76 Litigating CA Wage & Hour Class and PAGA Actions (23rd Edition) Seyfarth Shaw LLP | www.seyfarth.com (7) the employer’s name and address;370 (8) the employee’s name; and (9) the employee’s employee identification number or the last four digits (only) of the employee’s social security number. Following this amendment, an employer can no longer argue that employees must individually demonstrate that they suffered actual injury resulting from a violation of Labor Code section 226(a). That argument previously had been a very potent weapon when opposing certification of such claims.371 H. The Requirement That Violations Be “Knowing And Intentional” The remaining dispute over the construction of Section 226 concerns the meaning of the phrase “knowing and intentional.” This standard appears, on its face, to differ from the standard for awarding waiting time penalties under Labor Code section 203, which is mere “willfulness.” Normally, if an employer is conscious that it committed an act, and if the employer lacks a reasonable basis for believing the act is lawful, then the act is “willful” for purposes of Section 203 even where the employer lacked bad faith or an intention to break the law.372 Although this statutory interpretation departs from the common-sense understanding of the term “willful violation,” it furthers a strong public policy favoring payment of final wages to an employee (who may depend on such wages for survival), so there is a colorable reason to use a broad interpretation of “willful.”373 With wage statement violations, by contrast, any injury to the employee is often purely theoretical. Employers contend there is no strong public policy reason to hold them liable for penalties totaling thousands (or even millions) of dollars merely because they have overlooked a technical requirement as to what should appear on an itemized wage statement. Accordingly, they believe there is no strong reason to assume the Legislature intended to equate “knowing and intentional” with “willful.” Several district court decisions have now granted summary adjudication against a claim for penalties on the ground that while the wage statements violated Section 226(a), there was no evidence that the employer knew of Section 226 and intended to violate it.374 370 See Noori v. Countrywide, 43 Cal. App. 5th 957 (2019) (collecting cases and clarifying that, under California law, use of a truncated name on wage statements may not constitute a violation). 371 The Court of Appeal held that the 2013 amendment applies retroactively because it “merely clarifies existing law.” Lubin v. Wackenhut Corp., 5 Cal. App. 5th 926, 959-60 (2016). Thus, even for claims accruing before 2013, injury is presumed where the wage statement does not accurately set forth the information required by the statute. 372 Barnhill v. Robert & Saunders Co., 125 Cal. App. 3d 1, 7 (1981). 373 See id. at 7-8 (explaining public policy underlying Section 203). 374 See Harris v. Vector Mktg. Corp., 656 F. Supp. 2d 1128, 1145-46 (N.D. Cal. 2009) (summary adjudication warranted on Section 226(e) claim where dispute existed as to whether plaintiff was independent contractor or employee and record lacked evidence that conduct was knowing or willful); Reber v. AIMCO/Bethesda Holdings, Inc., No. SA CV07-0607 DOC (RZx), 2008 WL 4384147 (C.D. Cal. Aug. 25, 2008) (summary adjudication appropriate on plaintiff’s § 226 claim because of a good faith dispute as to whether employees are exempt precludes finding defendant’s conduct was knowing and intentional); Mutec v. Huntington Mem’l Hosp., LASC Case No. BC 288727 (LA Superior Court, Mar. 10, 2006) (Hon. Tricia Ann Bigelow) (granting summary adjudication against claim for penalties where employer did not know that its pay stubs violated Section 226(a)). But see Heritage Residential Care, Inc. v. Division of Labor Standards Enforcement, 192 Cal. App. 4th 75, 88 (2011) (defendant’s “good faith mistake of law” that employees who lacked Social Security numbers were not required to be provided with wage statements was not an “inadvertent” mistake, such as a clerical error would
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