The California Supreme Court's recent opinions in Oman v. Delta Air Lines, Inc. and Ward v. United Airlines, Inc. clarify when, and under what circumstances, employees who even occasionally work in California are entitled to the protection of certain California wage-and-hour laws. The companion decisions, issued on June 29, 2020, hold the following:No CBA Exception to the Itemized Wage Statement Requirement. California Labor Code Section 226 (Section 226) does not contain an exception for collective bargaining agreements under the Railway Labor Act (RLA), though the analogous wage statement requirement in Industrial Welfare Commission (IWC) Wage Order 9 does contain such.Employees Entitled to California Wage Statements and Payment Laws. An employee is entitled to a Section 226 itemized wage statement and the protections of California Labor Code section 204 (Section 204), establishing certain specific deadlines for twice-monthly pay, if that employee either 1) performs the majority of his or her work during the relevant pay period within California or 2) if the employee does not perform the majority of his or her work during the relevant pay period in any particular state but the employee is based in California for work purposes.Other Factors Are Irrelevant.

Ward v. United Airlines, Inc.The FactsThe Ward case started as three separate class actions brought in California state court against United Airlines, Inc. (“United”) by Charles Ward (pilot), and Felicia Vidrio and Paul Bradley (flight attendants). All three flight crew members alleged that United’s wage statements failed to satisfy California Labor Code section 226 (wage statements). After United removed all three cases to federal court, the Vidrio and Bradley cases were consolidated.

Virtually by definition, many transportation workers, and many employees of airlines and railroads in particular, regularly travel and work in many states. For the most part, that does not impede their work or their employers’ businesses, but what if one state’s laws (read California’s) are unusually burdensome?That issue arose in a pair of class action cases filed in California district courts in which the plaintiffs, airline employees who frequently traveled out of state, complained that their wage statements did not comply with the dictates of California Labor Code § 226. Both district courts granted summary judgment in favor of the defendant airline. When the cases reached the U.S. Court of Appeals for the Ninth Circuit, it certified the question of whether Labor Code § 226 applied to these employees under state law.

The new law amends the California Private Attorneys General Act (PAGA) to allow employers the right to “cure” certain commonly litigated defects in employee wage statements within 33 days of notice by the employee in order to avoid litigation. The cure provisions for wage statements, which can be onerous, apply only to California Labor Code section 226(a)(6)—which requires employers to specify the inclusive dates of the period for which the employee is paid—and section 226(a)(8) —which requires employers to state the name and address of the “legal entity” that is the employer. AB 1506 is urgency legislation and therefore effective immediately.

After a three-day bench trial, the California federal court awarded approximately $48 million in statutory damages and $54 million in civil penalties under the California Labor Code Private Attorneys General Act (PAGA). This substantial judgment highlights national employers’ risk of running afoul of California’s wage statement and other wage and hour laws.In an earlier summary judgment ruling, the court had found that the retailer’s pay practices were noncompliant because (1) its statements of final pay that were issued to terminating employees with their last paychecks did not include the pay period start and end dates in violation of California Labor Code § 226(a)(6); and (2) the additional overtime payment that employees received as a result of earned bonuses appeared on wage statements as a lump sum, in violation of the California Labor Code § 226(a)(9) requirement that wage statements list the hourly rate and corresponding hours worked. However, the plaintiffs still needed to prove at trial that the retailer’s failure to provide compliant wage statements was “knowing and intentional” and that the plaintiffs were injured as a result, as required under California Labor Code § 226(e).The court found that the knowing and intentional requirement of California Labor Code § 226(e) means something more than simply providing an inadequate wage statement that is not a clerical error or inadvertent mistake.

Under California Labor Code section 226, an employer, semimonthly or at the time of each payment of wages, must furnish employees an “accurate itemized statement in writing” reflecting, at least, nine specifically delineated items. Commonly referred to as paystubs or wage statements, these perfunctory additions to almost every paycheck seem simple enough and might not garner a second glance from most employees or even the employer. Relying on a third-party payroll provider that automatically generates wage statements is a trap. Ensuring strict compliance with the requirements of Labor Code section 226 is imperative to avoid potentially costly litigation for California employers, and pointing the finger at the payroll provider as a defense isn’t going to work.Claims under Labor Code section 226 remain fertile ground for litigation in California on both an individual basis, but perhaps more significantly, on a representative basis through a class action or as an action brought under California’s Private Attorneys General Act

On December 1, 2016, a California Court of Appeal, in an unpublished decision, issued a ruling addressing the scope of both California Industrial Welfare Commission Wage Order 5-2001’s minimum wage rent credit and California Labor Code Section 226’s wage statement exemption for household employees. Rolfes v. Mei (No. B266929).Factual Background Ronald Mei owned a 33-unit apartment building and hired Andrew Rolfes as an assistant manager in 2000.

Ward v. United Airlines, Inc.Ward began as three separate class actions filed by pilot Charles Ward and flight attendants Felicia Vidrio and Paul Bradley. Each of these California residents challenged United’s wage statements under California Labor Code section 226, which requires employers to provide certain information on employee pay stubs (including, among other things, the employer’s address). The Ward plaintiffs asserted that the wage statements did not include United’s street address, the hours worked during the pay period, and the applicable hourly rates.

Seyfarth Synopsis: Accrued vacation pay is not a category that must appear on employee wage statements. California Labor Code section 226 requires employers to report various categories of information on employee wage statements. Among those categories are gross wages earned and net wages earned.

Magadia v. Wal-Mart Assocs., Inc., No. 19-16184 (9th Cir. May 28, 2021)In a class action and Private Attorneys General Act (PAGA) lawsuit alleging meal-break and wage-statement violations under the California Labor Code, the 9th Circuit reversed the lower court’s ruling against Wal-Mart, holding that: (1) plaintiff lacked standing to bring the PAGA claim because she did not personally suffer a meal-break violation injury and because PAGA does not allow an uninjured plaintiff to bring a claim; (2) with respect to the wage-statement claim, while California Labor Code § 226(a)(9) requires employers to list the “corresponding number of hours worked at each hourly rate in effect during the pay period,” an overtime adjustment that must be retroactively calculated is not “an hourly rate ‘in effect’” for purposes of § 226(a)(9); and (3) that Wal-Mart complied with § 226(a)(6) when it did not list pay-period dates on “Statements of Final Pay” to employees terminated in the middle of the pay period because those required pay-period dates were in the final wage statements given at the end of the next semimonthly pay period. The panel vacated the district court’s judgment and award of damages on the meal-break claim with instructions to remand it to state court, and it reversed the judgment and award of damages on the § 226(a) claim with instructions to enter judgment for Wal-Mart.