What’s the Cost of a Pay Stub?
TPPS works with clients of all sizes who often times use big-name payroll service providers. Do you know what we find time after time? These clients have out of compliance pay stubs! The conversation usually being as such:
- TPPS: have you reviewed your pay stub to ensure it meets California’s requirements?
- Client: We use [Insert Big Name] for payroll, so I am sure it’s okay.
- TPPS: May we see a sample?
- Client: Sure, but you’re not going to find anything….
- Next we are calling their account rep together to get it fixed….
Many times, it is very simple things – the full name of the company is not spelled out or the “Inc.” or “LLC” is missing, the address is missing, the employee’s SSN is listed in full, and so on. Sometimes we even find what (we consider) the more critical pieces missing, like hours paid at each pay rate, or the pay period dates.
Many payroll companies are not based in California and therefore are not in compliance with California’s ever changing wage and hour law changes. Even companies with a large presence in California don’t necessarily automatically format pay stubs for compliance. Most payroll companies require clients to take the responsibility of compiling with wage and hour laws into their own hands, and client almost always sign agreements that eliminate liability on the payroll provider’s side for non-compliance.
So, whether you do payroll in-house, use a large or small payroll processor, or outsource payroll entirely, please check your pay stubs for compliance. California pay stubs should include the following items:
- Gross wages earned
- Total hours worked (not required for salaried exempt employees)
- The number of piece-rate units earned and any applicable piece rate if the employee is paid on a piece rate basis
- All deductions (all deductions made on written orders of the employee may be aggregated and shown as one item)
- Net wages earned
- The inclusive dates of the period for which the employee is paid
- The name of the employee and the last four digits of his or her social security number or an employee identification number other than a social security number
- The name and address of the legal entity that is the employer
- All applicable hourly rates in effect during the pay period, and the corresponding number of hours worked at each hourly rate by the employee
Source: Labor Code Section 226(a)(7)
Pay stubs must also contain employee’s Paid Sick Leave (or PTO if you have a hybrid plan) balance.
Also keep in mind the pay CHECK is not the same as the pay STUB. This is often misunderstood – the check may have your name and address, but that doesn’t mean the stub need not also have it.
This might seem nit-picky, but plaintiff’s attorneys are making big bucks on this, and pay stub violations are easy to create class action complaints with. Employees may recover $50 for the initial pay period violation and $100 for each violation thereafter, up to a maximum of $4,000 per employee, plus reasonable attorneys’ fees. These claims can also be brought under PAGA which may increase the penalties potential.
As always TPPS is available to support you in all your HR and Payroll related matters – we’d be happy to look at your stub, on us, to make sure you are in compliance. Just ask us!