Important Change to California's Pay Statement Requirements, Effective January 1, 2008

As the New Year approaches, California employers should be mindful of an important change that will take effect on January 1, 2008, relating to information that can be listed on employee pay statements.  Under California Labor Code section 226, employers must include certain itemized information on each employee’s pay statement.   (This information must be provided separately for each pay period when the wages are paid by personal check or cash.)  Under the statute, employers have been required to include the employee’s name and social security number on the pay statement.  Effective January 1, 2008, however, only the last four digits of the employee’s social security number may appear on the pay statement.  Alternatively, employers may list an employee identification number other than a social security number on the pay statement.  The purpose of this change, presumably, is to protect employee’s privacy.  Employers that fail to comply with section 226’s new requirement may be exposed to substantial liability,including damages, statutory and civil penalties as well as attorneys’ fees.  

In view of Labor Code section 226’s new requirement, employers should ensure that pay statements issued to their employees on or after January 1, 2008, include only the last four digits of an employee’s social security number.  Alternatively, such statements should list an employee’s identification number other than a social security number.  Of course, employers also should ensure that their pay statements contain all other itemized information required by section 226.

Should you have any questions about this development, please contact the Ogletree Deakins attorney with whom you normally work or the Client Services Department at 866-287-2576 or via e-mail at clientservices@ogletreedeakins.com.

Note: This article was published in the December 2007 issue of the California eAuthority.