While it may be true that employees rarely even look at their wage statements, there is one group of persons who certainly do – plaintiffs’ lawyers. Or, more precisely, California plaintiffs’ lawyers.
And after a stunning $102 million award against Wal-Mart for wage statements that the court concluded did not fully comply with California’s onerous wage statement laws, California plaintiffs’ lawyers are likely to look at their clients’ wage statements even more closely – and to file even more class action lawsuits alleging that employers’ wage statements failed to dot every “I” and cross every “T.”
In the case known as Robert Magadia v. Wal-Mart Associates, Inc., pending in the United States District Court for the Northern District of California, the named plaintiffs brought a variety of wage-hour claims, including alleging that Wal-Mart’s California employees were not provided proper compensation for missed meal periods and did not receive compliant wage statements.
A three-day bench trial was conducted in late 2018. And a little more than 6 months later, Hon. Lucy Koh issued her findings, awarding nearly $102 million to Wal-Mart employees.
The overwhelming majority of the award was for wage statements that Judge Koh concluded did not comply in full with California Labor Code section 226 – approximately $48 million in statutory damages and $54 million in penalties under the Private Attorneys General Act (“PAGA”).
Judge Koh’s concern was that Wal-Mart’s wage statements identified a lump sum for additional overtime that individuals received as a result of bonuses – identified as “OVERTIME/INCT” -- without breaking down how that sum was calculated.
The award is almost certain to be appealed, and given the dearth of law on the issue, there is reason to believe the decision could in fact be overturned by the Ninth Circuit.
But the award itself will be enough to encourage employees and their counsel to closely scrutinize wage statements to determine if there are any possible omissions on which a class action could be based.
And for that reason alone employers with operations in California would be wise to review their wage statements closely to ensure that they comply in full with Labor Code section 226.