Pay stub case settles for $8.25 million
We have previously written about the issue of confusing pay stubs and the employees’ remedies should they have trouble figuring out what they’re paid based on their pay stubs. How serious is the law regarding pay stubs? In the case of McKenzie v. FedEx, FedEx was sued for inaccuracies in its pay stubs that affected about 14,000 of its employees. The case was settled and FedEx had to pay $8.25 million, most of it for penalties.
McKenzie was an hourly employee who worked as a truck driver for FedEx. Together with other hourly employees, McKenzie received pay stubs on a weekly basis. The pay stubs listed three categories of earnings: 1) “Reg Earn” 2) “OvrTimePrm” and 3) “Overtime” and listed the corresponding hours worked under each category. However, if all the hours listed under each category is totaled the result is an incorrect number of hours worked. The pay stub did not provide a separate category which showed the employee’s total hours worked.
Additionally, the pay stub did not clearly state the overtime rate. The employees had to use some mathematical computations to arrive at their overtime rate. Furthermore, the pay stubs only contain the end date for the pay period and not a beginning date. FedEx implemented this pay stub system throughout California.
In the lawsuit, McKenzie alleged three violations of California’s Labor Code because the following information were missing from the pay stubs: 1) total hours worked; 2) the inclusive dates of the work period; and 3) the overtime rate. The court granted class action status to the case and defendant’s appeal for reconsideration was denied. FedEx ended up settling the case.
A pay stub must provide itemized and accurate information of the following:
1) The employer’s name and address
2) The name of the employee and the employee’s Social Security (last four digits only) or employee identification number
3) The inclusive dates of the work period for which the employee is paid
4) The employee’s hourly rates in effect during the pay period, including the regular hourly rate and the overtime rate, if any
5) The corresponding number of hours worked by the employee at each hourly rate. For example, if the employee worked 80 regular hours at $10 per hour and 10 overtime hours at $15 per hour, these should be reflected on the pay stub.
6) Total hours worked for the pay period (e.g., 90 hours)
7) Gross wages earned
8) All deductions
9) Net wages earned
The law allows recovery of penalties to the employee of as much as $4,000 if the employee suffers an injury as a result of employer’s failure to comply.
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C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully obtained significant results, including several million dollar recoveries for consumers against insurance companies and big business. He is a member of the Million Dollar-Advocates Forum—a prestigious group of trial lawyers whose membership is limited to those who have demonstrated exceptional skill, experience and excellence in advocacy. He has been featured in the cover of Los Angeles Daily Journal’s Verdicts and Settlements for his professional accomplishments and recipient of numerous awards from community and media organizations. His litigation practice concentrates in the following areas: serious personal injuries, wrongful death, insurance claims, unfair business practices, wage and hour (overtime) litigation. You can visit his website at www.joesayas law.com or contact his office by telephone at (818) 291-0088.
