In a time when all of the political candidates are talking about how they are trying to stimulate the economy, our California legislature just passed a new law which will definitely make it more difficult to do business in our state.  Enacted in 1979, section 226 of the Labor Code sets forth nine specific items that must be included in the check stub provided with each payment of wages in the State of California.  It also provides that an employee who suffers an injury as the result of a knowing and intentional failure by an employer to comply with the check stub requirement is entitled to recover the greater of actual damages, or a sum set by statute, and an award of costs and attorneys’ fees.

Labor Code § 226 has already spawned a cottage industry for plaintiff’s lawyers who troll for information about employers who may have failed to strictly adhere to the numerous pay stub requirements.  California courts, however, have not made it easy; courts have adhered to the language of Labor Code § 226 in holding that the employee-plaintiff must prove that he or she actually suffered injury as a result of the employer’s failure to comply with the pay stub requirements in order to recover damages and attorneys’ fees.  This restriction on recovery makes good common sense as most violations of 226 are highly technical and do not injure an employee who has been fully paid for his or her work.

Unfortunately, common sense does not present much of an obstacle to state senators that must propose legislation to make a name for themselves.  It should therefore come as no surprise that the California Legislature has passed Senate Bill 1255 which provides that as of January 1, 2013, an employee will be deemed to suffer injury and be able to recover damages and attorneys’ fees merely if the employer fails to include each and every one of the nine items in the employee’s paycheck stub.  This means that large groups of employees will be recovering substantial damages and attorneys’ fees even if no one ever actually suffered an injury.  The new law is guaranteed to spawn hundreds, if not thousands, of individual and class action lawsuits against unsuspecting employers who failed to comply with the detailed requirements of Labor Code § 226.

I am not one to advocate abolishing the majority of governmental agencies, even the IRS.  Society cannot function without rules that address real problems and protect citizens from real harm.  Indeed, the importance of appropriate regulations in business is the reason why it is so important to speak out against unnecessary regulations that impose significant administrative costs while providing no real benefit to society.  At a time when our economy is in the doldrums, it is tragic that our lawmakers are proposing laws such as SB 1255 that make it even tougher to do business in California and benefit only a few contingency fee lawyers.  If you are a California resident, I urge you to join me in contacting our representatives in Sacramento and letting them know that we oppose this type of legislation.

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP.  It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked.  So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again.  This is commentary people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing.  No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits).  But feel free to contact us with your questions and comments—who knows, we might even answer you.  And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry).  Big news: Copyright 2012.  All rights reserved; yep, all of them.

If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq. (who else would you contact?), commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department, at (310) 281-6348 or kscott@ecjlaw.com.