 read:

3

226.  

(a) An employer, semimonthly or at the time of each
4payment of wages, shall furnish to his or her employee, either as
5a detachable part of the check, draft, or voucher paying the
6employee’s wages, or separately if wages are paid by personal
7check or cash, an accurate itemized statement in writing showing
8(1) gross wages earned, (2) total hours worked by the employee,
9begin delete unless the employee is exempt from payment of minimum wage
10and overtime and the employee’s compensation is not based in
11whole or in part on hours worked or the employee’s compensation
12is solely based on a salary and the employee is exempt from
13payment of overtime under subdivision (a) of Section 515 or any
14applicable order of the Industrial Welfare Commission,end delete
begin insert except as
15provided in subdivision (j),end insert
(3) the number of piece-rate units
16earned and any applicable piece rate if the employee is paid on a
17piece-rate basis, (4) all deductions, provided that all deductions
18made on written orders of the employee may be aggregated and
19shown as one item, (5) net wages earned, (6) the inclusive dates
20of the period for which the employee is paid, (7) the name of the
21employee and only the last four digits of his or her social security
22number or an employee identification number other than a social
23security number, (8) the name and address of the legal entity that
24is the employer and, if the employer is a farm labor contractor, as
25defined in subdivision (b) of Section 1682, the name and address
26of the legal entity that secured the services of the employer, and
27(9) all applicable hourly rates in effect during the pay period and
28the corresponding number of hours worked at each hourly rate by
29 the employee and, beginning July 1, 2013, if the employer is a
30temporary services employer as defined in Section 201.3, the rate
31of pay and the total hours worked for each temporary services
32assignment. The deductions made from payment of wages shall
33be recorded in ink or other indelible form, properly dated, showing
34the month, day, and year, and a copy of the statement and the
35record of the deductions shall be kept on file by the employer for
36at least three years at the place of employment or at a central
37location within the State of California. For purposes of this
38subdivision, “copy” includes a duplicate of the itemized statement
P3    1provided to an employee or a computer-generated record that
2accurately shows all of the information required by this subdivision.

3(b) An employer that is required by this code or any regulation
4adopted pursuant to this code to keep the information required by
5subdivision (a) shall afford current and former employees the right
6to inspect or copy records pertaining to their employment, upon
7reasonable request to the employer. The employer may take
8reasonable steps to ensure the identity of a current or former
9employee. If the employer provides copies of the records, the actual
10cost of reproduction may be charged to the current or former
11employee.

12(c) An employer who receives a written or oral request to inspect
13or copy records pursuant to subdivision (b) pertaining to a current
14or former employee shall comply with the request as soon as
15practicable, but no later than 21 calendar days from the date of the
16request. A violation of this subdivision is an infraction.
17Impossibility of performance, not caused by or a result of a
18violation of law, shall be an affirmative defense for an employer
19in any action alleging a violation of this subdivision. An employer
20may designate the person to whom a request under this subdivision
21will be made.

22(d) This section does not apply to any employer of any person
23employed by the owner or occupant of a residential dwelling whose
24duties are incidental to the ownership, maintenance, or use of the
25dwelling, including the care and supervision of children, or whose
26duties are personal and not in the course of the trade, business,
27profession, or occupation of the owner or occupant.

28(e) (1) An employee suffering injury as a result of a knowing
29and intentional failure by an employer to comply with subdivision
30(a) is entitled to recover the greater of all actual damages or fifty
31dollars ($50) for the initial pay period in which a violation occurs
32and one hundred dollars ($100) per employee for each violation
33in a subsequent pay period, not to exceed an aggregate penalty of
34four thousand dollars ($4,000), and is entitled to an award of costs
35and reasonable attorney’s fees.

36(2) (A) An employee is deemed to suffer injury for purposes
37of this subdivision if the employer fails to provide a wage
38statement.

39(B) An employee is deemed to suffer injury for purposes of this
40subdivision if the employer fails to provide accurate and complete
P4    1information as required by any one or more of items (1) to (9),
2inclusive, of subdivision (a) and the employee cannot promptly
3and easily determine from the wage statement alone one or more
4of the following:

5(i) The amount of the gross wages or net wages paid to the
6employee during the pay period or any of the other information
7required to be provided on the itemized wage statement pursuant
8to items (2) to (4), inclusive, (6), and (9) of subdivision (a).

9(ii) Which deductions the employer made from gross wages to
10determine the net wages paid to the employee during the pay
11period. Nothing in this subdivision alters the ability of the employer
12to aggregate deductions consistent with the requirements of item
13(4) of subdivision (a).

14(iii) The name and address of the employer and, if the employer
15is a farm labor contractor, as defined in subdivision (b) of Section
161682, the name and address of the legal entity that secured the
17services of the employer during the pay period.

18(iv) The name of the employee and only the last four digits of
19 his or her social security number or an employee identification
20number other than a social security number.

21(C) For purposes of this paragraph, “promptly and easily
22determine” means a reasonable person would be able to readily
23ascertain the information without reference to other documents or
24information.

25(3) For purposes of this subdivision, a “knowing and intentional
26failure” does not include an isolated and unintentional payroll error
27due to a clerical or inadvertent mistake. In reviewing for
28compliance with this section, the factfinder may consider as a
29relevant factor whether the employer, prior to an alleged violation,
30has adopted and is in compliance with a set of policies, procedures,
31and practices that fully comply with this section.

32(f) A failure by an employer to permit a current or former
33employee to inspect or copy records within the time set forth in
34subdivision (c) entitles the current or former employee or the Labor
35Commissioner to recover a seven-hundred-fifty-dollar ($750)
36penalty from the employer.

37(g) The listing by an employer of the name and address of the
38legal entity that secured the services of the employer in the itemized
39statement required by subdivision (a) shall not create any liability
40on the part of that legal entity.

P5    1(h) An employee may also bring an action for injunctive relief
2to ensure compliance with this section, and is entitled to an award
3of costs and reasonable attorney’s fees.

4(i) This section does not apply to the state, to any city, county,
5city and county, district, or to any other governmental entity, except
6that if the state or a city, county, city and county, district, or other
7governmental entity furnishes its employees with a check, draft,
8or voucher paying the employee’s wages, the state or a city, county,
9city and county, district, or other governmental entity shall use no
10more than the last four digits of the employee’s social security
11number or shall use an employee identification number other than
12the social security number on the itemized statement provided with
13the check, draft, or voucher.

begin insert

14
(j) An itemized wage statement furnished by an employer
15pursuant to subdivision (a) shall not be required to show total
16hours worked by the employee if any of the following apply:

end insert
begin insert

17
(1) The employee’s compensation is solely based on salary and
18the employee is exempt from payment of overtime under subdivision
19(a) of Section 515 or any applicable order of the Industrial Welfare
20Commission.

end insert
begin insert

21
(2) The employee is exempt from the payment of minimum wage
22and overtime under any of the following:

end insert
begin insert

23
(A) The exemption for persons employed in an executive,
24administrative, or professional capacity provided in any applicable
25order of the Industrial Welfare Commission.

end insert
begin insert

26
(B) The exemption for outside salespersons provided in any
27applicable order of the Industrial Welfare Commission.

end insert
begin insert

28
(C) The overtime exemption for computer software professionals
29paid on a salaried basis provided in Section 515.5.

end insert
begin insert

30
(D) The exemption for individuals who are the parent, spouse,
31child, or legally adopted child of the employer provided in any
32applicable order of the Industrial Welfare Commission.

end insert
begin insert

33
(E) The exemption for participants, director, and staff of a live-in
34alternative to incarceration rehabilitation program with special
35focus on substance abusers provided in Section 8002 of the Penal
36Code.

end insert
begin insert

37
(F) The exemption for any crew member employed on a
38commercial passenger fishing boat licensed pursuant to Article 5
39(commencing with Section 7920) of Chapter 1 of Part 3 of Division
P6    16 of the Fish and Game Code provided in any applicable order of
2the Industrial Welfare Commission.

end insert
begin insert

3
(G) The exemption for any individual participating in a national
4service program provided in any applicable order of the Industrial
5Welfare Commission.

end insert


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