Wage Statement (Pay Stub)

What Is a Wage Statement?

A wage statement, commonly called a pay stub or paycheck stub, is a written document that accompanies each wage payment and details how an employee's pay was calculated. California Labor Code Section 226 requires employers to provide accurate, itemized wage statements to all employees with each paycheck.

California has some of the most stringent pay stub requirements in the nation. Non-compliant wage statements can expose employers to significant penalties, even when employees receive the correct amount of pay.

California Wage Statement Requirements

Under Labor Code Section 226, every wage statement must include:

Required Information

Item	Description
Gross wages earned	Total earnings before any deductions
Total hours worked	For non-exempt employees only
Piece-rate units and rate	If employee is paid by piece rate
All deductions	Itemized list of every deduction
Net wages earned	Take-home pay after deductions
Pay period dates	Inclusive start and end dates
Employee name and ID	Last four digits of SSN or employee ID
Employer information	Legal name and address
Hourly rates and hours	Each rate and corresponding hours worked

Additional Requirements for Specific Pay Types

Piece-Rate Employees:

Number of piece-rate units earned
Applicable piece rate(s)
Compensation for rest and recovery periods
Compensation for other nonproductive time

Employees with Multiple Rates:

Each hourly rate worked
Total hours worked at each rate

Overtime:

Regular hours and rate
Overtime hours at time-and-a-half rate
Double-time hours and rate

Sample Wage Statement Layout

TIMEWAVE SCHEDULING CO.                     Pay Period: 01/01/2024 - 01/15/2024
123 Main Street, Los Angeles, CA 90001      Pay Date: 01/26/2024
                                            Employee: John Smith (ID: 1234)

EARNINGS
Description          Hours    Rate        Amount
Regular              72.00    $18.00      $1,296.00
Overtime (1.5x)       8.00    $27.00        $216.00
Night Differential   40.00     $2.00         $80.00
                                          ----------
GROSS PAY                                 $1,592.00

DEDUCTIONS
Federal Income Tax                          $191.04
CA State Tax                                 $95.52
Social Security                              $98.70
Medicare                                     $23.08
Health Insurance                             $75.00
401(k)                                       $79.60
                                          ----------
TOTAL DEDUCTIONS                           $562.94

NET PAY                                    $1,029.06

Electronic vs. Paper Wage Statements

Paper Statements

Must be provided unless employee opts into electronic delivery
Must be given at the time wages are paid
Employee must be able to review before cashing check

Electronic Wage Statements

California permits electronic pay stubs only if:

The employee voluntarily agrees in writing
The employer provides free and unrestricted access
The employee can print the statement at no cost
The employer provides a paper statement upon request
The statement remains accessible for at least 3 years

Common Wage Statement Violations

Missing Information

Failing to include all hourly rates when employee works at multiple rates
Not showing total hours worked for non-exempt employees
Omitting employer's legal name (using trade name only)
Missing or incorrect pay period dates

Calculation Errors

Incorrect overtime rate calculations
Wrong totals that don't match itemized amounts
Failing to show the regular rate of pay

Deduction Issues

Listing vague deduction descriptions
Not itemizing each type of deduction separately
Taking unauthorized deductions

Penalties for Non-Compliant Wage Statements

California imposes serious penalties for wage statement violations:

Employee Lawsuits (Labor Code 226(e))

$50 per employee per pay period for initial violation
$100 per employee per pay period for subsequent violations
Maximum of $4,000 per employee
Plus actual damages suffered by employee

PAGA Penalties

Under the Private Attorneys General Act:

$100 per employee per pay period (initial violation)
$200 per employee per pay period (subsequent violations)
25% to the employee, 75% to the state

"Knowing and Intentional" Violations

If violations are willful, additional penalties apply, including potential criminal liability.

Record Retention Requirements

California employers must:

Maintain copies of wage statements for at least 3 years
Make records available to the Labor Commissioner upon request
Provide employees copies of their records within 21 days of a written request

Best Practices for Compliant Wage Statements

Audit Your Pay Stubs

Regularly review wage statements to ensure:

All required fields are present
Information is accurate and up-to-date
Calculations are correct
Employer name and address are current

Use Proper Payroll Systems

Invest in payroll software that:

Auto-generates compliant California wage statements
Updates for changing labor law requirements
Maintains required records for the retention period
Integrates with time and attendance systems

Train Payroll Staff

Ensure payroll personnel understand:

California-specific requirements
How to handle special pay situations
When to escalate potential compliance issues

Document Everything

Keep copies of all wage statements
Maintain records of employee acknowledgments for electronic delivery
Document any disputes and resolutions

Integration with Time Tracking

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

Capture exact start and end times
Record all breaks (paid and unpaid)
Track hours by rate when employees work multiple pay rates
Integrate directly with payroll for error-free transfer

Timewave's scheduling and time tracking platform ensures all hours are captured correctly, feeding accurate data into your payroll system for compliant wage statements.