Category Archives: Discipline and Discharge

In a Common Sense Decision, Appellate Court Clarifies Deadline for Employers to Issue Wage Statements under Labor Code Section 226

It’s a situation any Human Resources professional might find themselves in – circumstances require you to effectuate a termination in short order and you have to scramble to calculate the employees’ correct final pay and prepare a paycheck. But what if the wage statement is not ready? Does the law require employers to provide a wage statement to a terminated employee simultaneously with their final paycheck? Thanks to a recent decision from the California Court of Appeal, you have a little breathing room.

In Canales v. Wells Fargo Bank, 23 Cal. App. 5th 1262 (2018), Wells Fargo had a practice of paying certain terminated employees final wages via cashier’s checks – which were prepared in the bank branch – and then mailing the wage statements to the employees from another location, either that same day, or the following day. The plaintiff complained that the wage statements should have been provided simultaneously with the paychecks, and that Wells Fargo’s practice of mailing them constituted a violation of California Labor Code section 226, which provides:

“…[e]very employer should semimonthly or at the time of each payment of wages, furnish each of his or her employees, either as a detachable part of the check, draft, or voucher paying the employee’s wages, or separately when wages are paid by personal check or cash, an accurate itemized statement in writing…”

Wells Fargo responded that it was in compliance with the statute because:

1) The statute does not require simultaneous delivery of wage statements and specifically allows employers the option to provide wage statements “semimonthly;” and

2) It was permitted to mail the wage statements, because the statute provides that wage statements can be delivered “separately” in the case of a cashier’s check, which is analogous to cash.

The court agreed, holding, “…if an employer furnishes an employee’s wage statement before or by the semimonthly deadline, the employer is in compliance.” The court explained that it interpreted the phrase ‘“semimonthly or at the time of each payment of wages’ as representing the outermost deadlines by which an employer is required to furnish the wage statement.” The court provided the following example:

[S]uppose an employer furnishes wage statements on the first and 15th of each month. The employer discharges an employee on the second of the month. Per the statute’s plain language, if an employer pays the final wages by personal check or cash, it has the option of furnishing the discharged employee with the wage statement.

We find it illogical to conclude an employer violated section 226 by furnishing a wage statement before the semimonthly date has been reached. If the employer furnishes the wage statement to the discharged employee of the fifth of the month, the employer has complied with the requirement that it furnish the wage statement to the employee “semimonthly” because the employee would have ostensibly been furnished with the wage statement by the semimonthly date.

The court also rejected the plaintiff’s reliance on the California DLSE (Division of Labor Standards Enforcement) Enforcement Policies and Interpretations Manual, which provides, “[a] California employer must furnish a statement showing the following information to each employee at the time of payment of wages (or at least semi-monthly, whichever occurs first),” holding that the Manual is not entitled to deference as an agency regulation because it was not promulgated in accordance with the Administrative Procedure Act. The court also did not find the agency’s interpretation persuasive, finding that the term “whichever occurs first” appears nowhere in the statute, and simply does not make sense given that the statute specifically provides employers a choice of two separate timeframes to issue wage statements:

1) “semimonthly” or

2)“at the time of each payment of wages.”

The Canales decision is certainly one where common sense prevailed. Keep it in mind next time next time you have the final pay, but not the wage statement, ready at the time of termination.

Quirky Question #287: “Cat’s Paw” Claims – How could an employer violate antidiscrimination laws, even though the decision-making manager has no discriminatory bias at all?

Question: We just went through a five-person layoff, and one of the individuals laid off (an African American) has hired a lawyer and is threatening to sue for racial discrimination. I have enormous confidence in the fairness of the individual manager making the layoff selections, and those selections were based on years of performance ratings.  However, the lawyer hired by our ex-employee says that doesn’t matter, because the ex-employee’s direct supervisor was racially biased.  He says that the bias of the direct supervisor taints the entire process and that the manager was merely a “cat’s paw.”  Let’s assume for a moment that the direct supervisor is a little rough around the edges.  Do we have a problem here, even though the manager is fair and unbiased?  And what the heck is a “cat’s paw” anyway? Answer→

Quirky Question #284: If a tree falls in the forest and no one hears it, can you still unlawfully retaliate against it?

Question: One of our male supervisors wants to fire a female employee who complained that he was sexually harassing her. The harassment allegations appear to have some substance: he asked her for pictures of herself in a bikini; told her to “stay off [her] knees,” which she viewed as sexual innuendo; and told her that her regulation length shorts were too short. Also, the grounds for termination (driving a vehicle with the door open, creating a safety hazard) have been overlooked in other situations. We are a little worried that she will claim we are retaliating against her for the sexual harassment complaint.  But the supervisor says he never heard about the sexual harassment complaint.  So, if he didn’t know about the complaint, he could not possibly retaliate against her on the basis of that complaint, right?  You could get this case thrown out before it ever went to trial, right?

Answer→

Quirky Question #271: We’ve Got a Worried Waiter

Question: We recently interviewed a candidate for a server position at our restaurant. During the interview, he informed us that he has an anxiety disorder, which causes him to have panic attacks out of the blue. Do we have to hire him? What if he had a panic attack in the middle of serving a customer?

Answer→

Quirky Question #242 – Policing Break and Time Records Pays Off

Question:

We are a California employer.   After all the publicity surrounding class actions over meal and break periods, we instituted automatic warnings if employees take too long or too short a meal or rest break. Is anyone really enforcing this kind of discipline or are we wasting our time? Answer→

Quirky Question # 238, No Laughing Matter – Company Found Liable for Wrongfully Terminating Independent Contractor’s Agreement

Question:

My company relies on independent contractors, over whom we don’t exert control. They often joke around with each other. I’m not liable for employment discrimination if I terminate one of them after they complain about another, right? Answer→

Quirky Question #229, The Not-Clear-Cut Case for Canning a Cussing Worker

Question:

I’m the owner of a small record store. I have 13 sales clerks and 4 back room employees. Things aren’t great these days – but we get by. Fortunately, while people listen to music on their phones and the internet way more than they do CDs, we’ve refocused ourselves toward vintage record collectors and hardware sales.

I just fired a sales clerk last week for what I thought was pretty obviously unacceptable behavior. He started complaining to me the other day about the way I pay commissions. I pay my sales clerks $10 per hour plus a small commission on certain items in the store. For instance, if they move a record-player, or a set of headphones, or a tube amplifier, they get 2% of the sale in their next check. Because this guy worked on the day shifts, he felt like he did not have as good a shot at selling the big-ticket pieces of equipment, which are often sold in the evening. He pestered me for weeks to reduce the commissions on the hardware, and to give him a commission on the used records that he sells during the day in order to make it more “fair” for him. On Thursday we were working together for most of the day, and he would not stop bringing it up with me. I kept telling him that I preferred not to talk about things like that when customers were around, and that I would talk to him about it later. About ten minutes before his shift ended, he blew up, and in front of a half-dozen customers started shouting, “You f@&%ing jerk! You just want to keep all the big commissions for yourself! I should kick your a@@! Who f@&%ing puts up with this bull$#!t!” Then he threw a box of cds at me, which smashed into the front desk and scattered all over the place. The customers were freaked out. I was furious.

Obviously, I fired him on the spot. The next day, he sent me an email claiming he had been talking to some lawyers (aka doing Google searches), and that what I did was a violation of something called the NLRA. He claims that unless I write him a big check, he’s going to file a lawsuit with the National Labor Relations Board, and “knock your sorry a@$ out of business.”

What on earth is he talking about? There’s no union in my store – why is he talking about the “National Labor Relations Board?” Not to mention, the guy launched into a cuss-word laden tirade at me in front of a bunch of our customers. Surely I can fire him for that, can’t I? Answer→