Itemized Wage Statement

What Is an Itemized Wage Statement?

An itemized wage statement is a written document that California employers must provide to employees with each wage payment. Governed by California Labor Code Section 226, this statement must contain nine specific pieces of information detailing how the employee's pay was calculated, what deductions were taken, and who is making the payment.

California's itemized wage statement requirements are among the most detailed in the nation. Unlike a simple pay stub, which may contain minimal information, California mandates specific data points that help employees verify they are being paid correctly. Non-compliance can result in penalties up to $4,000 per employee, even when the employee receives the correct amount of pay.

Nine Required Elements

California Labor Code Section 226(a) requires every itemized wage statement to include:

1. Gross Wages Earned

The total amount of wages earned before any deductions:

All regular hours worked
All overtime hours at applicable rates
Commissions earned
Bonuses paid
Piece-rate earnings
Any other compensation for the pay period

2. Total Hours Worked

Required for all non-exempt employees:

Must reflect actual hours worked
Cannot be estimated or averaged
Must match timekeeping records
Exception: Exempt employees don't require hours listing

3. Piece-Rate Information

If the employee earns any piece-rate pay:

Required Information	Description
Number of units earned	Exact count of pieces completed
Applicable piece rate	Rate per unit
Rest period compensation	Paid separately at average hourly rate
Nonproductive time	Time not earning piece rate

4. All Deductions

Every deduction from wages must be itemized:

Federal income tax withholding
State income tax withholding
Social Security (FICA)
Medicare
State disability insurance (SDI)
Health insurance premiums
Retirement contributions
Garnishments
Any other wage deductions

5. Net Wages Earned

The actual take-home pay:

Gross wages minus all deductions
Must equal amount paid by check or deposit
Rounding must be accurate

6. Inclusive Dates of the Pay Period

The specific period covered:

Start date of pay period
End date of pay period
Must correspond to employer's pay cycle
Cannot use vague descriptions like "February"

7. Employee Name and Identification

Employee identification on statement:

Legal name of the employee
Last four digits of Social Security number OR
Employee identification number (preferred for privacy)
Must match employee records

8. Employer Name and Address

Employer identification:

Required	Not Sufficient
Legal business name	Trade name only (DBA)
Physical address	P.O. Box only
Complete street address	Partial address

9. All Applicable Hourly Rates and Hours Worked

For employees working at different rates:

Each hourly rate must be listed
Hours worked at each rate must be specified
Overtime rates must be shown separately
Double-time rates must be shown separately

Sample Compliant Wage Statement

ACME RETAIL CORPORATION                    Pay Period: 01/01/2024 - 01/15/2024
1234 Commerce Street                       Pay Date: 01/20/2024
Sacramento, CA 95814                       Employee: Jane Doe (ID: 7890)

EARNINGS
Description              Hours     Rate        Amount
Regular                  64.00    $18.00      $1,152.00
Overtime (1.5x)           8.00    $27.00        $216.00
Double Time (2x)          4.00    $36.00        $144.00
Department Lead Premium  76.00     $1.50        $114.00
                                            -----------
GROSS PAY                                    $1,626.00

DEDUCTIONS
Federal Income Tax                             $162.60
California State Tax                            $65.04
Social Security (6.2%)                         $100.81
Medicare (1.45%)                                $23.58
CA SDI (1.1%)                                   $17.89
Health Insurance - Employee                     $85.00
401(k) Pre-tax (5%)                            $81.30
                                            -----------
TOTAL DEDUCTIONS                              $536.22

NET PAY                                      $1,089.78

HOURS SUMMARY
Total Hours Worked: 76.00
Regular Hours: 64.00 | OT Hours: 8.00 | DT Hours: 4.00

Multiple Rate Requirements

When employees work at different rates during a pay period, special requirements apply:

Common Multi-Rate Scenarios

Scenario	Documentation Requirement
Department premium	Base rate + premium rate, hours at each
Different job duties	Rate for each job, hours for each
Night/weekend differential	Base rate + differential, hours at each
Training rate vs. regular	Each rate with corresponding hours

Example: Multi-Rate Statement

EARNINGS
Position/Rate                Hours     Rate        Amount
Cashier                      32.00    $17.00        $544.00
Floor Supervisor             24.00    $20.00        $480.00
Overtime - Cashier            4.00    $25.50        $102.00
Overtime - Supervisor         4.00    $30.00        $120.00
                                                 ----------
GROSS PAY                                        $1,246.00

Piece-Rate Specific Requirements

California Assembly Bill 1513 added specific requirements for piece-rate employees:

Required Disclosures

Component	Requirement
Total pieces earned	Actual count for pay period
Piece rate(s)	Each rate if multiple apply
Rest period compensation	Calculated at average hourly rate
Recovery period compensation	Separate line item
Other nonproductive time	Separate line item

Piece-Rate Statement Example

PIECE-RATE EARNINGS
Units Completed: 450
Rate Per Unit: $2.50
Piece-Rate Earnings:                    $1,125.00

ADDITIONAL COMPENSATION
Rest Periods (5 hrs @ $18.75 avg):         $93.75
Recovery Periods (1.5 hrs @ $18.75):       $28.13
Other Nonproductive Time (2 hrs):          $37.50
                                        ----------
GROSS PAY                               $1,284.38

Electronic Wage Statements

Requirements for Electronic Delivery

California permits electronic itemized wage statements only under specific conditions:

Mandatory Requirements:

Employee voluntarily consents in writing
Employee can access statement electronically during employment
Employee can easily print the statement at no cost
Employer provides paper statement upon request
Records remain accessible for at least three years after termination

Employee Consent Best Practices

Do	Don't
Obtain written consent	Assume consent from direct deposit enrollment
Allow opt-out at any time	Make electronic-only mandatory
Provide clear access instructions	Require special software to view
Confirm employee has computer access	Force employees to use personal devices

Common Violations and Penalties

Frequently Cited Violations

Missing Information:

Employer address incomplete or missing
Using trade name instead of legal name
Missing employee identification number
No pay period dates listed

Calculation Errors:

Hours don't reconcile with timekeeping records
Overtime not shown at correct rate
Regular rate of pay calculated incorrectly
Net pay doesn't equal gross minus deductions

Format Issues:

Multiple rates not itemized separately
Deductions bundled without itemization
Piece-rate components missing
Illegible or unclear statements

Penalty Structure

Per Labor Code Section 226(e):

Violation	Penalty Per Pay Period	Maximum Per Employee
Initial violation	$50	$4,000
Subsequent violations	$100	$4,000

Plus:

Actual damages if employee suffers injury
Costs and reasonable attorney fees
Additional PAGA penalties if applicable

"Injury" Requirement

To recover penalties, employees must show they suffered "injury":

Unable to determine if paid correctly
Required to perform mathematical computations
Unable to identify employer for correspondence
Denied access to required information

Courts have found injury from even minor omissions when they impede verification of correct payment.

Record Retention Requirements

Employer Obligations

Record Type	Retention Period	Accessibility
Wage statements	3 years minimum	Must provide copy within 21 days of request
Time records	3 years minimum	Must be available for inspection
Payroll records	3 years minimum	Must produce for Labor Commissioner

Employee Access Rights

Employees have the right to:

Inspect payroll records within 21 calendar days of written request
Receive copies at reasonable cost (or free if employer prefers)
Inspect records at reasonable times and places
Designate representative to receive records (with written authorization)

Compliance Strategies

Payroll System Requirements

Ensure your payroll system can:

Generate all nine required elements automatically
Track multiple pay rates per employee
Calculate overtime correctly under California law
Itemize all deductions separately
Store statements for required retention period

Audit Checklist

Regularly review wage statements for:

All nine required elements present
Employer legal name (not just DBA)
Complete employer address
Employee name and last four of SSN or employee ID
Specific pay period dates (start and end)
Hours worked listed (non-exempt employees)
Each hourly rate shown separately
All deductions itemized individually
Gross, deductions, and net reconcile correctly

Training Requirements

Train relevant staff on:

Legal requirements for wage statements
Common errors to avoid
Handling employee questions about statements
Escalation procedures for discrepancies

Integration with Time Tracking

Accurate wage statements depend on accurate time records. Your time tracking system should:

Capture exact clock-in and clock-out times
Record meal and rest periods
Track hours by department or rate when applicable
Calculate overtime automatically under California rules
Export data directly to payroll system

Timewave's scheduling and time tracking platform ensures hours are captured accurately and flow seamlessly into compliant wage statements.